Pub Rants

Category: Publishing Deals & Contracts

Does The Size Of The Advance Equal Success?

STATUS: Blogging a bit late tonight. Busy day.

What’s playing on the iPod right now? MR. JONES by Counting Crows

The answer is yes.

The answer is no.

The size of the advance paid can increase the likelihood of success as the publisher is more likely to commit significant resources toward a title that a large advance was paid for.

However, the size of the advance is not a guarantee of success for any specific title.

I remember reading an article in Publishers Weekly last year (and I wish I had saved it). The article outlined two thriller titles being released by two different publishers. Both thrillers were in hardcover and the lead titles for their specific imprints. Both titles had a solid six-figure advance. Both titles had significant resources allocated for the marketing and promotional push. Both titles were from debut authors.

One title hit the New York Times Bestseller list. The other title had, in the publisher’s own words, “disappointing sales.”

So what happened?

Quite simply, no amount of money can force a public to want and buy a book. Sometimes it happens and sometimes it doesn’t. If the publishers knew what created that ground swell to catapult a title onto bestseller lists and a million copy sell-thru, they’d do it for every book.

It’s a dangerous to assume that the size of the advance paid is the only indicator of possible success. (Or that a publisher who has paid a large advance will always pay attention to that title rather than embrace a newly bought title that might sell even better.)

And every agent I know has a story of a little book that could. The book that was a hard sell, that didn’t have a big advance, that had almost no marketing or promotional budget attached and yet defied all the odds.

A great success story that exemplifies this exactly is agent Deidre Knight’s 90 Minutes in Heaven—a book that was not sold for a lot of money and certainly wasn’t released with a lot of hoopla. Initial print run was by no means huge. The hardcover sold modestly well but then when the paperback version released, an explosion happened. The book kept gaining traction. Word of mouth. The ground swell that money can’t purchase started to happen. In the end, I don’t know exactly how long the title stayed on the bestseller list but I do know that it was for more than a year. This book has now sold millions of copies.

So does a large advance equal large success?

The answer is yes and the answer is no. All the stars ultimately have to align.

Earn Out

STATUS: Typical Denver. 75 degrees one day. 45 degrees the next. I actually wore gloves this evening while walking home from the office.

What’s playing on the iPod right now? RAIN by George Winston

Generally speaking, the statistics are rather grim when it comes to authors earning out their initial advances. Of course I don’t have actual numbers at my fingertips, so what I can safely say is this: the percentage of books that never earn out is high—over 50% of the books sold (and probably reality is more like 80% but without actual numbers, why be more depressing?).

Beyond the statistics, there are actual several factors involved with an author potentially earning out.

1. The level of the advance. After all, it’s a lot easier to sell-thru and earn out if you only received $5000 as an advance for your book than if you received $150,000.

2. The format of the book. Hardcovers have a higher price tag so an author can sell fewer books but make a higher royalty percentage and thus earn out faster than authors who are publishing initially in let’s say mass market format. (Although mass markets have a better price point and thus have more potential to sell more copies in general but I think you guys get the picture.)

3. Royalty structure. The higher your percentages are for the royalties, the easier it will be to earn out.

4. How long your book stays in print. Often authors can earn out their advance over time so long as the book(s) stay in print.

For example, just this week, I received a royalty statement for an author who just earned out the first advance for a book that was published originally in 2005. The author is solidly midlist and has consistently sold steady over the last 4 years. The advance was a nice five figures and since the book sold well over time and the title never went out of print, the author is now earning royalties.

Ah, this is how publishing is supposed to work. An advance that is representative of how much a book will sell and then grow from there. It was hugely exciting to cut the check for royalties earned and I imagine that the author was even more excited to receive it!

What Agents Talk About When We Talk about Auctions

STATUS: Finishing up a client manuscript tonight.

What’s playing on the iPod right now? ME AND BOBBY MCGEE by Janis Joplin

Truly a scintillating topic. Kind of like watching golf. Earlier this week, one of my agent friends was conducting an auction so of course that got the whole discussion going about what we preferred—round robin or best bids auctions?

Funny enough, it’s not an either/or question because what is preferred (or what is conducted) always depends on the situation that is unfolding around any given project.

Now what I can say to you for sure is that most editors hate best bid auctions.

Why? Because there is only one round of bidding. That’s it. And if your bid doesn’t come in the ballpark of what other houses are bidding, then you’re knocked out of the running early. I can see why that would be frustrating for editors if they are really keen on a book.

So why do them? It’s a great way to shorten up an auction when the agent has already done a lot of talking to the various editors interested in the work. In other words, a lot of the pre-auction elements are already clear (like the level of excitement, the anticipated advance, what the agent’s expectation is). Then the best bid auction is to simply see all offers at once and then allow the author to choose the best house (and not necessarily a winner based on something like advance alone). Saves a lot of time and energy. Best bids can also work effectively if there is uncertainty on how many houses might participate in the auction. Everyone who attends is supposedly putting best offer forward. Can save a lot of headache if a publisher doesn’t show up to the auction.

Most auctions are probably round robins. This is an auction with subsequent rounds of bidding by multiple publishers until either a clear winner is declared or all houses hit their bid ceiling and only one publisher is still willing to go forward. Round robins work most effectively when there are numerous houses bidding. Not as great a structure if the auction is small—like with only 2 houses bidding. Still, it can be done.

Not to mention round robin auctions can last for days (which is exhausting for everyone involved as nothing else can really be accomplished if an auction is going on). Also, if an author has a clear choice for the editor he/she wants to work with, round robin might knock out the favored house too early in the process. That wouldn’t be good.

Interestingly enough, I have done round robin auctions that then evolved into a final round best bid. Basically when the auction had gone on and on, I let all the editors know that I’m only going to entertain one more round of bids so make it your best and final offer. I think my Grandmother would call that **** or get off the pot bid.

For the most part, I like to negotiate elements of an offer even within an auction and that’s hard to do in a best bid situation so I don’t tend to favor that auction approach. I think a better idea is what I call a two-round best bids. Each house involved in the auction knows it will get 2 rounds of bidding. The first round is for everyone to feel out the field (and it also allows me to say where I think their offer might be lacking). The second round is for everyone to truly get serious about the next offer as this will be the final round of the auction. It feels more effective to me.

And here I’m just touching on the tip of the iceberg but all these different strategies is what we agents talk about when we talk auctions.

Are you still awake? Didn’t think so but if you want to see a group of agents get lively, this is a good topic.

Time For A Cool Change

STATUS: I’m working on two different contracts this afternoon. So necessary, so time consuming, and always delightful when it concludes.

What’s playing on the iPod right now? P.Y.T. (PRETTY YOUNG THING) by Michael Jackson
(of course!)

It’s no longer okay for Publishers to say to me in a negotiation: “we have a policy that we won’t do that.”

Especially when I’m talking about royalty structures and for this rant, the royalty structure for a trade paperback.

Just to be clear, there are three main types of print formats for books. There is hardcover–which is of a certain size and has a hard cover covered by a dust jacket. There is trade paperback—which is usually the same size as a hardcover but with, funny enough, a soft cover and no jacket. Then there is mass market—which is the smaller soft cover usually associated with “pocket” size (although some of them are tomes that wouldn’t fit in a back pocket or otherwise).

Today I want to rant about trade paperback royalty structures. For twenty years, the “standard” royalty percentage authors earn from trade pb sales from publishing houses has been 7.5% flat.

Why is that? Why is the trade paperback royalty lower than the mass market version where “standard” starts at 8% and usually escalates to 10% (typically around 150,000 copies)?

Trade pb has a higher price point for point-of-sale so that’s not the reason. Yes, it’s more expensive to print than a mass but it’s not as expensive as a hardcover. And why is there no escalation?

Especially now when publishing is rapidly changing and there is a movement away from doing hardcover publication and doing original trade paperbacks instead—even for debut literary authors.

So why in the world are we stuck with an outdated royalty structure that doesn’t match how publishing is currently operating today?

And it’s not enough to tell me, “well, we’ve never done an escalation for a trade paperback royalty. It’s just not done here at our house.”

Just because it hasn’t been done in the past doesn’t mean we can’t talk about it in the here and now. Publishing is not the same as it was 20 years ago so why are the royalty structures?

Very good question I think.

I’m out. TGIF!

Foreign Publishers Getting Into The Electronic Game

STATUS: I spent four hours on the phone doing a variety of phone conferences. Maybe I should rethink a headset.

What’s playing on the iPod right now? IF YOU’RE GONE by Matchbox Twenty

In this year alone, my agency has done over 20 foreign rights deals. That’s a lot for an agency of our size. After all, we only have about 30 clients.

And here’s an important facet I’m noticing. Foreign publishers are now asking for electronic rights to be included in the translation deal. No surprise given all the recent developments in the electronic field but until this year, almost no foreign publisher asked for eBook rights for a work in translation.

That’s all changing and fairly rapidly. In fact, some foreign publishers are preemptively sending addendums to add the e-rights to their agreements. Which cracks me up enormously. I don’t mind accepting but only after a significant revision of the “addendum” and a negotiation of the rate.

But here’s what you need to make note of. The royalty rates being offered by foreign publishers for eBooks is all over the place. On the higher end, it’s 25% of net receipts. The emerging standard that I don’t agree with and fight it every time seems to be 20% of net receipts. I’ve also seen as low as 10% of net offered (heck no that ain’t happening) and I’ve also seen 15% of net which is way low as well.

So you published authors need to review those foreign rights deal memos you receive (if World wasn’t granted to the Publisher because than the Publisher subrights department negotiates the foreign deals and you probably won’t see the deal memo until after the fact).

Check if eRights are included and if you’re not sure, ask your agent. And if they are included and the rate seems low, you might also want to have that convo with your agent.

Calling All You "Angels"

STATUS: Grumpy. I’ve been doing contract discussions for the last two months with various publishing houses regarding the changing digital landscape and monies associated with it. Most publishers demand that electronic rights be sold at same time as the print rights but they don’t want to answer bothersome questions such as the Google Partner Program or the Google Settlement.

What’s playing on the iPod right now? UP THE JUNCTION by Squeeze

Or maybe another word that begins with an “A” and has exactly 6 letters as well. I have to say that the digital landscape is changing publishing and publishing contracts almost daily.

Take the most recent Penguin contract I received about four weeks ago as an example. Now publishers always reserve the right to change their boilerplate at any time. I get that. All I ask is the courtesy of being notified when they have done so.

Remember the whole S&S furor last summer when they deleted the crucial last four lines from their out of print clause—thus eliminating the absolutely critical sales threshold that allows rights to revert back to the author—and didn’t tell anyone that they had done so?

Well, this isn’t quite as egregious as that little contract fiasco but I’m miffed all the same. This time, Penguin has inserted a new clause that has become 9. (b) ii. of the contract and didn’t mention it.

Nope. Found it because I scrutinize every contract closely.

This new clause is what I would call a kitchen sink clause for electronic uses of a work. So broad it’s meant to cover anything currently in existence and things we can only imagine for the future. It’s also going to set a strong precedence of reducing the split of monies to authors for electronic display of rights—and yes, I’m talking about Google here (or any other entity of like nature) and all the revenue generated by electronic microtransactions or click-thru ads in association with electronic content etc.

The prevailing philosophy has been that the electronic display of content was a subright use of an author’s electronic/display rights. Handled under sublicense, standard split for this is 50/50 between author and publisher. This new clause treats this income not as a subright but as a sales channel with a royalty structure of 30% of net amounts received given to the author.

There’s a big difference between 30% of net amounts received and 50%. And I don’t care that right now I’m talking about pennies, really, because who knows what this revenue will look like 10 years from now. Twenty years from now.

The digital landscape is literally changing publishing daily and as usual, it’s up to we agents to fight unfair clauses that don’t allow the author of the work to participate equally in the revenue generated by their content.

Brenda Novak Auction to Start and Final London Wrap Up

STATUS: Getting ready to head out the office door. I do plan to do reading tonight from home.

What’s playing on the iPod right now? LUSH LIFE by Natalie Cole

It’s that time of year again! Time for the Annual Online Auction to Benefit Diabetes Research by the indomitable force of nature and wonderful author, Brenda Novak.

And I’m here to highlight that Nelson Literary Agency really stepped up to the plate this year and is offering a WHOLE page of items to be auctioned off.

Just to whet your appetite, I’m giving away breakfast with me at RWA and a writing critique with a 24-hour turnaround time. I will spend several hours on this critique—editing it just like I would a client’s manuscript.

Sara is offering a query-free submission.

NYT Bestselling author Jamie Ford is answering 10 Questions.

Sherry Thomas, query writer extraordinaire, is offering to help you whip your query into shape.

Mari Mancusi and Courtney Milan are offering opening chapters critiques.

Hank Ryan has her own page of good stuff!

And that’s just a brief glimpse of what is available. You might want to check it out.

But back to my London list as promised. I’m skimming through my notes and typing up what I see.

Germany
Looking for upmarket commercial fiction—not too literary
Crime fiction
Exotic and/or generational saga
Boy meets Girl with a literary voice
Commercial historical fiction

Finland Children’s
Literary fic as the market is strong
Fantasy
Science fiction is working

France
Fantasy
Chick lit
Historical romance
Historical fiction

UK
Romantic comedy with lit voice
Jackie Collins type novel
Literary vampires—like the Abraham Lincoln Vampire hunter or literary zombies
Books good for reading groups
Commercial women’s fiction
Mystery that is slightly cozy but has a dark edge
Urban fantasy
Paranormal romance
Horror (must be sophisticated)
Big historical fiction
Literary thriller

That’s all else she wrote.

LBF Pics

STATUS: Just had some wonderful Indian food before heading to bed. 8 o’clock is a typical dinner hour around here.

What’s playing on the iPod right now? NESSUN DORMA by Paul Potts

I heard there was quite a bit of chaos this morning as the fair opened but since I had a breakfast meeting off site, I missed the hoopla. By the time I hit the Fair floor around 10 a.m., everything had been sorted out.

I have to say that I did expect the mood to be rather somber but in the meetings I had, that was not the case. Editors from Germany, Finland, Japan and Brazil, all expressed optimism, were interested in many titles (although admitted that escapism was good) and had mentioned that book sales in their countries had remained steady. Some titles, such as James Hunter’s THE SERVANT, had really broken out. Something like 2 million copies in Brazil. That’s an eye popping number.

A Japanese editor mentioned that publishers there were aggressively pursuing the mobile phone reader market, which didn’t suprise me at all. Where digital is concerned, that country has a lot of early adapters.

I also had one UK editor that popped by my table simply because she was a blog reader and wanted to say hello. That was quite fun.

Here are some pics to tide you over until I can skim through my handy dandy notebad and pick out some tidbits on what is working abroad.

Here is the entrance to the LBF from the Warwick Road Entrance.

The escalator up to the International Rights Center floor.

On the floor of the International Rights Center. Agents, Rights representatives, and publishers hard at work.

View of the fair from above.

Sarah Rees Brennan in the S&S UK booth pointing to her soon-to-be released title THE DEMON’S LEXICON. She’ll be signing in the booth on Tuesday, April 21 at 1:30 p.m. (13:30)

Rethinking Contract Clauses

STATUS: Relaxing. Just about to do some sample page reading for an hour before hitting the sack.

What’s playing on the iPod right now? F.M. by Steely Dan

With all our recent deals, I’m definitely in contract mode this week. And there is a lot to think about.

With the Google lawsuit settlement happening, all current and future negotiations are going to have to address revenue split from Google advertising from the book registry. If the publishing house is participating that is. And don’t get me started on the whole topic of if the book is already on Google book search and is, indeed, searchable. We’ve been spending the last two weeks putting together letters for each individual client regarding their books and Google.

But that’s not all. The digital revolution is making us rethink contract clauses—even within the current standard language.

Take this for an example. My contracts manager and I got to talking on Friday about what is a rather an innocuous clause in the contract. In the royalties section, Publishing contracts always specifically state that no royalties will be paid for copies given away to promote sales or to charitable institutions etc.

Or similar language. It varies depending on house and contract.

Well, we were talking about electronic book giveaways done recently by Stanza, by Kindle on iPhone and even by Orbit—which I highlighted a couple of weeks ago (the Brent Weeks’s debut for $1).

And don’t get me wrong, I’m not remotely opposed to these kinds of promotions but I am thinking that perhaps an author needs to have a say in it and if they are to have say, then that needs to be in the contract—and dealt with in the copies given away clause. I think free ebook promotions can have strong impact but I also think the author should have input regarding how that ebook promotion might work. Little things like for how long will the promo last? How many copies will be given away? How will the publisher measure sales from said promotion? Interesting, no?

So now I’m thinking perhaps we need to ask for author approval on free copies done for special electronic promotions.

Suddenly, it makes that little clause a whole new ball game.

Agent Joe Regal Weighs In On Niffenegger Sale

STATUS: I feel normal. No cough. No sniffle. I’m so happy.

What’s playing on the iPod right now? WHERE THE STREETS HAVE NO NAME by U2

This is very cool. Audrey’s agent, Joe Regal, commented on yesterday’s entry. That happens so rarely, I didn’t want it to get lost in the comment section so I’m posting it here. My hearty thanks Joe.

I have a Google alert for Audrey’s name and have been watching the response to the news of the sale, and since this particular thread seems to be from a thoughtful group of writers, I thought I’d take a chance and weigh in.

First, as Audrey’s agent, I very much fought against the news of the sale coming out. It seemed likely to stir resentment, and I already expected reviewers to approach the book with knives drawn before any leak of the money involved. For instance, since the NYT never reviewed THE TIME TRAVELER’S WIFE in any way, shape, or form, how could they say positive things about the new book and not look kind of foolish? In my submission, I specifically mentioned this likelihood and begged editors not to discuss the potential auction or possible eventual sale price with anyone.

Needless to say, word got out anyway. I tried to talk Motoko Rich out of doing a piece, but the leaks were so broad that there was really no chance. Thus my somewhat exasperated comments in the article, once I realized the article would run whether I participated or not.

Another reason to keep the news quiet was precisely because of the inevitable Charles Frazier comparison. It’s a hell of a lot more than a nuance that, unlike him, we sold a completed novel, a brilliant book that is a step forward for Audrey as a writer. It’s weird, inventive, original, singular, and not necessarily as commercial as the first book, but she has grown as a writer and handled the second novel challenge by pushing herself to grow as a writer, with new challenges and new rules, none of which had anything to do with sales. All she could control (as I noted in the article) was the actual writing, not how people responded to it. So she focused on that and wrote a truly remarkable novel.

That the industry responded to positively isn’t just because of her track record; people genuinely loved the book. A few editors told me, “this is so much better than TTW!” That kind of irritated me, because I think TTW is a pretty great book, but I got the point: editors recognized she had grown as a writer. So, combine a great book with a great track record, and you have the closest thing to a sure thing in a very uncertain market, and publishers were eager to pay handsomely.

The key takeaway here is simple: write the best book you can and then sell it. Arguments that “she could take her time to write her second book because the mortgage was covered” are way off the mark. She didn’t sign a two book deal with the first or second novel because she knew how hard it is to write a good book and she didn’t want the pressure of a deadline hanging over her. It’s hard to herd cats on a schedule. Maybe if you’re a genre writer, OK, it’s possible, perhaps even necessary, but otherwise, keep your day job and write a great book and sell it when it’s done. In Audrey’s case, she kept her day job for years after publication of TTW; she was careful to live in a way that put the ability to do her work her way, on her schedule, before any other material needs. She protected her priorities. That’s discipline, and she had been practicing it on modest means as a visual artist for decades before she became a writer.

I hope this is useful information. All best wishes for luck and courage to all writers here working to write the best books they can.

Joe Regal

Update 2:54 p.m.
Kristin: Joe’s not knocking genre writers as his agency reps them as well. It also occured to me that maybe I should add the link to Joe’s website so y’all can check it out.

Thanks for appreciating my note. A risky thing to do, but I couldn’t resist. And sorry for the couple infelicitous phrases and typos. One clarification: I’m not dismissing genre writers; I’m saying that the rules are a little different. For instance, my colleague Markus sold a new crime writer, Josh Bazell, to Little, Brown in a two-book deal. The main character of his first book, BEAT THE REAPER, is designed to be a continuing character, and the house paid a nice advance because they’re investing not only in the writer but in that particular character. They don’t want to spend money to make the character a star (never mind the writer) without having the ability to spread that investment over two books and without feeling like they won’t have some time to evaluate whether they’ve “grown” the series. So while it’s possible we could have battled to make it a one-book deal, it would have been counter-productive — it wouldn’t have served the publisher OR the writer.

So all I’m saying is that the rules are different, because the conventions are different. If you’re a crime writer, for instance, you’re supposed to hand in that next book a year later, maybe 18 months, so the house can publish on a consistent schedule and build the series. That isn’t the expectation with literary fiction. No slight intended! Especially from someone who, if he has time to read anything but his own books (he doesn’t at the moment), reads genre.