Royalties

Via a link form Brandon Sanderson, a post about royalties:
[You must be registered and logged in to see this link.]

Thanks Chris! Very informative!

Thanks for the link. Very easy to read and good explanation. Most authors don't realize any of this. I am not saying ones here, but most that I deal with.

I don't like the way he referred to an advance as a loan. That's inaccurate, since loans have to be paid back. Advances don't.

I have contracts with three houses. None pay on the cover price. That would be too simple, I guess. Mine are on the net, and there's no one net price. Different customers get different net prices, none of which are disclosed to me. There's also a paragraph in all my contracts discussing that "other expenses" (not described) are deducted from the net. The overseas stuff as described in the contract is pure gibberish to me.

I suspect my contracts suck. I do make decent money off my books, but could probably could have made more if I knew what I was doing. For instance, I never thought to ask what the potential market of any of my books are, which directly affects if the sliding percentage per # sold makes sense. Oh well. Since I never had an agent or even consulted a lawyer, I can only blame myself.

You are paying the advance back. You are paying it back through the royalties you get. Then when the royalties pay it all back you get cash in your pocket for the rest of the books that are sold. That is what he means by loan.

I understand that, but it's still not a good descriptor. When I get a "loan" from a bank, it's not an advance against earnings. It's money that they expect back no matter what I do with it or how successfully or unsuccessfully I invest it. An advance is money given me, which I earn out. If I don't earn it out, I don't give it back. That's what makes it not a loan as conventionally understood.

If you want to see how the word "advance" is really misrepresented, visit Ryan Tate's (Tate Publishing) blog. He calls an advance a loan, too, and acts like it's a bad thing for the author (when what he wants is a reverse-advance from the author to him).

I think the descriptor was used to get people to understand what she was saying. I'm not sure it was the best word to use but it worked for the picture she was describing.