The Basics of Advances
Once upon a time, as legend tells it, advances on a book flowed freely from the mouth of the Publishing River, soaking every author with a moderate track record and a hot new property to pitch. But the rise of indie and the shift of the publishing model has changed a lot of things, not the least of which being that advances are far less frequent and lower than they once were. Some authors feel that’s a sign of the end-times for the industry, while others (like me) think it’s less of a big deal.
For anyone not familiar with publishing lingo, let’s knock out a definition real quick. An advance is when a publisher offers an author a chunk of money for their book, let’s be optimistic and say $10,000, upfront upon agreement to publish. However, this is not bonus money as some people believe, it’s more akin to borrowing against your own royalties. See, now the author has a 10k “debt” to fill in. I used quotation marks because they’ll never be asked to pay the money back out of pocket, however the publisher keeps their royalties until they’ve paid back the 10k. This is called “earning out” an advance, where you’ve made back the initial money and have started being paid in royalties once more. Thus, an advance is just what the name implies, you’re getting a big chunk of payment upfront and then nothing more until that amount is paid back.
I’ll be honest with you all, for a long time I didn’t actually see the point in advances. Lump sums are harder to mentally budget and allocate than a steady stream of cash pouring in from royalties, and from what I’ve heard some publishers use bigger advances to sell authors on a smaller royalty percentage, which can often be a bad deal depending on the sales. But as I’ve learned more about the industry I’ve started to understand the uses of this tool, so I wanted to share those lessons with you folks.
Advances Give the Publisher Skin in the Game
No publisher wants a book they’ve signed to fail. That would be stupid, and bad business, and really just make no sense at all. Every time they spend the money on editors, covers, formatting, etc, they are hoping the book will be a grand slam that earns them enough to buy a yacht made of cocaine. That said, there is a large difference in motivation between a book they’ve published and a book they’ve published while sinking our optimistic $10,000 into. If the non-advanced book does poorly, that sucks, but it’s part of the gamble. If the 10k advanced tanks, that’s a fair chunk of money they know they aren’t going to recoup through royalties. This means that even if every other element in the two books is equal, the publisher has a fiscal incentive to promote the one with an advance more aggressively. That one needs to sell to make the accounts balance, the publisher is more fiscally invested in its success.
For most authors I’ve talked too, this aspect right here is the biggest element of wanting advances. It’s like the publisher is investing in the book, putting their own money in the game, and promising that they’re going to do all they can to make the book succeed or else they’ll take a loss on the project. And to be fair, in a world where we’re constantly reading tales of publishers shutting down unexpectedly or tossing books they signed into the wind with no promotion, it’s perfectly reasonable to want some assurance, especially if the author is dealing with a publisher they have never worked with before. To this day, I’ve never been big about negotiating for advances, however I also have to admit I’ve been working with the same companies who have earned my trust for years now. If I was building a publishing relationship with someone new, there’s a good chance I would try to get an advance as a sign of commitment, and that would make things tougher because…
Advances are Drying Up
Listen, right now we have to draw sort of a line in the sand between the Big authors and the rest of us on the mid-list and lower. Yes, Neil Gaiman and Jim Butcher and J.K. Rowling are going to get huge advances for their projects. They have proven their ability to sell, to generate revenue, so it makes business sense for any publisher to back a dumptruck full of cash into their driveways during negotiation time. For the rest of us, it’s a little more complicated.
The digital revolution did a lot of things to our world, and a shitload of things to publishing as a whole. Among those changes were the rising of the indie tide which allowed writers like me to even be on the scene in the first place. One of the other big ones, however, was the proliferation of digital books. Aside from convenience and ease of use for the readers, that shift impacted the publishing industry in a big way: minimal production costs. Before e-readers, the cost of a book was more than just editing and formatting it, they also had to produce each copy. Physical books that required time, resources, and transportation, all of which have costs of their own. That’s still around, sure, but not nearly to the same level it once was. Selling e-books is so much cheaper, once the book is finished there are literally no more associated production costs (marketing and the like are another boat). People just click and a copy arrives on their device. This means that the cost of every book is far lower for the publisher, and that translates to a simple business truth: publishers can afford to take more risks than before.
That impacts advances pretty directly, because it makes a new business model viable. Rather than doling out 10k to an author you think will sell well, they can invest that 10k in creating 10 other books instead. 10 more books, with 10 other sales progressions, and all it takes is one of them to do great or a couple to do moderately well to make back the investment of all 10. Low production costs allow for diversification and greater extension into the market, rather than betting big sums on authors who are expected to, but don’t always, produce sales. I’m not going to say this is the only reason advances seem to be getting rarer and rarer, in fact I’m positive it’s not. This is just one of a million other factors, most of which are way above my paygrade, that have contributed to the advances becoming rare. So, with advances being less frequent and harder to get, the question becomes…
Should You Fight for an Advance?
Like pretty much everything I talk about related to money or art on this blog, there’s not a concrete answer to give. Your situation is your own, and no one will have the exact same circumstances as you do. Big lump sum or steady stream are very different payment methods, and I’m not going to tell you which is best for you. I can, however, talk about how I view the options and maybe give some points to consider.
For me, even now, I’m not huge on fighting for advances. I’ve gotten a couple through Tantor, nowhere near that optimistic number we’ve been kicking around though, but it was never a big sticking point of the negotiations. Working indie for me is all about consolidating small revenue streams together until I’ve got enough to live on, and I’d rather have another stream than a big chunk of cash followed by nothing.
There are definitely times it’s worth pursuing, however. Working with a new publisher is a big one, as we discussed above, since it’s a show of faith from them. If you have a project that’s appealing to what you fear might be a limited audience, sometimes an advance will be more than you expect to earn in royalties from the book, so at that point it’s a slightly safer bet for you. And, of course, anytime you’re in a fiscal situation where you actually need a lot of money upfront an advance can be a life-safer. Don’t be afraid to go for it, if an advance is what you really need, just be prepared for a probable uphill battle. Or, if you don’t really need one, maybe consider sacrificing it for a larger slice of the royalty pie or other concessions on the contract. You know you and your work best of all, so don’t be afraid to make the fiscal choices that set you up for success.