Don’t cry for me: explaining the weird economics of the publishing industry

March 22nd, 2007 → 12:25 pm @ // No Comments

A clarification from a point I made in in yesterday’s cuddlefest, prompted by a couple of comments and couple of private emails I’ve received.

It’s true: I won’t ever receive royalties from Feeding the Monster, but that’s not because I’m being taken advantage of or being underpaid; if anything, it’s because I was overpaid at the front end of the deal. For the most part, authors are paid advances for their books (I say for the most part because it’s certainly true that some writers work on books in hopes of enticing a publisher after said book is completed). In publishing, the term “advance” is a bit of misnomer, since the author will never be asked to return an advance if he doesn’t make it back. (Well, almost never: in 1996, Random House sued Joan Collins, claiming she had delivered an unpublishable manuscript. They lost.) And the vast majority of books don’t earn out their advances. This is especially true in non-fiction, where the research costs and time it takes to finish a project generally mean a publishing house can’t offer, say, $25,000, which they can do with a first novel.

This creates an odd system in which the author has no real economic incentive to sell more books. (That’s a bit simplistic: future advances are effected by past sales figures, although this is less true in non-fiction — where books are seen as more topic-dependent — than it is in fiction. Plus there’s the ego factor.) If it seems as if under this model, publishers must lose money on a lot of books, that’s because that’s true…although not as true as it may seem as first. An author generally needs to sell a bit more than twice as many books to start earning royalties as a publisher needs to sell to break ever, because the publisher gets somewhere around 2x as much per book as the author does. (Ex: author X gets a $100 advance from publisher Y. Author gets $2 per book; publisher gets closer to $4. Publisher needs to sell 25 books to start making money beyond that $100 advance; figuring in another $25 or so in printing, labor, and other attendant expenses on the publisher’s part, it would need to sell about 31 books to clear a profit. The author, meanwhile, would need to sell 50 books before he earns out his advance.) So, for the most part, my shameless shilling isn’t because I’m hoping to see more dough rolling in at the end of the day. It’s because I crave affirmation. And I crave readers.

All of this raises an interesting question: how is it that publishing houses stay in business? The (also slightly simplistic answer): because of the Stephen Kings of the world. So thanks, Stephen, for helping out with my advance. Since you’re a big Sox fan, I know you don’t mind.

Post Categories: Joe Posnanski & The Soul of Baseball

One Comment → “Don’t cry for me: explaining the weird economics of the publishing industry”

  1. vinnyvincenzo

    17 years ago

    Ok, so you wont be upset that I bought your book used.

    I’d still prefer you bought it, but what can I do. But remember: you really don’t want someone else’s greasy paws all over what is sure to be one of the most cherished volumes in your library.

    — Seth


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