Novel Advances Part 2: How Publishers Calculate Them
Before continuing with Nick Wolven’s argument against paying advances to first-time novelists, we need to duck back into Publishing 101 and define exactly what an advance is.
Mr. Wolven writes,
As I understand publishing politics, the idea of an advance is to cement a deal, to entice an author away from other potential publishers.
I have to wonder whether what he’s thinking about are auctions and pre-empts, territories into which novels only venture hand-in-hand with the author’s agent. Mr. Wolven’s article never actually mentions literary agents. And the idea that a publisher must woo a first-time author away from other lucrative publishing deals flies right in the face of the claim that demand for this first-time author has yet to be proven. If, in this notorious buyer’s market of an industry, several publishers are bidding for rights to publish your manuscript, then congratulations: there’s obviously demand for your novel.
So, I don’t know. Maybe Zadie Smith got to go with the highest bidder. But in the case of Joe Schmoe, which Mr. Wolven’s argument against advances is supposedly all about, publishing economics are fairly clear.
An advance represents expected sales.
In other words, as John Scalzi once put it,–”$3000 advance = the expectation of selling at least 1,200 copies of a $27 hardcover at 10% royalty. That’s 2,400 copies of a trade paperback at $13.50.”
Here’s another way of looking at it: The perfect advance (which doesn’t exist, because no one’s that good at estimating sales potential) earns out exactly as the last copy of the book sells, and the author never sees royalty check one. That first royalty check means the publisher has underestimated the book’s selling potential.
The advance doesn’t represent an additional risk the publisher has taken; the advance quantifies the risk the publisher has already chosen to take.
Obviously this only holds true when parties on both sides of the negotiating table are sane. But, certain Salon articles notwithstanding, sanity is the rule for successful publishers. Successful publishers know how to estimate sales. The advances they offer aren’t gambles so much as educated guesses.
That’s what an advance against royalties is: the royalties the publisher expects the author’s book to earn, paid up front in one lump sum.
So what does an advance of $0 say about the publisher’s confidence in their ability to sell the book? I think I’ll let you work that out between now and Part 3.
March 27th, 2007 at 6:00 pm
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