Wednesday, April 29, 2009

The Royalty Advance

We call it the advance and it can range from $1 all the way into millions of dollars. Many are in the thousands of dollars range. With all the other changes that are taking place in the publishing industry, publishers are messing around with the advance as well. Not that long ago, Chip MacGregor was complaining about Random House wanting to pay the advance a year after the book releases

Previously, I have said I don’t like the concept of the advance because it puts the author in a position of owing the publisher. If the book doesn’t earn out, the author will be unable to repay the debt. That is if you view the advance as something the publisher pays the author in order for the author to live while completing the work. We could also look at the advance more like an earnest payment. By paying an advance, the publisher is promising to publish the book, but if they don’t the author walks away with the earnest money, much like when an offer is made on a house people put down earnest money as an assurance to the home owner that the buyer will complete the purchase.

The author with a contract is in a difficult position. Before signing, the author had the potential to sell his manuscript to another publisher, but now it is off the market with only the hope of royalties that may never come because the publisher can pull the plug at any moment, based on current market conditions or whatever. The advance, then, is the incentive the author has to place herself in this position.