Writers’ Pay

Yes, writers really do get paid. Unless they fall for the “exposure” scam that’s reaching epidemic levels in the arts. But that’s a different post.

The Rule of Three applies here, as it does in so many areas.

First, there are writers who are on a salary. Technical writers, advertising copy writers, newspaper staff reporters, and anyone else who draws a regular paycheck. Not exactly exciting, is it?

Second, are the freelancers. They get paid by the piece, typically a set amount per word or per article. Malcolm Harris has an interesting piece in Medium on the economics of freelancing. The TL;DR is that the price per word paid to writers has not increased at the same rate as inflation. That’s certainly true in the genre fiction space. In science fiction’s golden age–roughly, the late thirties and early forties–the magazines paid between one and two cents a word. Today, rates are basically between five and ten cents a word, not the twenty-five cents (give or take) inflation would call for.

I’d also include ghostwriters in this group; my understanding is that most often ghosts receive a flat fee per book, regardless of how well it does.

One doesn’t get rich writing short stories, or even non-fiction for glossy, comparatively well-paying magazines. Famous–or at least well-known in your field, perhaps, but not rich.

The amounts are less than many non-writers would guess, but the payscale is simple.

Finally, we have books. This is the group most people are thinking about when they ask what writers make, and it’s the most interesting.

Bottom line, writers of books–fiction or non-fiction–get paid by the number of copies sold. How much? Well, that depends on the writer’s negotiation skills. But let’s use The RagTime Traveler as a reasonably typical example.

If you bought TRTT in paperback*, I got 9% of the list price. Yes, even if you bought it at a discount, my percentage is based on the full price. So each copy sold brings me about a buck forty.

* And my very sincere thanks to those of you who did!

Well, right now it does. But it’s more complicated than that.

There’s an elevator clause. Once y’all have bought 3,500 copies–that’s all of you, not each of you–my rate goes up to 12%. Even better, after 6,000 copies, I’ll get 15%.

Not complicated enough? How about the ebook? I get 40% on ebooks, up to 10,000 copies. That sounds really nice. 40% of $15.95 is $6.38. But wait!

My share on ebooks isn’t based on the cost of a paperback. It’s a percentage of what the publisher receives after the seller takes their cut. Amazon’s cut, for example, varies between negligible and outrageous, depending on the list price of the book. (Other sellers work along the same lines, but the exact percentages vary.)

But let’s run with it. As I write this, the Kindle edition of TRTT is selling for $9.99. Amazon will keep 30% of that–call it three bucks. Of the remaining $6.99, I get $2.80. Not quite as good as that mythical $6.38, but a bit better than the paperback rate.

Of course, if the publisher decides to run a sale to encourage people to pick up a copy, my cut drops in proportion. At a sale price of $4.99, I’ll only get $1.40. If they really get aggressive and run a limited-time promotion at $0.99, Amazon takes a much larger cut. As a result, my share would be fourteen cents.

Great fun, huh?

But wait! It gets even more complicated.

See, there’s this thing called an “advance*”. This is (generally) the publisher’s best guess for how much the author’s share of the money will be over the course of the book’s lifetime.

* Historically, this was money paid to the author before the book was finished. The theory was that he could live on the advance while writing the book. Needless to say, this was one case where theory and reality quickly diverged.

There are a number of reasons why it makes sense for the publisher to pay the author up front, though “tradition” certainly ranks high on the list. And, it should be noted, not all publishers pay advances at all, or pay a fixed amount, regardless of how well they expect the book to do.

But in any case, if the writer gets an advance, she doesn’t get any more money until the publisher recoups the advance from the writer’s share of the book’s proceeds.

I got a thousand dollar advance for TRTT. That means I don’t get anything more until it sells about 700 copies. (I’m ignoring the ebook here, as the majority of the sales have been paperbacks.)

Selling enough copies to “earn out” is something of a big deal. Not because you’re getting rich, obviously, but because publishers will look at how well a writer’s previous books did when deciding whether to buy the next one. Earning out is a convenient flagpole: it shows the book did about as well as the publisher expected, and that’s a positive indication for future works.

I’ve simplified this discussion. When you throw in “actual returns,” “reasonable reserve against future returns,” “remainder sales,” “reuse,” and all of the other contract clauses about money, it gets really messy.

I hope you’ve enjoyed this little peek into the darkness. I’ll leave you with a couple of simple questions:

Have you bought The RagTime Traveler?

Wouldn’t you like to have it in electronic form?

Pricing

Google I/O is tomorrow, so I’ll be snarking at their latest plans for world domination on Thursday. Today, though, let’s talk about Amazon’s latest move toward global conquest.

I mentioned it last week. Amazon has changed their policy regarding third-party bookresellers. In brief, when you search for a book on Amazon, it may not default to Amazon’s listing. Depending on where you are, what other booksellers are offering the title, and other information, the default “Add to Cart” button could be somebody other than Amazon, with the Big A’s listing being relegated to the “Other Sellers on Amazon” section of the page.

That sounds good for the shopper: who wouldn’t like getting a better price? But there are implications that have the publishing industry in a bit of an uproar. The Authors Guild, for example, believes that Amazon’s move will result in lower income for publishers and authors. If you didn’t read their press release last week, you can find it here.

Amazon’s position is that they’re simply bringing book sales into alignment with the rest of the site. And there’s some truth there.

But the publishing industry works somewhat differently than most others*. When you buy a washing machine, a computer, or box of cereal, the money goes to the seller, they give you the item, and the transaction is finished. That item comes out of their inventory–they’ve already paid the manufacturer. And if they can’t sell all of the washing machines, computers, or cereal they’ve stocked, they take a loss.

* I won’t speak to music and other arts; I don’t know enough about typical contracts between the creators and the sellers.

On the other hand, if you buy a book–and to be clear, I’m speaking only of new books here–those sales are reported back to the publisher. Why? Well, for starters, the publisher has to pay the author, and that payment is based not only on the number of copies sold, but (in some cases) the price the book is sold for. Furthermore, if the seller doesn’t sell all of the copies they bought, they’re not stuck with them in inventory. They can send them back to the publisher or destroy them and get a refund.

How does that make a difference? Well, many of those third-party sellers advertise really, really low prices. Like, in many cases, less than a dollar. They make their profit in “shipping and handling charges” that far exceed the actual cost of dropping the book in an envelope–but those fees aren’t counted as part of the purchase price.

So what happens if somebody sells a new copy of The RagTime Traveler* for $0.01 (plus $7.99 shipping and handling)? Well, for starters, Dad and I probably get nothing. According to our contract, we don’t receive royalties on sales where the publisher gets less than it cost them to print the book. Realistically, if the seller is going to make a profit, even with those fees, they’re can’t pay the publisher’s wholesale price.

* Let me be clear here: nobody is selling TRTT at that price. Yet–but that could change after the book is actually published.

Maybe they cut a sweetheart deal with the publisher and got the books at a steeper discount than normal. That can happen, especially if the seller gives up the right to return any unsold books. If their wholesale price is less than 56% of the cover price (which it would almost have to be for them to make a profit), but more than the cost of production, Dad and I do get paid–but only half the normal rate.

But let’s be honest here. As the Authors Guild points out, it’s unlikely that those low-ball sellers have bought their books from the publisher. From their press release:

The Authors Guild has spoken to several major publishers in the past year about where all these second-hand “new” copies come from, and no one seems to really know. Some surmise that they are review copies, but there are far too many cut-rate “new” copies for them all to be review copies. Could they be returns from bookstores that never made it back to the publisher? Did they fall off the back of a truck? We don’t know.

(There’s also speculation in the comments that those books could have come from the publisher: returns being resold at liquidation prices rather than destroyed. In which case, see two paragraphs up.)

And one other point: publishers look at how well an author’s previous books have sold in deciding whether to put out his next one. Any sales that don’t earn a royalty also don’t get counted in making that decision. So our hypothetical one cent copy of TRTT actually reduces my chances of finding a publisher for my current novel-in-progress.

So, bottom line: I doubt Amazon will rethink this policy change. They have a long history of making moves that lower prices to consumers, even if it means taking a loss for an extended period. It’s all about cornering the market. And in this case, Amazon still gets paid. The seller gets paid. The publisher might get paid. And the author? If they don’t like it, they can self-publish and set their own price.

Except, of course, if they want to sell through Amazon, in which case they need to go through Amazon’s self-publishing arm which bases author royalties on sale price.