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How publishers like us pay authors and illustrators (for beginners)

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Book publishers pay authors and illustrators in various different ways.

But here is the way that we (with a tiny handful of exceptions) pay for books… and it’s pretty standard for publishers who publish books for the general public, regardless of their size.

We agree to pay an author/illustrator an advance against royalties. A proportion of this is paid when we sign the contract with the author/illustrator; a proportion is paid on the delivery of the work that they’ve agreed to do; and a proportion is paid on the publication of the book.

This is a bit like a “debt” that the author/illustrator owes us – a sort of “pit” that has to be filled up, which is how the “debt” is repaid.

What fills up the “pit” is royalties. We pay authors/illustrators a percentage of the money we get from any retailer (bricks and mortar and/or online). The percentage takes into account all the other things we’re paying for for print or digital publishing – editorial, publicity, marketing, design, financial management (chasing people for money etc) – and the specific costs associated with print publishing (the cost of printing and binding a book, the cost of warehousing it, the cost of transporting it, and the cost of processing – and often pulping – returns).


a book pulping machine

Another thing that fills up the “pit” is a share of the revenue we earn from selling rights that the author/illustrator may have granted to us (and, at Nosy Crow, we only buy books on the basis of having rights in all languages). So, for example, if a publisher buys rights to publish the book in German, the author’s share of that money goes into the “pit”.

The royalties and the rights revenue shares aren’t exactly the same for all publishers, but in my experience, and certainly where Nosy Crow’s concerned, there’s remarkably little variation, actually, within books that are of the same type (so there’s a difference between the royalties and rights revenue share we pay the author of a picture book (in which situation we’re paying an illustrator too) and the royalties and rights revenue share we pay the author of a novel, but not between the royalties and rights revenue share we pay to one novelist and the royalties and rights revenue share we pay to another novelist… and not, really, much variation between the royalty rate that we’d pay a novelist and any other publisher would pay a novelist). Meanwhile, we have to do the very best we can with all the books on our small, new list, regardless of how much advance we’ve paid, and we also spend money on different kinds of marketing regardless of the amount of advance we’ve paid.

When the “pit” is full, the surplus earnings are given to the authors/illustrators, usually twice-yearly.

Sometimes the money earned from royalties or rights revenue isn’t enough to fill the pit, but the advance is non-refundable, so that gap between the advance and what the author/illustrator actually earns is our problem as the publisher, not the author/illustrator’s.

We buy some books directly from authors/illustrators (we do so in the case of some of our strongest-selling authors/illustrators, in fact), and we buy other books from authors/illustrators via agents. In theory, I suppose, we could pay authors, particularly first time authors, much lower royalties than we pay to authors who are represented by tough agents. We don’t. It would, in our view, be neither fair nor, in anything but the short-term, commercially sensible. Authors/illustrators talk to each other, now, given the opportunities to connect via social media, more than ever, and there are various sources of information and advice like The Society of Authors. So you’d quickly be found out and an author/illustrator who feels cheated by their publisher isn’t a happy author. It’s worth saying, of course, that, agents take a percentage (10% – 15% of the author/illustrators earnings from publishers as a rough rule). So you have to be pretty sure you’re going to get more money going via an agent before it’s financially worth having an agent, though agents offer advice and expertise and administrative support too so you might want to take that into account.

But, as I say, actually, there’s not much variation at all in the royalties or rights revenue shares we offer.

What varies more is advances: established, and, in some cases, agented authors/illustrators often end up with larger advances than newer and unagented authors. This means that they have more money up front… but a bigger pit to fill!

Some authors/illustrators and their agents feel that a high advance on a debut book guarantees that a publisher will try particularly hard to sell a book in order to earn back the advance. But I know of books that have gone on to be bestsellers on the basis of a small advance, such as The Gruffalo, for example, or the first Harry Potter book, and there are other books that have gone for what press releases describe as “a substantial six-figure sum” that have not gone on to sell anything resembling a proportionate number of copies… which may make publishers (any publisher, because when a publisher pays a lot of money for a book, the publishing community knows about it… and we can see what the sales figures are like when we look at Nielsen Bookscan) reluctant to take a punt on the author’s subsequent books.

This year (and bear in mind that we write several of our books in house), we’re budgeting to spend 15% of our book revenue on authors/illustrators royalties/rights share, but we’ll also have to take the hit on any advances that we judge won’t earn out – i.e. where the pits are unlikely ever to be full. I can say that there are already a couple of books for which we at Nosy Crow have had to “write off” a proportion of the advance: we have acknowledged that we are unlikely ever to be able to fill up the “pit”. We’ll have to add the (small) cost of these “write-offs” to the 15%. I know of publishers (still in business because of the way that the rest of their business model works) who have overestimated the value of books when they pay advances to the point that in some years the cost of write-downs are as high, or almost as high, as the cost of authors’/illustrators’ royalties/rights revenue. Sometimes one really hefty advance combined with very low sales can push a publisher into loss. But even when publishers are not playing that kind of publishing game – and we’re not – then I don’t know of any publisher whose overall author/illustrator costs aren’t higher than the costs of the royalties and rights shares because of the cost of “written off” advance money.

There are some publishers who pay authors and illustrators on a “flat fee” basis – so they pay an amount up front, but it’s not an advance against royalties. We sometimes do this, particularly for illustrators who are providing a small number of illustrations for a novel. But it stops an author/illustrator participating in the ongoing success of a book, and we think they should, so it’s something we generally avoid.

Some publishers are experimenting with different ways of paying authors/illustrators: not paying an advance but, in return, offering higher royalties; or a profit-share model, for example (but, as an author, you’d probably want to look carefully at what the publisher is counting as “profit”, i.e. what costs have to be subtracted from the revenue before you get to the “profit” to be shared).

Some publishers are setting up subscription models, and authors/illustrators get a share of the revenue generated either from full packages of books to which they contribute, or in the block of time in which their particular books are offered.

And, of course (and this is the subject for another post), some authors are choosing to publish either digitally or in print, by themselves.

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17 Responses to “How publishers like us pay authors and illustrators (for beginners)”

  • Emmanuel

    Thanks for getting in touch. There are submission guidelines in the Contact Us section of the site. I strongly suggest you send material electronically. We are getting a lot of submissions at the moment, so it might take us a while to get back.

  • I have three books to publish so I want to know when to submit my manuscript and how are mine going to receive my first payment before I submit my full manuscript

  • Thanks for writing in with your question. Many publishers, including Nosy Crow, accept submissions, so check on websites for guidelines on how to submit your work. As the blogpost above makes clear, I hope, of we want to publish someone’s work after we have read it – and we don’t offer before we’ve read it – then we generally offer an advance against royalties. We have many more unsolicited submissions – around 5000 a year – than we would want to publish, given that we publish 50 new books this year, and put primary duty is to publish well those people we have committed to publishing, rather than to sift through unsolicited manuscripts, so it can take us a while to get back. Some people worry about copyright, and are afraid publishers will “steal” their stories. The first thing to say is that there’s no copyright in ideas. The second thing to say is that you can mail yourself a copy of the manuscript with a dated front page of a newspaper and don’t open the envelope: keep it sealed and with its (dated) postmark stored away. If anyone did “ steal” your story, you’d then have strong proof that they’d done so.

  • Awesome transparency guys and very clearly explained. One of the problems I had with my publisher was a lack of transparency on earnings and it’s good to see that isn’t the case with every publisher. This is exactly the type of thing I wish I’d read first, oh well, I’ll be ready for my next book :)

  • Kate, I’ve heard your idea about mailing envelopes before, in the art world. I wonder if in these days of electronic communication, whether emailing your work to yourself, or uploading an untouched document to the cloud would suffice? Electronic records are cheaper, take up less space, and provide an automatic record of time, and if you mailed to multiple email addresses, you’d theoretically be insured against individual websites going bust.

    Your article is, as others have said, excellent. It provides much needed clarity on how publishing works for those of us who don’t have experience in the field.

    P.S. Pulping machines make me sad :(

  • Thank you, Tink, for your comment. I don’t know if electronic sending would work or not: I’m not a lawyer, and, frankly, it’s not an issue that I come across often, and never with experienced authors/illustrators. But it is something that new authors sometimes ask us. To be sure, I would still say to authors/illustrators that they should mail themselves documentation, as I have suggested above if they are anxious. The sealed envelope with the postmark is the key thing. Obviously, keeping records of correspondence is helpful too.

    There are few things more off-putting than an author with no track-record writing to say that they will show you their idea if you sign documentation (that you won’t steal it, that you won’t disclose information about it) first. I can’t think of an instance when I’ve agreed to do so.

  • To whom it may concern, I have over a hundred children’s stories, and over a hundred love poems. In the last six years two of my poems were selected in a contest, and are now in the Public Library in some poem book. In the year 2008 I was in an accident. I’m now retired and somewhat disabled. Living on Social Security that just pays my monthly bills. Laid up from accident I started to write stories, and found it hard to stop. I would be happy to sign them all over to someone who can get them edited and published. Of course I will like a little royalty of at least 25% given you 75% ownership. If you can help me with my stories please let me know. As an Inventor / Idealist who has never been successful yet. I have a very, very wild imagination for coming Up with stories. Several publishers all liked my stories and said they would sell , but they wanted money. Remember I’m poor from accident, I only have stories and poems to offer. Leonard r Griffin, 636-734-7441.

  • Dear Nosy Crow,
    I’m an illustrator working independently with an author who is self publishing. I know this is going to sound crazy, but bear with me.
    We are working on trade, and a small amount of cash up front. We have agreed that once her book is in print and she is selling copies I will get a percentage of sales.
    The question I have is: what percentage should I ask for?
    Respectfully,
    Brianna

    Ps I have worked with self publishers before, for a flat fee, and swore I would never do it again, but this is an exception that is worth it for me.

  • Hi, Brianna

    We can’t comment on your deal, but if you’re in the UK, I suggest you might contact the Society of Authors or the Association of Illustrators. If you’re not, then maybe look up similar organisations where you live.

    Hi, Cas

    We can’t comment on your deal: this is commercially sensitive stuff, and the devil is in the detail. It is probably the case that picture book illustrators tend to get a higher advance, but often the same or very similar royalties, compared to picture book authors. This is because of the considerable time investment required in illustrating most picture books, compared to the relatively short time it usually takes an author to write one, but it’s really hard to generalise.

  • Hi guys

    Great article, I am wondering if the advance and royalties paid to an illustrator is the same as to an author. As an author I’ve recieved a standard $500 advance and 5% royalties on my picture books, and I always just assumed the illustrator was offered the same. On reading your article it struck me that I’m not sure. Would love to hear your angle on it.

    Cheers

    Cas

    • I’ve never heard of a ‘standard’ advance; for new authors/illustrators, it’s important to know that it’s all negotiable. There’s nothing ‘wrong’ with a $500 advance, but if a publisher is using the word ‘standard’ that may be a negotiating ploy. When I debuted as a children’s book author my advance was $3500.00. I dunno, maybe that was my publisher’s ‘standard’ for unknown writers, but I am quite confident there is no industry ‘standard’.

      (I filled my ‘pit’ [paid back the advance] and then a number of royalty checks followed until the book went OOP).

      At least in established publishing houses, as far as I can tell, author/illustrator splits royalty and other rights 50-50 (when they’re not one and the same) in picture books. My contract stipulated a x% royalty (x+1% above certain quantity sold) , but noted separately from the stated % amount that this was split with the illustrator (I’m saying in the case of my contract a casual reading could’ve mistaken x% for what was actually one-half of x%).

      If you don’t have an agent, I recommend one pony up for an intellectual property/contract lawyer.

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