If you’ve ever considered becoming a writer, surely you’ve heard the old expression, “Don’t quit your day job.” But what can you really expect as far as income is concerned? Let’s first explore traditional publishing. When it comes to trying to determine advances for debut fantasy and science fiction novels Tobias Buckell is the best source I’ve come across, and his data seems to stand the test of time. His first author survey contained data from 78 authors and his second one included 108. He concluded that for debut authors you can expect:
- For fantasy a median advance was $5,000 with an average of $6,494
- For science fiction the median advance was $5,000 with an average of $7,000
- 58% sold with an agent and 42% without. Agented advances had a median of $6,000 (average of $7,500) and unagented came in at $3,500 (average of $4,051)
Now considering that most books don’t earn out their advance (only 30% according to the New York Times and 20% according to agent Kristen Nelson who blogs on PubRants) this means the advance is the only money that an author will ever see. For those that are not familiar, an advance is basically a loan that the publisher makes to the author before books are available for sale. Basically as books are sold the royalty that the author is due is kept by the publisher until the amount earned exceeds the advance granted. If there are too few books sold, the author doesn’t have to pay back their advance, but they also won’t earn any royalty payments.
Generally in the fantasy and science fiction industry three book deals are quite common. Let’s take the “best case” scenario from above and assume a $7,500 advance per book with an agent attached. So what that means is the author’s total advance would be $22,500. But keep in mind that from that the agent’s commission must be paid (15%) and the self-employment tax (which is 15.3% which breaks down to 12.4% for social security and 2.9% for Medicare). Considering that you always responsible for the “employee share” the “extra” tax for being self-employed is 7.65%. Once these deductions are made the $22,500 advance becomes $17,404.
But not all that money comes in one big check in a single year. Usually there is a payment schedule which looks something like this:
- 1/3 when the contract is signed
- 1/3 when the manuscript is accepted
- 1/3 when the book is published
While it’s true that I wrote all my books before signing my deal, the usual case is that the author will have one completed novel and have another two that are on a scheduled to come out one year a part. A typical schedule would like like this:
- Jan 1, 2013 – Contract is signed, first book is submitted to editors ($5,801 signing bonus)
- Jun 1, 2013 – Edits to book #1 are accepted ($1,934 acceptance payment)
- Dec 31, 2013 – Book #1 is published ($1,934 publishing payment)
- Jan 1, 2014 – Book #2 is due for submission
- Jun 1, 2014 – Edits for book #2 are accepted ($1,934 acceptance payment)
- Dec 31, 2014 – Book #2 is published ($1,934 publishing payment)
- Jan 1, 2015 – Book #3 is due for submission
- Jun 1, 2015 – Edits for book #3 are accepted ($1,934 acceptance payment)
- Dec 31, 2015 – Book #3 is published ($1,934 publishing payment)
So this means that the author receives:
- $9,669 in 2013
- $3,868 in 2014
- $3,868 in 2015
Considering that they probably spent at least six months, and probably more like a year, in 2012 writing the first book that means an average of $4,351 a year or $363 a month. It is imperative that the author meets their deadline for the books that were signed. Most contracts have provisions that require the author to pay back the signing bonus if they don’t meet their schedule.
Now let’s consider that the books end up selling well such that the author will earn beyond their advance. In such a case we have to look at the typical royalty structure. I’m going to use numbers from my contract which I’ve been assured by my agent are pretty much industry standard.
- Hardcovers 10% of LIST on the first 5,000, 12.5% on the next 5,000 and 15% on all copies thereafter
- Trade paperback 7.5% of LIST for all copies
- Mass market paperback 8.0% of LIST for the first 150,000 and 10% thereafter
- ebooks 25% of NET for all copies
Okay so let’s consider a few scenarios for how the books might be released. In the first example let’s assume a $14.95 trade paperback and a $9.99 ebook. Let’s assume that the there is 15,000 books sold of the first book, 12,500 for the second, and 10,000 for the third and the print to ebook ratio is 80% print and 20% ebook. This means there would be a total of 37,500 books sold (30,000 print & 7,500 ebooks) because ebooks generally net the publisher 70% (the other 30% staying with the online retailer) the total income would be:
- Print: 30,000 x 7.5% (royalty) x $14.95 list price = $33,638
- Ebook: 7,500 x 25% (royalty) x $9.99 list price x 70% (net) = $13,112
- Total income = $46,750 but once the agent and self-employment taxes are removed that leaves $36,161 total or $9,040 spread over the 4 years.
Another possibility would be for the publisher to choose to do mass market paperbacks. In this scenario they probably expect to sell twice as many copies but at a price of $7.99 for both the ebook and the print book. So that would yield:
- Print: 60,000 x 8.0% (royalty) x $7.99 list price = $38,352
- Ebook: 15,000 x 25% (royalty) x $7.99 list price X 70% (net) = $20,974
- Total income = $59,326 total income with $45,889 after agent fees and self-employment tax which is $11,472 spread over 4 years
If the publisher believes enough in the series to do hardcovers they probably expect that the first year hard cover sales would be 4,000 for the first book, 3,000 for the second and 2,000 for the third. Then they might expect the mass market paperback to sell at about the same level as a trade paperback only release. So that would mean 7,200 hardcovers, 30,000 mass market paperbacks and 9,300 ebooks (sold at different price points when published as a hardcover and reduced with the paperback comes out.
- Hardcover: 7,200 X 10% (royalty) x $24.95 list price = $17,964
- Paperback: 30,000 x 8% (royalty) x $7.99 list price = $19,176
- ebook: 1,800 x 25% (royalty) x $12.99 (during hard cover term) x 70% (net) = $4,092
- ebook: 7,500 x 25% (royalty) x $7.99 (during mass market paperback term) x 70% (net) = $10,487
- Total income = $51,719 total income with $40,005 after agent fees and self-employment tax which is $10,001 spread over 4 years
A few other things to keep in mind. If you do earn out your advance you generally are paid only twice a year once by the end of March for sales that come in July through December of the previous year, and another payment at the end of September for books sold January through June. Also early on a very large percentage (sometimes as high of 60%) of your print sales will not initially be paid to you. This is what’s known as “reserves on returns” which is money the publisher holds on to because they know a number of bookstores will ship back unsold stock rather than paying for it. The publisher holds on to this money so that they don’t get themselves into a situation where the author was overpaid if a lot of returns come in. This money will eventually filter down to the author, but it does mean that the publisher is essentially “holding onto” a large portion of your income and so early on your checks will only be a fraction of what you actually earned.
As depressing as these numbers can be, a really successful author may be even more depressed when they realize the relative share they get if the book turns into an exceptional success. Let’s consider a three book series that sells 250,000 copies utilizing trade paperback and ebooks. If we assume the same numbers as shown above the breakdowns would look something like this:
- 200,000 print books grossing $2,990,000 of which the retailers will get 1/2 ($1,495,000), the publisher will receive ($1,270,750), the author $173,457 ($43,364 a year for four years), $33,638 for the agent, and $17,155 to taxes.
- 50,000 ebooks grossing $499,500 of which the retailers get 1/3 ($149,850), the publisher will receive ($262,238) the author will receive $67,614 ($16,903 a year for four years), $13,112 for the agent and $6,687 to taxes.
- Total income: $3,489,500: $1,644,850 to the distributor, $1,532,988 to the publisher, $241,071 to the author ($60,268 per year), $46,750 to the agent and $23,842 for taxes
At this level I consider the author has earned a “living wage” (of course what part of the country you live in is going to affect this) but since a “good” release generally sells 10,000 copies and in this example we are assuming something like 100,000 books for the first in the series, 85,000 for the second and 65,000 for the third we are anticipating the an “earning author’ has to do 6.5 to 10 times better than a “good’ release.
As you can see earning a living wage on your first contract is very hard. Possible outcomes include:
- Under $4,400 a year for those that don’t earn out their modest advances.
- $9,000 – $12,000 a year for those selling more than 37,500 – 75,000 books across three titles
- $60,000 a year for those that sell 250,000 copies across three titles (6.5 – 10 times a successful release)
This is why it can take many authors a decade or more to graduate to becoming full-time writer. One contract is usually not enough and a combination of new contracts and royalties is generally needed to produce a steady income year after year. In a future post, I’ll do a similar analysis for self-published authors.