(This photo is by Philip Taylor. No real money is represented in it.)
One of the questions we’ve gotten recently is, ‘why would anyone want a million dollar advance? Isn’t that a lot of pressure?’
Here’s a quick refresher on how advances work, from the last time we discussed them.
When a publisher decides to acquire a book from an author, they will negotiate a deal where the author is paid on a royalty basis — for each book that’s sold, the author is paid some percentage of the sale price. So say that the book sells for $10.00 and the author has a 10% royalty. That means that each book that sells, the author gets $1.00.
As well as the royalty, there’s an additional sum of money the author gets — the advance. Why is it called an advance? That’s because it’s an advance payment of royalty money. By paying an author an advance, the publisher is saying, ‘You’re getting $1 for each book that we sell, and we think that you will sell at least 10,000 copies, so please have this $10,000.00 advance on your royalty before your book is published.’
So if a publisher is paying an author a million dollars and the book is $10.00 and the royalty is 10%, what the publish is probably saying here is, ‘author, we think your book will sell a million copies.’ (And you can adjust here for different prices of books and different royalty rates.)
The problem here is, if an author gets a million dollar advance, it’s not free money. It’s not someone say, ‘here’s a million dollars; go crazy.’ Instead, it’s basically a loan against future profits. So if an author’s book does not sell a million copies . . . they may be in trouble. (Thus, the pressure.)
So why would an author make a deal for a million dollars?
Not all book deals are for one book. In fact, a lot of non-celebrity million dollar book deals are for trilogies or quartets or other multiples. If an author has a regular track record of selling 250,000 copies of their books and they do a million dollar five-book deal, well — they could probably be asking for even more money than they just accepted.
A high financial commitment is evidence of investment on behalf of the publisher. This is the ‘yes, but — it’s a lot of pressure on the publisher, too’ answer. If a publisher spends a million dollars on a book, they’re under more pressure to make that money back than they would be if they spent $7,500.00 on a book. Raising the stakes this high forces publishers to bring their A-game to all the steps in the publishing process on a book.
A publisher could be actively not looking for a financial return on their investment, but another type of return. Instead of being interested in an author because they will sell a million copies of their book, maybe they’re interested in them because they need high quality teen issues fiction on their list and they’re willing to pay whatever it takes to be able to publish some books in that category.
The author’s last book sold a million copies. That is an excellent reason to make a million dollar book deal.
So there are reasons — good reasons, even — to take a million dollars from a publisher.