Alive & Knitting

Nope, no building going on here – this would be Today’s Analogy. I came up with this on the boards a few days ago and like it so well that those of you who saw it there get to endure it again.

Here it is: the difference between a book manuscript and its synopsis is like the difference between a house and its blueprint.

Let’s say you had a chunk of land out in the country and you decided to build a house on it. For the purposes of this analogy, you would have absolutely no experience of building houses, but having been in a lot of them (and knowing which is the business end of a hammer) you decide that you can do it. Time is no object, although finishing sooner would be better than finishing later. Besides, you have some nifty ideas of how houses could work better than a lot of the ones you’ve been in so far. You have a firm idea in your head, a couple of reference books, and you go to it.

At some later point in time, you end up with a house. Along the way, you’ve learned a lot of stuff — maybe that gravity always wins, or that water will find the path of least resistance to run down, or a bunch of other sayings that you wish had been more familiar in the first place. You’ve built stuff and torn it out to do it again to make it look right, you’ve worked really hard and you have a finished house. TA DA! And for some reason, you decide to sell it. Eventually you find a buyer, who is all ready to write a cheque BUT asks to have a look at the blueprints first.

BLUEPRINTS?!

You, of course, never let on that you didn’t do any blueprints. You promise them to him/her the following week because they’re in Tahiti (or something equally plausible) and spend the weekend measuring the house. You back-engineer a set of blueprints, which are more or less accurate, the buyer is happy, you get the money and all is good.

Phew.

With the money, you buy a bunch more land to make more houses. How much fun is this? A lot less fun once you realize that your new land is within the boundaries of some municipality and that you will have to submit blueprints before beginning construction to get a building permit. Oh. You realize very quickly that envisioning a house on paper in advance of building it requires a whole different skill set than actually building one. You have to be able to envision the space to figure out where the light switches should be, where the plumbing should be, how high the ceilings should be, how the rooms flow into each other etc etc. This is a big change from standing in the framed house and saying “hey, let’s put the bathroom over there.”

During this painful learning process, though, you learn that there are people who can think in blueprint-mode, and even better, that these people might buy the house from you based on the blueprints and the lot i.e. before you even start building. There’s an incentive to get better at blueprints. The vast majority of people, however, are not interested in blueprints. They like houses. They like standing in houses and seeing their shape and detail and design, instead of trying to envision all of that from a line drawing.

And so it is that synopses are similar to blueprints and books are similar to houses. You probably wrote or are writing your first book without a synopsis, albeit with a pretty good idea of how stories should be told. You have some reference books; you’ve gone to some seminars; you know which is the business end of a pen (or a computer keyboard). And when you submit that book manuscript to a publisher, you’ll need to include a synopsis. Most of you will reverse-engineer the synopsis, which doesn’t really make a difference. The twist will come when you need to write a synopsis BEFORE you write the book.

Synopses are not like books in that they aren’t intended to entertain. They’re information documents. They show the building inspector where the plumbing and the wiring will be, how deep the foundations will be poured and what exactly is the structural support that will keep the house from falling down. A synopsis tells the editor what kind of book you’re going to write, it shows that you have characters and a sustainable conflict and a plausible resolution. It shows that you know how to construct a story so that it will hold up. If the synopsis shows that, you might sell the book on the power of the synopsis. Readers, of course, don’t care about your synopses. They want to read the book. But the synopsis can help an editor determine whether or not the book is one that people will want to read. Although it seems like a pain when you’re learning how to write synopses, they really do save time in the end. Once you wrap your mind around the way they’re done, you’ll be writing an 8 – 10 page synopsis on spec instead of a 400 page book. No matter how painful those pages are to come by, it’ll be quicker.

Picture the scene:

It’s Tuesday morning in NYC and the editors are gathering in the editor-in-chief’s corner office at Good Books Inc. No one is checking out the view, even though it’s a glorious sunny June day. All eyes are on the massive wheel in the middle of the office. It’s marked off in colourful wedges with dollar amounts written around the perimeter, one amount in each wedge. Tina always touches the red ‘$1 million’ wedge for luck when she comes into this office. Marianne is all a-jitter – today the advance for the book she wants to buy will be decided. Will it be high? Will it be low? You never know until the wheel stops spinning.

The editor-in-chief clears his/her throat. “Today, Marianne would like to offer for Zelda Longstauffer’s LOVE’S WILD REVENGE as well as the sequel. Everybody ready?” There’s a flurry of assent and compliments regarding the manuscript in question. Marianne is wished good luck, then the editor-in-chief grabs the wheel and sets it spinning.

Marianne can’t bear to watch, but she can’t look away. She stares at the wheel, willing it to land on that red wedge. “More Money” chant the editors, clapping as the wheel spins around and around. “More money! More money!” The wheel slows, the colours become more clear, Marianne holds her breath and the wheel stops at $5000 each, two for $10,000.

But no, this isn’t how books are bought or even how advances are determined.

In reality, Marianne would be sitting at her desk with her calculator – or have a spreadsheet up on her computer. When Marianne read LWR and loved it and decided that she wanted to buy it, she had to do her research. She had to decide what books already in print were closest in style and subject to LWR. She would look at how they sold in raw quantities – if those books weren’t published by her own house, Marianne would ask the sales team for estimates about selling a similar book. If Zelda Longstauffer already had titles in print herself, Marianne would also consider Zelda’s own previous sales numbers. Marianne would also factor in the marketing and promotion costs anticipated to be required to sell the book at a given sales level, as well as the cost of the packaging to give the book the right look in the marketplace. From all of this, she would derive an anticipated level of sales for LWR’s release and a suite of projected expenses, and from this spreadsheet, the advance to be offered to the author would be derived.

I kind of like the idea of the spinning wheel myself and would bet that Marianne might prefer it too.

Phew. Let’s take this apart a bit. The most important thing for us to remember as writers is that publishing is a business. This is easy for us to forget, particularly early in our careers, because writers are often following a dream in writing a book. Publishers, however, are for-profit companies, no matter what media they chooose for publication. Books for publishers are commodities, not dreams. Publishers acquire the rights to books so that they can print those books and make money doing so. You hear stories about editors acquiring books that they love, but the reality is that if Zelda’s book was a Viking romance set in the upper Volga River in the 9th century with a Muslim slavegirl heroine and a homoerotic subplot, it would not be possible for Marianne to love it enough as a romance to buy it for a $5000 advance. A huge factor in any decision to buy a book is the potential reveneue that that book can bring to the house.

Every publishing house has not only a number of authors in their list (or their “stable”) but has those authors’ books arranged in a hierarchy. The positions in the list are called “slots” and each slot is assigned a place in the hierarachy. We’re going to make up a fictional publishing company with a very simple list, just to make this more clear. Our publishing house, Good Books Inc., publishes romances, mysteries and thrillers. It’s where Marianne works.

At the top of the hierarchy at GBI are the biggest names with the house. You could think of these authors as the house’s bestselling brands. They are determined to be the biggest by the dollar volume of their sales per title, typically by the sales volume realized in the domestic US market. These authors and titles are often called “superleaders”. Many – if not all – of them will be NYT bestselling. There are typically one or two superleads published each month by each big publishing house, though in some houses the hard cover list and the paperback list may be counted separately (as will be the non-fiction list, if there is one).

Because the superleaders are the bestselling authors from each niche in which the house publishes, the kind of book in that slot will usually change every month. In our example, GBI has three programs (romance, mystery and thriller) so the house will try to have superlead authors in each of those areas of focus. The idea is that a superleader “breaks trail” in the market for the authors lower in the hierarchy. So, the GBI superlead title might be a thriller in January, a mystery in February, a romance in March, another romance in April.

At GBI – which is a comparatively tiny house – the next slot in the hierarchy is lead slot. Lead slot is the highest position within any given program – this is the position for the highest level in each genre, within the genre program. For example, in any given month at GBI, there will be a romance lead, a mystery lead and a thriller lead. The house would be trying to build each lead author into a superlead author.

At GBI, the next tier down in the hierarcy is what is commonly called the midlist. At GBI, there are two slots in each of its programs for authors in the midlist program. These can be considered to be entry slots, or positions where a new author would be most likely to be published. Ideally, each of these midlist authors would prove themselves in the market and move up to lead slot. (Some won’t.)

One of the things that has happened in the last decade is that there are fewer midlist slots: once upon a time, another hierarchy existed within the midlist itself and a genre author could spend an entire career being a reliable source of books to fill those many slots. Fewer slots, and a stronger focus on profits, means that there’s no dallying around in the midlist any more. A new author will have a limited amount of time to distinguish his or her work from the pack in the midlist before being either moved up to lead slot or not selling to the house any longer. How much time that is, or how may midlist chances any given author will have, depends upon a confluence of factors including the house itself, the market at large, the author’s early numbers and the inhouse perception of how the author’s work fits into the marketplace.

In summary, every month at GBI, there are three romances published – two in the midlist and one in lead – and possibly a fourth, if the superleader is a romance. The same scenario works for GBI’s other programs. GBI publishes ten titles a month: three romances, three mysteries, three thrillers and one superleader.

Now, a lot of things fall out of the hierarchical system. One of the things any sensible person will realize is that GBI cannot possibly give all ten of those monthly titles their fullest support. The house will choose which book deserves the most emphasis. The hierarchy is one big factor in this, as is enthusiasm (which we’ll talk about later). So, because the sales volume is different (or expected to be different) for each tier of the hierarchy, you might imagine that the promotion done by the house will change at each level to reflect that. The house would reasonably show the most support for the superleader every month.

You’d be right to expect as much. In essence, superlead authors are proven commodities – they are in that slot because their past sales justify the push from the house. And they’re more expensive. There’s more to be lost if the books aren’t promoted properly. The house will take care of the superleaders first.

You can see this in catalogues, if you ever have the chance to see one. Catalogues – sent to wholesale customers, bookstore buyers and distributors – are arranged hierarchically. The superlead titles will always be at the front, often with double page spreads, followed by the lead titles, followed by the midlist titles (which might share pages). The catalogue also includes a punchlist of what promotion the house is planning for each title. For superleaders, these can include book tours, booked television appearances, advertisements in national magazines. There’s also something called “online promotion”, which is what all titles invariably get. (That means, at a minimum, that the house will list the book on their corporate website.) The catalogue will also list whether ARC’s will be available (ARC = Advance Reading Copy) or book club guides, as well as what reviews are known to be pending. Obviously, the superlead titles get more because the house investment in the title is higher. At GBI, only superlead authors go on book tour, for example, plus GBI doesn’t buy national advertising for lead titles. Similarly, GBI doesn’t do ARC’s for midlist books.

The hierarchy is also echoed in the packaging. (The package is everything that wraps around the book – the cover art, the cover copy, the quotes etc.) You can often tell the position of a book in the house’s list by the way it is packaged, or by how expensive the package is. At GBI, only a romance in the lead position will have a foil-stamped (that’s shiny metal, usually in the type) and embossed (that’s 3-D) cover or will be printed on matte paper which is more expensive than the glossy stuff. The midlist romance titles are glossy and in full colour: at GBI a midlist title is more likely to have a clinch cover or a cartoon cover while a lead title is more likely to have a candybox cover (that’s when there’s a cluster of flowers or ribbons). Only a superlead romance is likely to have a stepback, as these are expensive to produce. Also, the quality of the illustration on the artwork will improve as you move up the hierarchy: GBI pays more money for the art and thus hires better and more expensive artists for packages at the higher levels.

So, the packaging and the promotion both are derived from the book’s assigned position in the list. There are more things that fall out of this which are mostly invisible to Zelda – like how much time proportionately the sales rep might spend talking about Zelda’s book on a sales call, or which terms are negotiable in Zelda’s contract – but the single most important thing to Zelda that results from this publishing structure is the the position assigned to her book will determine the amount of the author advance that the house is prepared to pay for her book.

Oooo, that got your attention, didn’t it?

This post is huge. But it’s the weekend, so you have time to read, right? The problem is that once you start talking about the whole royalty mechanism, there are lots of other bits you have to explain as well. It’s like herding cats, so bear with me. Eventually, it will either make sense to you or you’ll just accept it as a great mystery of our time.

So, back to our example. A mass market book sold for a $5000 advance with a 6% royalty on mass market editions has to sell 10,417 copies for the author to earn out. Only after that has happened with the author receive more money from the house.

But, assuming that there is any, how will that money come to the author? In small unmarked bills, in discreetly addressed envelopes, appearing at random intervals in her mailbox? “Here: we sold another two copies today” enclosed with a cheque for $.96?

No. (Big surprise, right?) Additional monies (beyond the advance) are paid to authors in semi-annual royalty statements. Huh? It will specify in the contract what the semi-annual royalty periods are – they are usually 1. January to June; and 2. July to December but you never know, someone might get creative – and after the first contracted book is printed, the author will begin to get these statements from the house. (Or they will come to the author via the agent of record.) These semi-annual statements are generally issued 90 -120 days after the end of the royalty period. If there is money owing to the author, the statement will show where it’s coming from and will include a cheque.

Let’s have an example to clarify. Zelda sells her book LOVE’S WILD REVENGE for the aforesaid $5000 deal. (We’ll focus on just the first book for the moment, so Lisa will have to wait for her entertainment.) Zelda gets the advance money as we discussed yesterday. Let’s say she sells the book today, June 9, 2006, even though very little new business gets done on Fridays in NYC and this is wildly improbable. (I’m making stuff up here, so let’s go with it.) So, she will see the contract for the first time (optimistically, because summer vacations slow things down) on September 15. She will sign it and send it back and get the executed contract and the signing cheque, let’s say, on October 23. Meanwhile, she’s been doing the revisions, and sent them back before she went to National on July 20. Her editor signs off on the ms in October, and Zelda receives her D&A cheque by the end of November. So far, so good.

Meanwhile, LWR has been scheduled for an October 2007 release. This means that the book is being published in the second royalty accounting period for 2007 (July to December, remember?). This means that the earliest that Zelda can receive a royalty statement from the house is in April or May 2008. This statement will cover activity in the period July to December of 2007 and will be rendered in 90 or 120 days after the end of the period i.e. Dec 31.

It may be, however, that the contract has a bit of wiggle room with regards to the first royalty statement – this is pretty common – and Zelda will thus not receive her first statement until October or November of 2008. Her first statement would be a bit odd because it would include all activity to date – i.e. the second accounting period of 2007 would be rolled into the data for the first accounting period of 2008 – subsequent statements will report only on the specified period.

Let’s add another wrinkle, just to keep you and Zelda on your toes. The sales numbers of books are derived. Because publishers don’t sell directly to consumers, they don’t know precisely how many copies have been bought in stores. Ever. They know how many copies they shipped and they know how many copies were returned to them. Sales numbers are calculated from these two known numbers. Sales = the shipped quantity minus the returned quantity. Given that distributors and bookstores can return books for a long time after the initial release, you’ll see that sales numbers are a bit squishy. It takes a while for them to approach anything like finality.

Naturally, publishers aren’t in a hurry to pay out money to authors for books that might ultimately be returned. In the example of LWR, the house might have shipped 20,000 copies of the book. On the actual ship date, there are zero returns but that doesn’t mean that 20,000 copies have sold! Publishers allow for this fluctuation by posting “reserves held against returns”. This means that if we printed out a royalty statement for Zelda on the ship date it might look like this:

Quantity Shipped (or Gross Sales): 20,000
Returns to Date: 0
Net Sales: 20,000
Reserves Held In Anticipation of Returns: 10.000
Acknowledged Sales (or just plain Sales): 10,000

You will notice immediately that this reserve results in no money being owed to Zelda. Generally speaking – acknowledging that the only generalization that is generally true is that generalizations are generally inaccurate – the house will hope for a “sell through” of 50% of the print run. This means that 50% of the books shipped will be sold. This is a manufactured number: in truth, the sales could go either way. It’s just a rule of thumb. If your sell through is higher than 50%, people will be excited. If it’s lower, they’ll be bummed out. As you can see, though, it’s a moving target and it will change every time that a box of books crosses the shipping dock of the publisher’s distribution center. I’ll bet there are people in accounting departments of publishers who are very very happy to have computers to keep track of this!

Most contracts stipulate how long reserves can be held. It’s pretty common for a contract to state that reserves must be zeroed out within three royalty statements after the release of any given edition (and yes, they can hold reserves on any edition, not just the initial one).

Back to LWR for our illuminating example: the book’s publication date is October 2007. Let’s assume that the first royalty statement is delayed (because this is more typical) and Zelda gets her first statement in October 2008, for the period Jan to Jun 2008 (with Jul to Dec 2007 rolled in.) Her second statement will arrive in spring 2009; her third statement with the reserves zeroed out will come in fall 2009.

Two years after publication.

More than three years after she initially sold the book.

These are comparatively final numbers, but by this point in time, they’re not particularly relevant to Zelda’s career. Decisions will have been made about buying more books from her (or not) and how to market those books, based upon interim data. People in publishing recognize that interim data is still changing, but they can’t wait three years to decide whether or not to buy another book from Zelda. There would be no opportunity to build upon success, because in three years, readers will have forgotten about Zelda’s classic tome LWR. (Readers are fickle like that.) In truth, the house will consider the numbers that they have internally about 90 days after publication to be close enough for horseshoes and handgrenades. This is when the big chains have done the bulk of their returns, so the strategy makes a certain amount of sense.

Okay, back to our topic at hand. A couple more things fall out of the whole royalty statement mechanism. The first is that Zelda may not necessarily see a little spreadsheet as I’ve included above or anything remotely resembling it. Many MANY houses do not offer this much information to their authors, although they must have it inhouse. An author may not even know the shipping quantity of her book. Ever. (Although you can take a pretty good guess at it, by calculating backwards. Figure out how many books you need to earn out, then double it for a stab at the ship quantity.) The reserves may not be clearly stated on the author’s statement. Some houses have royalty statements that include gobs of information, others are pretty enigmatic. Statements are generally getting better as accounting and tracking software is upgraded in publishing houses, but it is how it is.

The second thing is joint accounting , a mechanism universally loathed by authors. Joint accounting means that the house tallies the sales from books together before paying out any money. Remember that second book that was part of this deal? If Zelda’s publisher practised joint accounting, then Zelda would receive no more money from the house until BOTH books had earned out their advances. It’s not enough for LWR to sell 11,000 copies for Zelda to get more money.

Let’s walk it through. If LWR sells 11,000 copies and those sales are acknowledged, there will be a balance owing to Zelda of (583 copies at $.48) roughly $280 on that title. If the house practices joint accounting, she will not get any more money until BOTH books have earned out. That means selling (10,417 x 2) or 20,834 copies cumulatively. A little summary sheet enclosed with the royalty statement will add that $280 and subtract from it $5000 advance for Book #2 (because LOVE’S SUBSEQUENT REVENGE has yet to be even printed) and show an “unearned advance” of $4720.

Back to our example. Consider that LWR is a huge success, well beyond expectations. Orders are through the roof, the ship is higher than anticipated, the sales are great. The book sells 20,000 copies on a ship of 25,000. WOW! Everyone is happy. There is drinking and giddiness and folly aplenty. Zelda is the kewlest thing since sliced bread. An 80% sell through. What a star! What a sensation! If the books are jointly accounted, she will, however, get no more money until the publication of Book #2 is acknowledged in her semi-annual royalty statement. LWR is to be published in October 2007; maybe LSR gets bumped up (capitalizing on success) to July 2008. Yup, that puts the extra $ (maybe, depending on reserves held against returns) in her spring 2009 royalty statement.

Of course, all is not lost. Zelda’s success will make her a hot commodity and the house will be hot to do another deal in late 2007, once they know those fab numbers on LWR. She will not be offered $5000 for her third book.

Not all houses practice joint accounting. It is common for a house to jointly account the books that are contracted together, but not to jointly account between contracts. Obviously, agents hate joint accounting but if it’s a policy of the house, it can be hard to change. The compensating strategy – as usual! – is to aim to get as much money up front as possible and thus minimize the impact of joint accounting.

The third thing that falls out of the royalty statement mechanism is how other monies make their way to the author. Let’s say Zelda gets a letter from her editor in December 2007 which says “Congratulations! We’ve just sold the French mass market rights for LOVE’S WILD REVENGE to Les Editions Francaise for $1000!”. Zelda may look in the envelope for her cheque, but there won’t be one there. Often foreign rights deals stipulate that the payment for the subsidiary rights is due on publication – you may never know, because you will never see the contract. It’s between the two publishing houses, after all. If you keep your foreign rights and your agent/agency sells them separately, that’s a whole ‘nuther ball of wax.

So, let’s continue fabricating our example, Les Editions Francaise buys the rights in December 2007. They have to translate the book and typeset it and package it, and maybe their edition will be released in France in February 2009. The cash will then be paid from one publisher to the other in February 2009 and the transaction will appear on the statement Zelda receives in the fall of 2009 for the accounting period of the first half of 2009. It will have been split, according to the percentage split for foreign rights specified in the contract – some for the house, some for Zelda, probably 50/50 in a new deal for a new author – and the agent will keep a piece of it as commission. It may not be a flat fee, either – there could be reserves held against returns on the foreign edition too. It just depends on how that deal is structured. Zelda will get her $300 or $400 for that French edition completely by fall 2010. Let’s hope someone remembers to send her a copy – if not, she can log on to amazon.fr and use some of that $ to buy herself one.

To sum up, all monies beyond the negotiated advance will flow to the author through the semi-annual royalty statements. If the house reprints the book in English North America, maybe changing the format to trade or to hardcover, there probably won’t be another advance – the whole transaction will appear on those statements, and there will be reserves held, and the money will be gradually released to the author in increments as specified by the contract. On the downside, money takes a long time to make its way to your chequing account; on the upside, once you “step into the royalty stream”, as long as you keep selling work, there is this constant trickle of $ showing up twice a year in your mailbox. That’s not all bad. It’ll keep you in chocolate, at least.

So, I’m managing my posse of Post-Its at this end, trying desperately to get the creature walking, talking coherently and off to NYC. In the meantime, I thought I’d post answers to questions that I get asked ALL the time. Someone somewhere must be curious about the answers.

Money is a weird topic. There is something about being a writer – or confessing to being a writer – that brings out an unseemly curiosity in most people. I have never, for example, ever met someone for the first time and said anything like this:

“A lawyer? You’re a lawyer? Wow. I hear that pays really well. I mean, REALLY well. How much money do you make anyhow? Come on, you can tell me. Do you charge by the hour? Are you on retainer? Do you get to choose what you work on or do your clients tell you what to do? And what is your hourly billing rate? Would your income be at the high end or the low end of what lawyers usually get?” etc. etc.

It can be a bit startling. (We won’t get into the subsequent confession “I’ve always wanted to write a book” or “I’m working on a book right now” or “You know, I have this lecture series that could use some major editing. Would you do that for me, for free?” I love Dorothy Parker’s retort: she met a brain surgeon who told her that he’d always thought about taking up writing when he retired. She told him that was funny, she’d always thought about taking up brain surgery when she retired.)

So, what about the money? Let’s talk first about how money gets to authors.

When you sell your book to a publisher (and again, I’m talking about print publishers, big fat publishing houses located in NYC because those are the only kind of publishers I know much about.) you will agree to accept a dollar amount for that book. The shorthand for an offer might be something like “World Rights, hard/soft, 6%, $5000.”

What that means is that the house is offering a $5000 advance against royalties that will be calculated at 6% in mass market format, for the rights to publish your book in any territory of the world in any language in hard cover or mass market format.

The most likely reality is that they will publish the book in mass market format in English, in English North America (the US plus English Canada). Depending upon how aggressive and/or well-established their subsidiary rights department is, they might sell a few or or a lot of the foreign rights to that book to other publishing houses. These foreign houses might be partners or subsidiaries or entirely separate corporate entities. (See my earlier post on Backlist for more about this mechanism.)

First of all, this is an advance against royalties. What this means is that you will get no more money from the house until you have “earned out” the $5000. (btw, these transactions are always done in US $. Houses keep their books in US$, they write cheques in US $ and when money comes in from foreign sources – for foreign rights sales, for example – it will be converted to US $ to appear on your statements and thus pass on to you.)

What’s earning out? Let’s pick that apart. The house is offering a 6% royalty. This means that they will pay the author 6% of the retail price (of the gross) for every copy of the book sold. There are other exceptions and conditions and possibilities (book club sales, discounted sales, etc etc etc) but let’s stick with the main retail transaction. Look at the program the house says they will publishing the book into and look at the cover price of the books in that program. Let’s assume that the cover price is $7.99 US. For every copy of the book that is sold, the house will pay 6% of $7.99 or $.48 to the author.

Now, remember your algebra. If they are paying a $5000 advance, then you have to sell ($5000/.48 = ) 10,417 copies of your book to earn out. They won’t pay you another dime until they sell that 10,418th copy, and then they’ll pay you forty-eight cents.

So far so good?

Okay, let’s talk about how the money gets to you. Although we might like to think that in this age of high tech stuff, we could just say “Okay” to the offer and $5000 would be transferred electronically to our bank account, it doesn’t work like that. The house will surrender that $5000 in increments.

(If you have representation, each increment will be sent to your agent, who will then deduct his/her percentage from the total and send you the difference. Some agencies are quick about this. Some aren’t. Some only write cheques on the last day of the month, for example – if you get paid on the 1st, they’ll sit on it until the 31st. Some authors request “split cheques at source” which means the house sends the agent’s share to the agent and your share to you. Some agents won’t do this as it implies a lack of trust. Some houses will send only the agent part out quickly – because the agent nags – and sit on the author chunk. There are no easy answers here. Choose and live with it.)

Okay, back to the increments. The first increment will come to you “on signing”, or with the signed and executed contract. Don’t hold your breath on this part of the process. First the contract has to be drawn up, using the house boilerplate and/or the agency boilerplate. Then it goes to the agent in triplicate, who may find mistakes and send it back to the house for correction. This process is repeated until the agent is happy with the paperwork. Then it comes to you to be signed. READ YOUR CONTRACT. Ask questions. Don’t be afraid to ask for or make corrections. You want your name to be spelled right. You want the copyright to be registered properly. You want the right number of comps etc. etc. Then you sign all three copies and back it goes, to the agent, then to the house, then to the desk of whoever has to sign it on the house side. Then it goes to accounting to have the signing cheque cut, then it goes to your agent, then ultimately, you will get an executed copy of the contract and your signing cheque. This process can easily take 4 months.

The second increment will be paid on “delivery and acceptance”. Notice that only the first half of this is what you do. After you have delivered the book and it has been revised (if necessary) the acquiring editor has to “accept” it, or “sign off”. At some houses, this requires the completion not only of the acceptance read, but of the line edit and copy edit and generation of the cover and catalogue copy. Even if your book is clean, this could take months. Publishers, btw, do not cut any incremental cheques before the contract is executed. The signing cheque must be cut first, then the D&A one.

It is likely that with a $5000 offer that these will be the only two increments. The money might be split 50/50 or not. Agents tend to prefer to get money sooner; houses tend to prefer to hold on to it longer. It’s human nature and they’ll quibble it out. When the advance is higher, however, more increments will be added. There may be a payment “upon publication”, for example – although agents tend to fight tooth and nail over this one, they often lose.

If the deal is for more than one book, the payments for the second book on the deal (which is probably not written) will be different again. There will likely be an incremental payment for delivery of the synopsis (which might include a partial, especially for a new author.)

So, let’s say our $5000 per book deal is for two books – that makes it a $10,000 deal. The payments could look like this:

On Signing – $3000 ($2500 for Book #1, $500 for Book #2)
On D&A of Book #1 – $2500
On D&A of synopsis + 3 chapters of Book #2 – $2000
On D&A of Book #2 – $2500

And yes, it will be specified how much of each payment comes out of the allotment for each book. There will also be dates for the D&A’s of Book #2. Generally, these are supplied by the author, this being considered a good way to ensure that the author is likely to “make” delivery.

Tomorrow we’ll talk about money in excess of this initial $10,000.