How to speak publisher: E is for Earning out

'Earning out' is what you hope your book will do. Remember the advance? It's what the publisher paid you a very long time ago when you started/sold your book. We talked about the advance at the start of How to speak publisher.

Your book earns out if/when it has earned enough in royalties to cover the advance the publisher paid you. Here's a bit of simple maths. Simple, I said. Don't hide behind the sofa, there. Maths is your friend - don't leave it to the publisher or your agent.

Stroppy Author gets an advance of £5,000 - hurray!

This means that to earn out the advance, the book needs to earn £5,000 in royalties

Stroppy Author's book sells for £10 a copy.

Stroppy Author gets a royalty of 10% - hurray!

This means that the royalty on each copy is 10% of £10 = £1

So to earn £5,000, the book would need to sell 5,000 copies at its cover price.

These are not real figures; this never happens - but that's the principle.

While we're on maths, let's do a spot of counting.
The press likes to shout about six-figure advances. This is to confuse people, who usually assume that a six-figure advance is a million pounds/dollars/euros. It isn't - a six-figure advance is one represented by a number that has six digits, so it is £100,000 (or $100,000) or more. Count the figures: a 1 and five 0s, that's six. Don't count the comma. So if you hear that an author has a five-figure advance, that means they have £/$10,000 or more, which is not necessarily very much. Obviously £99,000 is quite a lot; but $10,000 is not.

Some books never earn out their advance and are not even really expected to. If a publisher pays an advance of £300,000, this is largely to grab a lot of publicity. The book might earn out, but no one will be hugely surprised if it doesn't because a lot of these gambles don't pay off. To the author, the big advance seems to be a sign that the publisher is certain their book will be a bestseller. In fact, it's a sign that the publisher hopes their book will be a bestseller and thinks there's a pretty good chance it will be. But it's cheaper to pay an advance of £300,000 and get lots of free press coverage than to invest in posters all over the underground and buses. The publisher can still make a huge profit even if this book doesn't earn out.

How quickly your book earns out depends on the following factors:

• how large the advance was in the first place
• the royalty rate
• the price the books sell for.

There is a lot of room for wild variation here. Advances range from zero to £/$1,000,000. Royalty rates range from less than 1% to 10% (sometimes even higher after some massive number of sales - but very rarely). Books sell for anything from cover price to 90% discount. At some levels of discount, the royalty might disappear completely. This is generally to cover the publisher shifting the remaining copies for next-to-nothing when they've decided to give up on it.

I have books that will never earn out the advance. This is not because the advance was large, but because the royalty is pitifully small and it's a royalty on nett receipts (what the publisher actually gets, rather than the cover price) from books sold at massive discounts. I can think of a book that will have to sell 100,000 copies before I receive any royalties, and it's only sold about 40,000 so far in four years or so. It doesn't much matter, as I knew this was what would happen and was happy with the advance. In this case, you have to think of the advance as being a fixed fee and then if the book does earn out, the extra money is a bonus. Hooray!

On the other hand, I have a book that earned £1,000 royalties in the first two weeks - because it sold at cover price, had back orders and had a very small advance. Again, I knew this would happen - but it's more of a gamble because if the projections were wrong, or the publisher went bust or decided to discount the books, I'd earn very little from the book.

Understanding what you are getting is crucial. You might feel it's OK to accept a small advance if (a) you can live without the money for now and (b) you are confident you will get enough in royalties to make the deal worthwhile in the long run. Do the maths, though - how much will you really get?

Let's look at that hypothetical book at the start, the one with the £5,000 advance. Assume there is no advance. How many copies have to sell before you earn £5,000? Five thousand? No.

Cover price = £10; copies sold at (say) 40% discount, so nett receipts = £6 per copy
10% royalty = 60p per copy.
On that, your agent takes 15% + 20% VAT (in the UK) = 9p + 1.8p per copy = 10.8p per copy.
So for each copy sold, you get 60p - 10.8p = 49.2p.
That means it takes 10,163 copies for you to get £5,000.
(Of course, your agent would also take 15% + VAT of your advance, so your £5,000 advance comes to £4,100 in your bank. You need the book to sell 8,333 copies to make that.)

(You can use these sums in other territories. Swap £ for $ or Euros and p for cents.)

All this means that you need information in order to make a sensible decision about the contract you're offered.

In particular, you need to know the print run (how many copies the publisher will print), when they expect to reprint and how much they expect to sell the books for. Ask how long you expect it to take for the book to earn out the advance. A good publisher will be willing to tell you the print run and should be able to give you an estimate of the last two.

It's sensible to base your decision on the first print run - after all, if the publisher was certain the book would sell more copies, they would probably order a larger print run (but not necessarily - warehousing printed copies costs a lot, and there is cashflow to consider).

That book that earned £1,000 in the first for fortnight: I know that if the first print run sells out, and the average discount is 30%, the royalty will be nearly £9,000. The book will almost certainly reprint. I've written books that won't earn out, and have taken as long to write, for an advance of less than £9,000.

The lesson is, as always, ensure you have all the information you can get and make a decision based on it (and maths, if necessary).

• The advantages of a large advance are: you have money in the bank; you feel valued; the publisher is likely to work hard to sell the book because they have invested in it; the money you get (initially) is unaffected by the cover price/discounting.
• The disadvantages of a large advance are: it takes a long time to earn out; if the book doesn't earn out, the publisher will be less likely to commission your next book; people will be bitchy about you and assume your book is bad.
• The advantages of a small advance are: the book is likely to earn out, so you get some royalties, which always feels good when the book was written long ago; the publisher is more likely to commission your next book, especially if it sells better than expected
• The disadvantages of a small advance are: you don't have much money while you are writing the book; you feel undervalued (but that's subjective - work on your attitude!); people will be bitchy about you and assume your book is bad - but this time only if you tell them how large (small) your advance is, because the publisher isn't going to be shouting about it in The Bookseller.

What is not acceptable is for publishers to offer a very low advance AND a very low royalty rate, which is becoming increasingly common. An advance of £400 and a royalty of 2%? (This is a real offer, not from 2012, but recent.) That's ridiculous. Of course, the book might earn out. But you won't have very much money either way.

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R is for Ridiculous

I have just discovered (you can say I'm slow) that a film needs to have only two swear-words in it in the USA to be R-rated, meaning a person under 17 can't go to the film unless accompanied by an adult. This is astonishing to people who don't live in the USA. Here, my 16-year-old can legally have sex, get married (with my permission), sign up to serve and die in the army, smoke cigarettes... but in the USA she couldn't see a movie with two swear-words in it!? WTF?

If the USA was full of lovely, demure young people who never swore or put a foot wrong, I'd have more sympathy with this restriction. But: American teenagers swear on average 90 times a day; American teenagers are *far* more likely than British teenagers to carry a gun (and turn it on their classmates); on average, American teenagers lose their virginity at 17; there are three quarters of a million teenage pregnancies each year in the USA. And they grow up and make/watch the grossest, most violent movies made anywhere except Japan.

Perhaps a swear-word in a book or film is not really corrupting them very much at all? Perhaps, it is reflecting a little life as they live it?

On the other hand... in 2002 I took my daughter to see a movie that had a rating of only PG (PG-13 in the USA). It had sex slaves, murder and cannibalism in it. No swear-words, though, so that's OK for tender young minds. Is the power of language really so great that a swear word is worse than a caged woman surrounded by the bones of previously cannibalised people? What IS it with American movie people?

By gosh, I'd better go and make some jam before I come over all naughty in this book and say something worse than 'Goodness - my leg seems to have been cut off by a teen psycho who's been watching Saw movies. That's jolly rotten luck.'

Stats on American teenage sexual activity.
Swearing in movies.

The vampires get out and about

I let the publication of the seven Vampire Dawn books slip by unmarked here, as self-promotion is not what this blog is for. Still, the vamps put in an appearance at the London Book Fair, and have inveigled their way into Book Maven's place where she has given them a lovely review. I hope she kept a stake handy, just in case.

But don't let them get ideas above their station. They are still bloodsucking parasites and a blight on society.

A view from the bridge (2): Rejections

Two Maggots logo by House of Sharps

The maggots have been reading submissions to their new e-publishing list. If you need to catch up with this look at the first View from the bridge post.

The maggots still have a few things to read, and all current rejections have been sent, so if you have sent something and not had a rejection, don't worry - none of this is about you!

As writers, we're always unhappy when a publisher rejects a book. This is understandable - we write the books in the hope of earning enough to keep the wolf from the door, and it's a right pain if you spend ages on a book and can't sell it. But that's all it should be: a right pain, disappointing. It shouldn't feel like a personal rejection. That's what everyone says, but it still does feel like a personal rejection. Now I'm going to be really boring and say, in my maggoty publishing hat, that they were right all along: it's not personal.

In the last couple of weeks the maggots have rejected books for various reasons. Some of them of have been fine stories, but they are just not what the maggots are looking for. Reasons for rejection have been:

• wrong age range
• wrong genre
• wrong length
• anticipated legal problems
• just doesn't feel right for the list.

None of these is something to despair about. The stories just need to go to a publisher targeting a different age range, or looking for a different length or genre or just a different kind of story.

Another thing authors often gripe about is that publishers reject something without saying what's wrong with it or how it could be improved. It's not meanness; it's economics, pressure of time and the feeling that any feedback might not actually help.

The little maggot reads a story and it's not right for the list; so the bigger maggot emails the author, thanking them for their submission and saying they won't be taking it. The bigger maggot will often give an idea of why, as this is only polite - it's too long, it's suitable for children younger than our target market, etc. There is nothing to be gained by also saying (for instance) 'the dialogue is not convincing' or 'the plot is too weak'. For one thing, why would the author want to change a story in line with the opinion of a publisher who isn't going to take it? For another, such a tiny scrap of feedback, with no help on how to fix it, is probably not very valuable. And the maggots don't have the time to give free professional development advice to everyone. To each writer, it's one story they have spent ages on, but to the publisher it's one of many stories to deal with. Even fifteen minutes on feedback for each story soon gobbles up the working day.

As an author, think of sending out your stories as being like going to a shoe shop. You look at all the shoes. You try on those you like the look of. Some don't fit; some don't look right; some you decide you don't like after all; some don't go with your outfit; some are lovely, but not what you need right now - super winter boots, but no use for a flashy party. The rejected shoes are not rubbish, they're just not what you need. It's the same with editors and stories. You might have written some totally brilliant high heels, but the maggots wanted new Converses.

Writing like nicotine (or sex)

This sounds like one of those adverts in the back of a newspaper: 'Do you want to know how to write a bestseller?' I did, so I read The Hunger Games with an eye to how it works.

Of course, if I were really dedicated, I'd have read lots of commercial novels and collected the things they all did. But a lot of commercial novels are not very good, and I don't want to spend ages finding out how to write something not very good. They probably use the same tricks, though, as these will keep someone reading even if they recognise the book is not good. The aim is to make the writing like nicotine - even if people know it's really bad for them, they can't stop. I'm not suggesting you write a book that's bad for people, of course. Perhaps that should be, 'make your writing like sex' - once started, hard to stop before the end.

Some of what I found from dissecting The Hunger Games is incredibly obvious, some much less so. You don't need to have read The Hunger Games to understand this.

1. You need a stunning, original premise ('high concept', in publisher speak).

2. You need one or two characters we really care about, but they must not be perfect - we can't identify with perfect people.

3. If you have two central characters and they are not protagonist and antagonist, there must still be points of conflict between them. The conflict can be based on a misunderstanding - it doesn't have to be sustained antipathy - but it must be convincing when it happens and we must not know, as readers, that it's misplaced.

4. Whether or not it's a first person narrative, the point of view must be closely aligned with a character we care about.

5. The protagonist must face an overwhelming challenge that they can't avoid.

6. The protagonist must show a high level of autonomy - they must exert power in the story.

7. The last two look as if they contradict each other - they don't. The best 'can't avoid' is if the protagonist's character compels them to undertake the challenge. In The Hunger Games, Katniss is incapable of letting Primrose be the tribute, so she has to volunteer. Internal compulsion strengthens the character, whereas external compulsion weakens the character.

8. Very important point here: you don't need internal conflict if a strong aspect of the protagonist's character works in the antagonist's favour. So Katniss doesn't need to struggle internally with her decision to volunteer as tribute. Katniss has very little internal conflict - all her hostility is directed at the authorities and (to a lesser degree) the other tributes.

9. Doing away with major internal conflict means your story can move more quickly and simply and doesn't get mired in indecision or non-narrative turmoil.

10. Narrative speed is essential.

11. The structure of the story should be like a Mandelbrot pattern - a fractal pattern that reproduces itself in smaller and smaller versions of itself. So there is a large challenge, which is then broken down into smaller and smaller challenges which are tackled in order and resolved in reverse order - a small challenge is resolved, then there may be another small one set and resolved, before the next largest is resolved. This means that there are narrative challenges on every page - the reader wants to know what will happen and keeps reading, even though the larger challenges take a long time to work through. The largest challenge faced and resolved in The Hunger Games is for Katniss to survive the games.

12. If you want series potential, the overarching challenge must not be resolved. Although Katniss has challenged the authorities, she has not won outright at the end of the book. She has scored a small victory which has antagonised them and alerted them to her as a threat.

13. You need a twist. We can guess Katniss will survive - but there is an aspect to it that we can't guess (and I won't say because it's a spoiler).

14. The style must be lucid and evocative, but not hold up the action. So imagery is concise and striking but relatively simple.

15. You need to draw the scene clearly but have no lingering descriptions that slow the narrative. Description must have a sense of urgency. Most of the description in The Hunger Games is presented as Katniss evaluates the landscape looking for threats or clues - so description IS action. Even in the city, the description serves the survival imperative as she is calculating how to work the system.

16. The Hunger Games uses a lot of very short sentences. But this leads to a jerky, paratactic style that is hard to concentrate on, so add some longer sentences. The longer sentences must not be convoluted, as that takes effort to decode. Don't use lots of subordinate clauses, and certainly don't nest subordinate clauses.

Here's a bit of The Hunger Games (picked at random):

'And that's when I get my first clue to his whereabouts. He couldn't have survived without water. I know that from my first few days here. He must be hidden somewhere near a source. There's the lake, but I find that an unlikely option, since it's so close to the Careers' base camp. A few spring-fed pools. But you'd really be a sitting duck at one of those.'

Chapter 19

See? Lots of very short sentences, but a a longer one - 'There's the lake...' - to break up the staccato rhythm. The longer one is still sequential and follows the train of thought.

This paragraph explains how Katniss chooses which way to go, but it does so by presenting her reasoning as a narrative, showing how one thought leads to another. It's causal, not contemplative, so doesn't feel static. 

Everything in this style is geared towards forwards movement, keeping the reader going. Starting the paragraph with 'And' draws the reader in and makes a firm link with the preceding paragraph. There is no pause between paragraphs. The opening sentence sets up the expectation for the rest of the paragraph - we know we're going to find out where Katniss will look for Peeta and want to read the paragraph to have that question answered. We're back with the Mandelbrot pattern: the larger challenge for the paragraph is find out where to look for Peeta; the smaller challenges are What will he need? Where will there be water? What's wrong with this source of water? What's the next source? What's wrong with that? Answering those leads to an area to start searching, and moves the story on. It's never static, even when Katniss is hiding and waiting or standing and thinking.

17. Using the present tense makes it easy to make the action immediate and compelling. A first-person narrator using the past tense has obviously survived the traumas of the narrative, so that reduces the tension slightly. Some readers hate the present tense, though, so be aware that it's rather a high-risk choice.

18. You need strong supporting characters drawn with a broad brush - don't waste time on developing their subtleties, but it must be easy to distinguish between them and they must each serve a clear purpose.

19. If you move from one major setting to another (from the district to the arena, in The Hunger Games), have enough reference back to the first setting and its characters to keep it relevant. Katniss thinks of Primrose, which reinforces why she is in the arena. The compulsion to volunteer is given validity and is made convincing because Katniss thinks about her later. The initial compulsion is carried on - she has to survive for Primrose's sake, so there is continuity to her motivation.

20. Tie up loose ends, but if you want a sequel leave more than one tantalising possibility hanging. There are major issues that are not resolved at the end of The Hunger Games, and those will make people buy book 2. The issues specific to the book must be completed, though, so that readers are not frustrated. So make your book like sex with someone you want to have sex with again - hold back some of your tricks, but make it clear you have some tricks.

OK, this blog is not about how to write, so that was a bit of a digression. You need to go to Nicola Morgan if you want to know how to write. I didn't apply for a visa before straying into her territory, so I hope I'm not going to be extraordinarily extradited now.... Back to the usual stuff next time!