Publishing Contract Terms
Publishing Contract Terms
Jonny Geller (Managing Director - Curtis Brown (Books)) gives expert video advice on: How do advances and royalties work?; Should I accept an offer of a 'flat fee'? and more...
How do advances and royalties work?
The way publishing contracts work is that you're paid in advance and the advance is money that is non-refundable. Unlike the music business, there are no marketing costs attached to it. The advance is money that is in your pocket, as long as you deliver the book that you are promised to deliver, if you haven't completed the book. You are paid £10,000, for example, and then you are given some royalties. The royalties are on the books sold. If you get 10% of a £10 book, that's £1 per book and you've been paid a £10,000 advance. You have to earn out £10,000 to break even. Once those 10,000 books at £1 each have earned out, every single book you sell from that point on will go to you at 10%. That is how royalties work in publishing. An advance is just an advance against future royalties.
What are 'royalties'?
Royalties are a percentage of the sales of each book that you get returned to you once your advance has earned out. Earning out means the amount of books sold exceeds the advance level, and then you'll start seeing those royalties. The higher the advance, the longer it takes to earn out. The lower the advance, the quicker it takes to receive royalties.
Should I accept an offer of a 'flat fee'?
A flat fee doesn't happen in publishing. It happens sometimes in script writing. It sometimes happens if you're a ghost-writer where you get a flat fee, and no royalties. You just go in, you write and you leave. The principle that literary agenting works on is that writing has a long life and that, actually, books stay in copyright for 70 years after the author's death. If you were to get a flat fee, that's it! For example, if our most famous client, A. A. Milne, who wrote "Winnie the Pooh", got a flat fee for "Winnie the Pooh", we wouldn't be here today. Certainly the hundreds of millions of dollars made out of "Winnie the Pooh" merchandising would have gone just to the publishers, manufacturers and film studios, so the person who created it wouldn't have got anything.
What is an 'exclusive' deal?
All publishing deals are exclusive to the publisher you're selling to. The question is what territories do they have and do they have an exclusive right to publish your book in these territories and no one else can publish into them? That is an exclusive publishing deal.
What is an 'non exclusive' deal?
A non-exclusive publishing deal is when you publish into a territory that someone else in America can publish into, in the open market, which could be various parts of Europe or other areas where your English language book can go into. You can have two different versions of the same book at different prices in that territory.
What does 'first refusal' or 'option' mean?
First refusal is not a term for the word option. That just means that a publisher has the right to look at your next work. If they have invested X amount of money in you, they feel that, however good a job they do, they shouldn't have to compete with the market. They should compete just by offering a decent amount of money. So many authors are asked to sign an option agreement. It's not something we recommend.