Such a brilliant piece, Phoebe! Even as someone in the publishing industry I always learn something new from your posts, and it's so fascinating to see how things work at a Big 5 – I work for an indie where the decisions tend to be less driven by P&Ls and more 'vibes-based' 😅
One small (but surprisingly significant) thing it's maybe worth clarifying though is that 'earning out' the advance doesn't mean the publisher has made enough sales revenue to equal the advance, but that the author's royalties per copy sold add up to the advance. So for example an author getting a £1 royalty on a £10 book would need to sell 5000 books to earn out a £5000 advance, but the publisher could make £5000 of sales revenue much sooner as they might be making £4-£6 per copy after discounting. (Obv publishers have to cover lots of other costs out of their share, and also in reality the figures tend to be more complicated than my very simplified example – paperback royalties for authors are often 7.5% and are sometimes based on net receipts not RRP, meaning an even smaller cut for the author and even longer to earn out the advance!)
A great accessible primer to the financial side of publishing—I particularly appreciate its point about the difficulty of computing the "worth" of books whose true value is far more intangible.
Another great post, thank you. Any idea how publishers manage audiobook sales on Spotify in terms of royalties for authors? I saw my books had gone on there but I don’t know what kind of deal was struck and I’d be interested to know how that works with publishers, if it’s something you’ve come across. Plus I know joint accounting is the norm now - it wasn’t when I first started out and I had separate accounting early on in my career - oh joy! - but I do think it’s terribly unfair on authors. That plus withholding profits due to book returns from retailers makes it much harder than it should be for authors to earn regularly from their books - delaying payments by several years in some cases. I understand spreading the risk for publishers…but to such an extent that authors aren’t getting paid money they’ve rightly earnt for years…it’s not right and feels unjustified in my view. Another of my usual rants! 😬😅
Yes authors get paid via Spotify! They either get a proportion when a customer buys a whole book, or a proportion based on listening hours if the book is part of Spotify premium, I think. I believe each publisher will have its own terms with Spotify - similar to how we have terms with other retailers like Amazon and supermarkets - so it likely varies but you can ask about this as part of signing a contract with a publisher, for sure. X
Always been confused about advances. Who cares? Since an advance is just an upfront payment, and sales are gonna be what they are gonna be, why negotiate?
For someone who has zero experience in publishing a book, but one who has been writing a book now for five years, this is invaluable information about finances in the publishing industry. Thank you Phoebe! I'll need it in the future, I hope!
How does Kindle Unlimited work? Do publishers/authors make money through that? When I tried KU as a reader, I noticed the quality of books on there wasn't what I wanted (only from what I read, I'm sure there are high quality books on there!) so I wondered if finances stopped many publishers opting for that. I know it's not all self-published authors using KU.
Also, probably this is a different topic, but I'm interested in how libraries choose which/ how many books to order? I get a lot of my books from libraries. I know authors get paid through PLR for these, but publishers presumably get paid per copy libraries buy? Do libraries choose in the same way book shops do? Maybe a future post?
Thank you for all your posts, they're such a great insight into the British publishing world!
Yes KU also brings in sales and money, in a slightly different way (needs a separate post). Basically you’re paid by number of pages read, instead of “a la carte” kindle sales when the books are not in KU. Lots of big publishers use KU and personally I think it can be v effective for broadening an audience and reaching more readers - some v high quality books and brand authors are in KU! Self-published authors use it a lot as well. Everywhere I’ve worked uses KU (though I believe Penguin do not). Libraries I actually would need to do more research on! I will try to do another post in due course on this. Thank you for reading!!
Hey Phoebe, excellent read. Really interesting and insightful article.
How good are publishers at knowing whether an unpublished book will be a financial hit? Is it largely data driven? Or will there be some talented individual in-house who has an amazing gut instinct for whether a book will sell well? I like to think there is a Lovejoy figure (this reference ages me!) who can divvy a hit novel from the slush pile!
Btw - I finished The Trip and thought it was excellent. Really enjoyed the story. And the craft of the novel around suspense and twists were so well executed.
Thank you for reading my book! That’s so kind. It’s a mix - a lot of it is based on sales data of comparison titles, retailer success or otherwise, and an author’s track record (which I wrote another post about). But then there is also gut instinct from editors as well, their passion, and the passion of the team overall. All of that plays into how much we offer and our sales predictions.
It’s a weird thing - I *know* how business works, P&L and all that jazz, but when it comes to my books, my heart goes toe to toe with my head every time 😅
Such a brilliant piece, Phoebe! Even as someone in the publishing industry I always learn something new from your posts, and it's so fascinating to see how things work at a Big 5 – I work for an indie where the decisions tend to be less driven by P&Ls and more 'vibes-based' 😅
One small (but surprisingly significant) thing it's maybe worth clarifying though is that 'earning out' the advance doesn't mean the publisher has made enough sales revenue to equal the advance, but that the author's royalties per copy sold add up to the advance. So for example an author getting a £1 royalty on a £10 book would need to sell 5000 books to earn out a £5000 advance, but the publisher could make £5000 of sales revenue much sooner as they might be making £4-£6 per copy after discounting. (Obv publishers have to cover lots of other costs out of their share, and also in reality the figures tend to be more complicated than my very simplified example – paperback royalties for authors are often 7.5% and are sometimes based on net receipts not RRP, meaning an even smaller cut for the author and even longer to earn out the advance!)
Oh thank you! And yes, excellent point. Thank you!
Hey Phoebe, this was such a great piece! Any insight into how editors make offers for recontracts would be amazing to understand! xx
I did a piece on this here: https://honesteditor.substack.com/p/to-recontract-or-not-to-recontract?utm_source=%2Fbrowse%2Fliterature&utm_medium=reader2
XX
A great accessible primer to the financial side of publishing—I particularly appreciate its point about the difficulty of computing the "worth" of books whose true value is far more intangible.
Thank you!
Another great post, thank you. Any idea how publishers manage audiobook sales on Spotify in terms of royalties for authors? I saw my books had gone on there but I don’t know what kind of deal was struck and I’d be interested to know how that works with publishers, if it’s something you’ve come across. Plus I know joint accounting is the norm now - it wasn’t when I first started out and I had separate accounting early on in my career - oh joy! - but I do think it’s terribly unfair on authors. That plus withholding profits due to book returns from retailers makes it much harder than it should be for authors to earn regularly from their books - delaying payments by several years in some cases. I understand spreading the risk for publishers…but to such an extent that authors aren’t getting paid money they’ve rightly earnt for years…it’s not right and feels unjustified in my view. Another of my usual rants! 😬😅
Yes authors get paid via Spotify! They either get a proportion when a customer buys a whole book, or a proportion based on listening hours if the book is part of Spotify premium, I think. I believe each publisher will have its own terms with Spotify - similar to how we have terms with other retailers like Amazon and supermarkets - so it likely varies but you can ask about this as part of signing a contract with a publisher, for sure. X
Thanks so much for explaining that. I knew we must get something from it but wasn’t sure how it worked. Your knowledge invaluable, as ever!
Always been confused about advances. Who cares? Since an advance is just an upfront payment, and sales are gonna be what they are gonna be, why negotiate?
For someone who has zero experience in publishing a book, but one who has been writing a book now for five years, this is invaluable information about finances in the publishing industry. Thank you Phoebe! I'll need it in the future, I hope!
Thank you for reading!!
🫶🏻🙏🏻
Fascinating as usual!
How does Kindle Unlimited work? Do publishers/authors make money through that? When I tried KU as a reader, I noticed the quality of books on there wasn't what I wanted (only from what I read, I'm sure there are high quality books on there!) so I wondered if finances stopped many publishers opting for that. I know it's not all self-published authors using KU.
Also, probably this is a different topic, but I'm interested in how libraries choose which/ how many books to order? I get a lot of my books from libraries. I know authors get paid through PLR for these, but publishers presumably get paid per copy libraries buy? Do libraries choose in the same way book shops do? Maybe a future post?
Thank you for all your posts, they're such a great insight into the British publishing world!
Yes KU also brings in sales and money, in a slightly different way (needs a separate post). Basically you’re paid by number of pages read, instead of “a la carte” kindle sales when the books are not in KU. Lots of big publishers use KU and personally I think it can be v effective for broadening an audience and reaching more readers - some v high quality books and brand authors are in KU! Self-published authors use it a lot as well. Everywhere I’ve worked uses KU (though I believe Penguin do not). Libraries I actually would need to do more research on! I will try to do another post in due course on this. Thank you for reading!!
Hey Phoebe, excellent read. Really interesting and insightful article.
How good are publishers at knowing whether an unpublished book will be a financial hit? Is it largely data driven? Or will there be some talented individual in-house who has an amazing gut instinct for whether a book will sell well? I like to think there is a Lovejoy figure (this reference ages me!) who can divvy a hit novel from the slush pile!
Btw - I finished The Trip and thought it was excellent. Really enjoyed the story. And the craft of the novel around suspense and twists were so well executed.
Have a lovely w/e
Best
Mark
Thank you for reading my book! That’s so kind. It’s a mix - a lot of it is based on sales data of comparison titles, retailer success or otherwise, and an author’s track record (which I wrote another post about). But then there is also gut instinct from editors as well, their passion, and the passion of the team overall. All of that plays into how much we offer and our sales predictions.
Insightful as always!
It’s a weird thing - I *know* how business works, P&L and all that jazz, but when it comes to my books, my heart goes toe to toe with my head every time 😅
Aww x