ILONA ANDREWS

#1 New York Times Bestselling Author

You are here: Home / Blog / Earning Out and Other Questions

Earning Out and Other Questions

Blog, Business of Writing POST A COMMENT by

Mod R has sent over November blog prompts. We will be starting with some industry questions.

Why do they pay celebrities these giant book advances? They can’t earn out.

You don’t have to earn out to be profitable for the publisher. We’ve covered this before, but a quick refresher, so you don’t have to flip back and forth.

For the purposes of simplifying math, we will be working with ebook royalties, which are 25% of the publisher’s receipts.

Let’s say we have a book priced at $9.99 with a $10,000 advance. The retailer takes 30%, so the publisher gets $6.99 from each sale. The author gets 25% of that, which is $1.75 and the publisher keep $5.24.

Let’s divide $10,000 by $1.75. We get 5,715 (rounding off to a whole book) units. That means that once the author sells that amount of books, their advance is recouped and they start earning royalties.

Now let’s divide $10,000 by the publisher’s cut, $5.24. We get 1,909 units. That’s when the publisher starts making money.

So we have 1,909 on one side of the interval and 5,715 on the other. If the sales of the books fall anywhere between these two numbers, the book has not earned out but still made profit for the publisher. For example, let’s say the book sold 3,000 copies. The publisher receives $15,720, $5,720 profit.

Now then, let’s say you had a celebrity book with a $1,000,000 which sold 300,000 copies. The publisher’s cut on that baby is $1,572,000. Even with a million dollar advance, $572,000 is a great return on investment. The author didn’t earn out, but look at this money the publisher netted.

Most celebrities don’t sell that much. Let’s take Azis Ansari’s Modern Romance as example. His advance was $3.5 million. In the first 3 months, his book sold 282,000 copies. (Source: Celebrity Book Advances, Business Insider.)

If we apply it to our model and if this book was published today as an ebook at a price of $9.99, his sales would net the publisher $1,477,680, far short of his advance. These are not his actual sales because I am using an article from 2016 for my numbers, and back then hardcovers were more significant.

There is also a celebrity factor: the book is available in perpetuity and any time Mr. Ansari makes a splash with his career, it gets a sales bump. He might have earned out by now.

Still seems like a bit of a risky investment, doesn’t it?

But then we have Tina Fey’s Bossypants. It came out in 2011 with an advance of $6 million and it sold a whooping 3.5 million copies in the next five years. (Source: Celebrity Book Advances, Business Insider.)

Applying our funky math, in today’s market conditions and published only as an ebook with $9.99 price tag, Bossypants would have earned the publisher $18,340,000. Not surprising because Tina Fey is an excellent writer.

So here is your answer. The publisher doesn’t know if they have Bossypants or Modern Romance on their hands. Nobody can predict exactly how many copies a book will sell. They are essentially gambling. They roll the dice and cross their fingers, because the potential profit can be enormous.

What do you think makes a book more likely to reach USAT #1 ? This may seem silly, because ‘duh, why write a book if it’s not successful?’. But similar questions arise about commercial art in other creative fields. For example, when a painter reaches a certain level of competence, choices can be made about what is created. Does the artist go for commercial work (perhaps suppressing inner feelings), and so choose subjects which are likely to draw the attention of a large number of “gentlepeople” buyers, and which are known to sell well, eg., puppies, kittens, nudes, or does the artist go for subjects that have a different motivation.

If there was a formula to it, every writer would be a bestseller. A kind of a cop out answer, but true. In practical terms, upper levels of USAT require either a built in audience or wide promotion.

USAT for this week

Diary of a Wimpy Kid, 16th in the series. Game On, 28th in the series. The Stranger in a Lifeboat, a celebrity author with a long career and TV exposure on SportsCenter, Oprah, etc. Lore Olympus, graphic novelization of a long-running and popular webtoon. The Judge’s List, established celebrity author. Dune, the movie is out.

This is pretty typical. The key factor is the built in audience.

Now to what you are really asking. Do you have to compromise your artistic integrity for commercial success?

First, commercial fiction is not a homogenized group. The Song of Fire and Ice and The Wish by Nicholas Sparks are both commercial fiction, but they are radically different in genre, philosophy, structure, and tone. GRRM starts with brutality and incest and then dials that up a notch, while Nicholas Sparks writes variations of “white people fall in love and then it’s really sad.” I’m sure someone had told GRRM at some point, “Oh this is too violent, it won’t sell.” But it did.

Second, writing commercial fiction “on purpose” is difficult. Years ago, during an urban fantasy/paranormal boom an author I know who always skewed toward more “artistic” end of the speculative fiction got frustrated and declared that she too would write a commercial urban fantasy novel and it would land on all the lists, because clearly there was a simple formula to it. She felt that her work was much more complex, so surely she would be able to fire off a quick commercial novel. Some time passed, and then she stopped talking about it. If she has written one, I haven’t seen it.

A book is writer’s communication to the world. It is what it is. Your inner feelings is what gives the book meaning. Why write a book if it’s not successful? Because you are compelled to do it. Most commercial books started as passion projects. They just happened to appeal to enough people to sell well. I don’t know how you can artificially duplicate that.

Even though I’m a commercial author, I have no idea what makes a book commercial. I think I know it when I see it in other people’s writing, but I am also often wrong. I am also the person who tried to pull Sweep of the Blade a week before it went on preorder and almost didn’t finish Blood Heir because I didn’t think they would sell.

There are writers who openly chafed at the burden of commercial success and felt that it did compromise their artistic integrity. Conan Doyle ended up hating Sherlock Holmes eventually because he felt the commercial nature of the character overshadowed his other projects, which he felt had greater literary merit. But I also suspect that when he wrote his first Sherlock Holmes story, it was great fun for him.

So my advice is write for yourself, and if you’re lucky, it sells. Don’t compromise, if you can help it.

NEVER MISS A BOOK RELEASE

Join 30,000 Subscribers

CLICK HERE TO SUBSCRIBE TO
PUBLISHING NEWS

New book releases, give-aways, and appearances.

CLICK HERE TO SUBSCRIBE TO
BLOG UPDATES

Free fiction, snippets, and funny stories.

Read our Privacy Policy.

Reader Interactions

Comments

  1. Thank you for sharing a behind-the-scenes look. Happy Tuesday to you. Pup here is yowling at the fog, “Shoo, fog, go away!”

    • I love these blog entries where you address the business side of writing! It’s such a fascinating topic and I really appreciate your honesty. Thank you!

  3. Wow, I didn’t even realize Lore Olympus sold so well! Very happy 🙂

    Also:

    “while Nicholas Sparks writes variations of “white people fall in love and then it’s really sad.”

    made me cackle xDD

  4. I appreciate the insight into the publishing world but my main takeaway is “gosh, I can’t believe Stephanie Plum is still going; did she finally settle down with Joe and is grandma OK? Maybe I should start that series up again…”
    Which I guess gives great credence to an established readership because I stopped back around book 14 or 15 I think it was as I was getting fed up, yet here I am considering jumping back in!

    • Same response for me. There’s only so long that I’ll put up with the will-they-or-won’t-they question. Let me know what the answer is. ????

      • I found laughs till book twenty-three. Without giving anything away, Grandma is alive and the romantic triangle remains unchanged. I am very patient but 24 was truly bad a mix of an old series Janet Evanovich wrote and a hint at supernatural which never pans out. The Twenties sound exciting but are not. However 18 is a must read IMHO

        • Nothing has ever topped Grandma shooting the turkey, imo. Though I still read them when my library gets them in. I haven’t bought any in a very long time, actually sold my set on ebay a few years back.

    • That was my first thought at reading the list, Stephanie Plum is STILL going? I mean, I quit around 12, I think. Now, I’m still reading the very formulaic Robb’s In Death at what? 40ish but I will take a break for a few years then catch up. And of course, I still read certain DiscWorlds every single year.

  6. Pretty sure I speak for a lot of the BDH when I say thank you for not pulling Sweep of the Blade or Blood Heir!
    I could gush a lot about Maud and the suspense of waiting for Blood Heir but I’ll keep it short 🙂
    The BDH: if you write it, we will buy.

  7. Interesting as usual. Thanks for the recap! Also, seems like it’s a waste of time if you don’t enjoy what you’re writing. I realize everyone IS trying to make a living, too. But it’s still important to have joy in the work. And pray it sells well, natch.

  8. The industry questions are really interesting glimpses of the world of writing.
    But to think we came so close to not having Maud and Julie – the world would have been less for not having those books in it. Glad both were released, and also glad that you care so much for your characters.

  12. Interesting! This came up for me lately. I make cute little animal sculptures. I entered a local art show, and was told my art didn’t have enough “depth”. It’s cute, it generally makes people smile, and it sells. I think that’s good enough for me. Lol

    • I once had someone critique my taste in music because it was too mainstream and therefore didn’t make anybody feel anything.
      *squints at that guy*
      Look, I don’t care what music anybody listens to or why. I listen to a lot of mainstream music because it’s easy to find and I’m not so passionate about music that I want to spend hours searching for a song I love amongst the multitudes of Indy musicians out there. But I don’t listen to any music that doesn’t make me feel SOMETHING.
      Art is subjective; pretentious people can preach all they want but at the end of the day, there‘s many types of art, and they all have their place. What I like to see in a museum may not be what I want to hang on my wall at my house (and lord knows my 3yo nephew’s crayon portrait of me is the most insightful of impressions ever to grace a refrigerator). Complex French cuisine is delicious but so is my grandma‘s dumpling soup (and sometimes I just want peanut butter on toast!).

    • I once one first place in a high school art contest with some stuff I threw together in five minutes (because I was all tapped out that day in art class). There’s no telling what people will like when it comes to those things. I have no talent artistically, and there were pieces done by my peers that were far more worthy, imo. I felt bad, as I didn’t even enter it, my teacher did.

  14. A romance author I know (very slightly) recently posted that she finished a book that was hard to write. “My next one will be pure fluff,” she insisted. My comment was that pure fluff is hard to write.

    • Not so difficult for Barbara Cartland, with her handful of themes. There is only so much I can read of her before needing something with a little more. It doesn’t have to be adult fun time, it can be humor, suspense, magic…but too much fluff is like too much cotton candy, you start to feel sick.

  15. I really hate how commercial novels have this bad rep of being lesser, the same way it’s referred to as “women’s fiction”, “a guilty pleasure”, and stuff like that. My response to anyone sneering about these commercial genres is “sure, literary writing has its place in publishing, but commercial writing pays for it”. And then I tend to explain how internal subsidising works in publishing…
    (Yes, said explanation is more rant-like than it probably should be, but we’re all allowed our hot buttons! 😉 )

    • Exactly this
      I hate how in the UK they call commercial women’s fiction ‘chick-lit’. It’s so demeaning and authors like Marian Keyes who write BRILLIANT, insightful, funny novels with depth can get overlooked.
      How are books that are often about everyday lives of ordinary women less substantial than the latest cop/military/spy thriller ????

  17. There is a reason that my favorite books seldom end up on the best seller lists. My reading tends toward things that skirt the edges of popular fiction and really random non-fiction.

    I am always surprised when something I like ends up on any list

    Not one of those books is on my want list, though I *have* owned a copy of “Dune” since it came out…

  18. I have wondered if this type of publishing interests you guys. Physical graphic novels Ie comic books? Could see Patricia Briggs, and also Jeaniene Frost.
    Hmm group comic vs anthology?
    am a major fan of Ben Aaronovitch. He began the magic fantasy/police procedural Peter Grant series.
    He also started to co-author with Andrew Cartmel related graphic novels. They are listed at Amazon in Kindle & comiXology. It looks like each costs about $11.99
    Unsure if physical versions sold too.

    They seem to generate sales, and a loyal following. They expand on events after or between published novels. Not cartoonish.

    That chapter you love but does not flow in the large novel turned into a posative cash flow?

  20. I often wonder how much of that I pay gets to the writer. I have Kindle unlimited to read lots and series and authors but I also buy books on my Kindle us app, yes I have two Kindle apps. It works for me.

  22. I am not sure this is the right place, but New Zealand’s national library is threatening to put all fiction by non-NZ authors
    in their collection into the literary version of the way back machine, thus damaging the authors’ copy right status. If you protest, supposedly they won’t do this, though I have no guarantees. Just in case you hadn’t heard.

  23. I agree with you completely about “writing for yourself.” In the end, that’s the only way it can stay fun for you, and you’re the one spending your precious life time doing it. Keep it fun, keep listening to your intuition, stay in the creative flow, and the joy will last all your life. Ultimately, you are adding to the overall joy in the world, just by being a fulfilled, happy, creative person, and the world sure needs it.

  24. How did Erin’s Nanowrimo turn out? Do you think she’d be willing to share how her experience went and if she’d do it again?

    • Hi! NaNoWriMo goes until the end of November, or until you get to 50k words–whichever comes first! In my case I am really happy (and a little surprised) to say that I am actually on track to finish on time. House Andrews was VERY helpful and one thing they unlocked for me that I needed to focus on the murders to figure out where my story was going, and then fill in the stuff partially by having fun with it and, they didn’t say this, but letting the characters show me where they were going to go. So far so good.

      One key with NaNoWriMo is making sure you are plugged in to support either in one of the many discords, facebook groups, etc, but also with buddies. I have a writing buddy who is being awesome at checking in and cheering me on. The facebook groups and discords are full of people bemoaning their flagging stamina and motivation. On the other hand, some people have already hit 50k, which is….amazing. I’m just happy to be on pace and doing consistent output!

      On a personal note, I am quite suddenly dealing with a couple of bereavements and it’s been extremely difficult, emotionally. I’m finding NaNoWriMo is a positive distraction.

      Thank you so much for asking!

  25. In the $10,000 advance example, until the author earns out, the publisher gets to keep the full $6.99, because the author has not earned out yet, so the publisher starts making a profit at 1431 books sold, and keeps the $6.99 until the author earns out.

    • Bob, I think you read over this part:

      “Let’s divide $10,000 by $1.75. We get 5,715 (rounding off to a whole book) units. That means that once the author sells that amount of books, their advance is recouped and they start earning royalties.”

      Of course, the publisher “keeps” the author’s portion until the advance is recouped but on a royalty statement the amount the author earns from each sale is listed under author’s earnings. It’s just that the author’s column starts with negative balance, reflecting the advance.

  26. This is interesting; I was just looking up an author that disappeared about five years ago when her only successful series was canceled. She had a few other series that she had started, but none of them did very well compared to her initial success. She blamed the popular series being cancelled due to the other series not getting enough sales. I’m not sure, but I think she was trying to write books that would hit those lists, as they all had very similar elements to the popular series. TBH, none of the other series had that thing that made the first series so good.

  27. “…who tried to pull Sweep of the Blade a week before it went on preorder and almost didn’t finish Blood Heir because I didn’t think they would sell.” Thank goodness you were talked off the cliff. These are two of my favorites

  28. Thanks for this post! I have one doubt though regarding the hypothetical example of the book priced at $9.99 and the author receiving $10,000 advance (Apologies if this has already been asked!).

    If the book sells 3,000 copies then shouldn’t the publisher make $20,970 as the author does not receive royalty till 5,715 copies are sold and the publisher receives the entire $6.99 per book? Similarly shouldn’t we divide $10,000 by $6.99 to get the number of copies need to be sold (~1,431) for the publisher to start making profit? Or am I missing something?

    • Yes and no. Yes, the publisher “keeps” the entire $6.99 until the author earns out, but the publisher’s share is $5.24 cents. It’s not $6.99. 🙂

      The publisher is also in a hole for $10,000 of the advance and these two things are counted separately.

      Here is how the accounting goes:

      Publisher -$10,000
      Author -$10,000

      1 book sells.

      Publisher – $10,000 + $5.24.
      Author – $10,000 + 1.22 – No payment due

      What you are thinking of looks more like

      Publisher -$10,000 +$6.99
      Author: 0

      It’s not wrong, but that’s not the way the accounting of it works. Think about splitting the money that comes into two baskets. Publisher’s cut and the author’s cut. They are not mixed, they are separate.

      • Thank you so much for the response!! I would very much like to ask a follow up question.

        If the book sells 3,000 copies and the publisher needs to pay tax on the net profit, would they pay it for a net profit of $5,720 or $10,970 (20,970 – 10,000)? I believe the author will pay it for $10,000.

  29. I had never googled Blood Heir since I usually order via link from the site or Amazon recs but did since I tend to highlight and right click when no link available. That was an interesting top 3 search result not related to your books. Did you have any thoughts on renaming it or was there enough info supporting how people tend to buy your books not via title based Google link ins?

    Do Amazon publishing imprints change this equation as well? Your explanation of KU https://ilona-andrews.com/2019/ku-availability/ encouraged me to be selective and purchase or ask library to purchase via Overdrive what I want instead of subscribing to help diversify/encourage quality, even among a very very commercial market. However, I recently subscribed to KU as part of a promo offer to catch up on some known-to-me author backlogs over the holidays and now the kindle store front & browse pages seem to be offering me more KU (or perhaps reinvigorated interest due to new kindle paperwhite release like my situation). Maybe this works for the half of KU subscribers who don’t buy books but it isn’t working for my habits which aren’t all that appreciative to a lower quality AYCE (all you can eat). Is Amazon making more from a KU book/author than the 30% retailer cut?

    • Part of re-subscribing to KU was also to see what changed since I last tried it ~ 2-3 years ago. The re-ranked browse page via Kindle app on mobile device seems to be a change which didn’t seem as aggressive in the month before subscribing. My last ~ 5+ transactions were half outright purchases, 2 of a KU author, and 1 KU loan. Kindle Paperwhite also has an OS update with new UI which seemed to promote the KU subpage instead of my usual “you read this author, you might like these (for purchase) books” recently read future purchase suggestions.

      I’m not loving these changes.

  30. Ok, Now I need the ????. I want to know who this author was that we’re still waiting on their “instantly commercial ” urban fantasy from? ???? As if there’s an easy button. The audacity. ???? But really, who is she?

  31. After reading all of this, I think that my plan for living day to day is keep buying those lottery tickets. Sigh.

  32. I have to say, I really appreciate you sharing all this. And not only telling how it works, so we can understand why and how, but even with examples and already doing all the maths. For everyone who is interested in these things, you always give us such a detailed answer. Thank you so much!

  35. Hi Mod R
    I can’t find an email to send this so I hope you see it and can pass it on.

    Ilona and Gordon, thank you both so much for the gift of fated blades.
    It was deeply satisfying in this uncertain world (currently day 100 odd of Auckland lockdown)

    Thank you for the laughs, adrenaline and escape.

    Thank you for the art and joy you bring to the world.

    Wishing you a joyous and connected Thanksgiving with lots of hugs and minimal drama.

    Thank you again
    Jo

Skip to content