Wednesday, October 10, 2007

Bundling Advances for Revised Editions

My friend "Bob" wrote a book for a publisher that earned out his substantial advance and eventually sold tens of thousands of copies. After two years of sales, the book needed to be updated; the subject matter was topical and recent events meant that the first edition was no longer current. The publisher offered a significant advance, a fifth of the original advance, for a new chapter and touch work that would constitute a revised second edition. He agreed and finished the work in just less than a month.

Their original agreement stated that "Bob" would be paid royalties in January for books sold the previous January-June. He did his re-writes for the second edition in September. When his January royalties payment came, he discovered that his "advance" for the revised edition had been subtracted from the royalties he had earned January to June. In effect, his advance was not an advance against future earnings but an advance taken from money he was already owed. His net gain for a month's effort was being paid in late September rather than in January.

Bob was furious. His agent told him this was "standard industry practice." Is Bob silly for being angry with publisher and agent?


I think Bob is silly for not having paid attention to the contract for the revised edition when he signed it. But what’s done is done. Yes, it is “standard industry practice” to bundle together a revised edition with the original. Why wouldn’t it be? It’s essentially the same book. However, “standard industry practice” can always be changed. I have negotiated a number of revised editions and in some cases, with some publishers, I have been able to get them separately accounted from the original edition, essentially accounting them as if they were two different books. With other publishers, however, I wasn’t so lucky. They were adamant that the books be accounted jointly.

What Bob should also be aware of, and what is probably of a greater concern than the advance being deducted from royalties of the original, is that it is very likely his royalties, if he had an escalating royalty schedule, will start again from the beginning. This is the most frustrating issue for me and my authors. Just when you finally reach that break and are earning a higher royalty percentage, the publisher asks for a revision (usually needed) and the royalties start over again at zero (zero copies, not dollars).

Essentially, though, Bob has not lost any money, he just didn’t gain like he thought he would. Remember, the advance is just that, an advance against royalties. So while Bob saw a decrease in his most recent royalty statement it’s not like he didn’t get the money anyway. And sadly, I think Bob is silly for being angry at his publisher and agent. I assume the agent negotiated to the best of her ability and the publisher is not out to benefit the author, the publisher is only working to benefit itself. Bob should be angry at himself for not carefully reading contracts before he signs them.

Jessica

6 comments:

Mike Davis said...

"I think Bob is silly for not having paid attention to the contract..."

Well said. As much as we hate to admit it, so many problems arise from not reading and understanding exactly what we are signing our name to.

In the life I must lead until I finish that breakout novel, I earn my living putting out the fires that failure to read and understand contracts invariably ignite. So much time and money, not to mention anguish, can be saved with a little attention to detail before committing a signature to a document.

Jenny said...

Wow, that story makes me feel lucky. I negotiated all my nonfiction contracts using what I learned in the the Balkin book and when I went into a new edition, I had no problem with getting a separate accounting for my second edition or starting the royalty escalation for the second edition from the perchentage I'd attained on my first, very successful edition, went out of print.

On the first book, I'd negotiated an escalation for a breakpoint I knew my publisher didn't expect me to reach, but I was pretty sure it would, because of the way I was using web marketing, and sure enough, I hit it.

That was years ago, but I advised a friend whose successful book was going into a new edition to do the same just last year and it worked.
I cannot say enough about Richard Balkin's How to Negotiate a Book or Magazine Contract as a useful guide to writers. Even if you have an agent, it will help you understand what the agent is doing for you.

Mark Terry said...

"I assume the agent negotiated to the best of her ability and the publisher is not out to benefit the author, the publisher is only working to benefit itself."

This is a pretty important statement you make here. I think it's something authors need to keep in mind because although I like my publisher okay, as my agent says, "Business is business" and you need to remember that your agenda and the publisher's agenda, although overlapping, are not completely alligned.

Michele Dunaway said...

Mark said, This is a pretty important statement you make here. I think it's something authors need to keep in mind because although I like my publisher okay, as my agent says, "Business is business" and you need to remember that your agenda and the publisher's agenda, although overlapping, are not completely alligned."

Exactly. One always has to remember that they can be replaced. Not that you don't want to negotiate well or just jump off into the abyss and let them run rampant. But that the publisher knows the next big thing might be the person clammoring for your spot who is desperate to sell his book. Just look at all the one hit wonders in the music industry. It's often cheaper and more profitable to buy and exhaust talent than to keep it and build it.

As authors, we need to read everything carefully and work in our best interests.

L Temple said...

I think one thing has been missed in all this. Why was Bob surprised by this situation? Did his agent explain this to him a head of time? I have a friend who found themselves in similar circumstances. If it's the first time a writer has done a second edition are they magically supposed to understand what is considered an industry standard practice without someone explaining it to them?? I don't think Bob was silly for being upset because he probably wouldn't have been upset if someone--and I assume it should have been his agent--had made sure he understood the situation ahead of time.

Erik said...

At some point, isn't the agent akin to a lawyer or realtor - an advocate for the client? In that role, it seems to me that explaining the contract - especially the standard language - is part of representation.

I realize that realtors often just say, "Sign this, it's standard". My analogy may not be perfect in that sense. But even the longest contract can be boiled down to a simple representation, especially when it's a standard practice and the short version can be reduced to boilerplate.