The choice between royalties and advances has become a question that does not only concerns authors but also publishers. Self-publishing has given authors the possibility to take chance at earning royalties without waiting for a publisher to accept his book and give advances. A new brand of publishers has been born, epublishers, that mainly give higher royalties to their authors than the Big 6 or established print publishers but do not give advances at all.
Major publishers typically pay 10% to 15% royalties on the suggested list price of hardcover books, and 20% to 25% of their net revenue for other formats whereas self-publishers can get as much as 70% of the sale price from Amazon and Barnes & Noble and some epublishers.
During a session on “Changing Author-Publisher Relationships” that took place at the Digital Book World Conference, Madeline McIntosh, Random House’s President of Sales, Operations and Digital said that over the last five years, for fiction titles, the company has paid 45% to 65% of its sales revenue to authors whereas Little, Brown Publisher Michael Pietsch said that, across all of Hachette Book Group’s titles over the past 15 years, the share of the company’s revenues that has gone to authors has risen from 30% to 40%.
This indicates that many, if not most, books fail to earn back their advances, which benefits authors that do not make it to the best sellers’ list as they already cashed in their advance and can keep it even if not a single copy of their book is ever sold. On the other hand, successful authors would earn more by self-publishing even if their initial investment would be higher.
Publishers still bring to the author years of experience and expertise in editing and book cover as well as a ready made distribution channel. They also shoulder some of the marketing load, though authors are increasingly expected to actively participate in marketing their books.
For those authors who never got a publishing contract offer, self-publishing is definitely the preferred option, as it is essentially the only one. For those authors who have been offered a contract however, they need to consider their ability to auto-produce all the services they would get from a publisher. If they are confident that they can, they might be better off refusing the advance to go solo and jump in the self-publishing pool.