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Admit it, you might write because you have a story that must be told but there is some part of you that dreams about becoming the next J.K. Rowling. Bu unless you are lucky enough to have a publishing contract, the details might be a bit fuzzy. Lucky for us, Susan Spann over on Writers In The Storm shares what happens in publishing deals. Did she miss anything? Let us know in the comments below.
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Royalty Clauses in Publishing Deals: How (& How Much) Authors Get Paid
“Royalties” is the publishing industry term for money paid to an author (generally, by a publisher) on sales of a published work. Most authors receive the bulk of their writing income from royalties, which makes them a critical feature of publishing contracts.
How are Royalties Calculated?
Royalties vary from contract to contract, and across different publishing formats. However, industry-standard royalties are normally based on a percentage of either: (1) the money the publisher actually receives on sales of the author’s work, or (2) the sale price of the work. (Most commonly, royalties are based on a percentage of the publisher’s receipts.)
Royalty percentages are either calculated on a “gross” or “net” basis—but those terms can be tricky, because publishers and contracts don’t always use them consistently. Good contracts calculate authors’ royalties as a percentage of the publisher’s receipts – the money actually received from buyers or resellers (less refunds and returns). That’s a “gross” method of calculation.
Dangerous contracts allow the publisher to deduct certain costs (sometimes including marketing and advertising costs as well as publishing costs) from receipts before calculating the author’s royalties. This is “net” calculation, because the author’s percentage is calculated on “net profits” – meaning receipts minus some or all of the publishing costs. Traditional publishers don’t expect or ask authors to share the publishing costs, or the publisher’s marketing costs. No exceptions.
How Big is the Author’s Royalty Percentage?
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