The Journal Asks Us To Weep for Literary Novelists

A blog about business, finance, and economics.
Sept. 28 2010 11:42 AM

The Journal Asks Us To Weep for Literary Novelists

I'm still drying my eyes over the plight of literary fiction writers, as depicted in a page-one Wall Street Journal story this morning . The story claims that "the digital revolution that is disrupting the economic model of the book industry is having an outsize impact on the careers of literary writers." Whereas once a literary fiction writer might get an advance of $50,000 or $100,000 or more, now, thanks to the increasing popularity and lower price of e-books, these authors are either getting rejected or having to settle for advances in the low four figures.

This story has more holes in it than Albert Hall. It offers absolutely no evidence that literary fiction writers are more affected by this phenomenon than, say, commercial fiction writers, nonfiction writers, science and technical writers, or anyone. It also assumes that the e-reader phenomenon is responsible for the trend, whereas it wouldn't be that hard to find people who could tell you that advances were declining well before e-readers had much of an impact.

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But most frustrating: It fails to account for a simple marketplace fact. If, as the article demonstrates, a digital version of a book sells for less than half the price of the same book in hardcover, it should be possible to sell a lot more copies of the digital book. Another way of saying this is that the size of the advance need not be the end of the story. As the Journal correctly notes: "To secure the rights to publish and distribute a book, publishers pay authors advances against future book sales. After the book is published, the author earns a royalty that is initially applied to the advance. Once the author recoups the advance, he earns a percentage of every book sale."

But the Journal fails to mention two critical things. Based on this formula, an author who gets a lower advance—say, $1,000—will begin to earn royalties after selling a fairly modest number of books, whereas those receiving larger advances may never earn royalties at all. (The industry rule of thumb is that nine out of 10 books will not earn back their advance.)

Second, the typical book contract also pays a higher royalty rate based on higher copy sales. So, for example, an author might receive a 10 percent royalty rate on the first 10,000 copies sold, a 12.5 percent rate on all copies between 10,000 and 15,000, and 15 percent after that. Therefore, selling e-books at a lower price may not be quite the raw deal that the Journal makes out.

That's not to say that the typical literary fiction writer is going to sell enough copies in any format to get back to that prized $50,000 advance. You can be pretty certain, though, that if publishers (including the

Journal

's parent company, which also owns HarperCollins) aren't shelling out that kind of money on an unproven novelist these days, it's because they know damn well that they're not going to get their money back. I feel genuinely sorry for literary writers who are upset by that fact and who have to find other ways to pay for their health care, etc. But the truth is that no more than a few dozen literary writers in any generation have ever been able to support a family based solely on their writing. E-books did not create that problem.

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