Here’s the beginning of a very good article on Dear Author. The rest is well worth reading.
Diane Pershing’s stance, and one that she is taking on behalf of the RWA, is that digital publishing model of high royalties v. no advances is not a legitimate business model. This post discusses why digital publishing is legitimate and offers insight (I hope) for whom digital publishing might benefit.
The digital publishing model.
The digital publishing model is characterized by a few elements:
High royalty (usually between 35-40%)
No resale market
The print publishing model.
Some advance from $2000-$1 million or more per book which is a prepayment against royalties. These advances are usually paid in increments. Most contracts are for more than one book and therefore you get some amount of the advance when you sign the contract, some amount when you deliver the first book, some amount when your second book is accepted, some amount when you deliver the second book. (This may vary from contract to contract and author to author, but generally you do not get the entire advance in one lump sum).
Low royalty. Most print authors receive 6%-10% on mass market sales, 8-12% on trades, and 15% or higher on hardcover sales.
Reserves held against returns. In a royalty statement, the author’s royalties are held as reserves against future returns from the bookseller. These reserves can be held for months or even years.
Quarterly or semi annual payments, if your royalties exceed your advance