Yesterday, Nate Hoffelder of The Digital Reader called my attention to a blog post by UK picture book author James Mayhew concerning how discounts on book prices can affect author royalties. Nate was curious what my own take on the article was, and has since covered it himself. To keep my own objectivity of viewpoint, I won’t read Nate’s piece (beyond the headline, which popped up in my RSS feed) until I finish writing mine—but from the headline, I suspect our views are going to be strikingly similar.

Mayhew’s concern has to do with an aspect of traditional publishing contracts concerning royalties on titles sold marked down. When a $20 hardcover is sold marked down to $12, the percentage of royalties is figured on that $12, rather than $20—which means the author’s taking a 40% pay cut on that book. (And, for that matter, so is the publisher.) If the author was earning royalties at the 10% rate Mayhew gives as an example, his income dropped from $2 to $1.20 on each book sold—but judging from his article, he’s actually talking about retailers who sell them for $2, which would get him 20 cents per sale. (Of course, being British, Mayhew uses pounds instead of dollars in his own examples, but I’m American so I can use dollars if I want.)

Ironically, when Amazon slashed publishers’ e-books to $9.99, touching off the great agency pricing controversy, it was still paying the publishers the full wholesale rates, which meant in that case the authors got paid based on the full retail price of the e-book rather than the $9.99 sale price.

In traditional publishing contracts, authors are usually paid an advance on royalty earnings—some amount of cash up front that represents the royalties earned on his first few thousand copies sold. For example, if the author was paid a $10,000 advance, he would have to sell 5,000 copies at the $2 royalty rate to earn any additional money out of it. (As I understand it, most advances paid to new or midlist authors are considerably lower than that, but I’m trying to keep the numbers round for the sake of the example.)

Mayhew’s problem is that, when books are sold at a discount, the number of copies an author needs to sell to earn out that advance goes up accordingly—just imagine how many he would have to sell at the 20 cent royalty rate—and even earning out at the list price is by no means assured. In the UK, small market that it is, picture books usually have print runs of fewer than 3,000 copies, and Mayhew’s writing, illustrating, and living expenses eat up most of his advances.

The thing that has Mayhew so upset isn’t so much that stores put these books on sale at low prices as it is that his own publishers are effectively torpedoing him:

Some discount catalogues sell off reduced stock that was over printed; that makes sense. But increasingly, publishers broker cold, hard, cynical deals with these people and then print to order. The publisher is complicit in the arrangement and sells books at extremely low prices (less than 50p per book) to the discount catalogue (but not at a loss to themselves) who then sell them on at a very nice profit – usually £1 per book. Tens of thousands of copies. And the author? I get less than 4p a book, while the discount company makes millions every year. Quite how books are produced this cheaply, I’m not sure – but I have been reassured by my publisher that they follow a code of ethics, and the printer, in China, isn’t a sweatshop. Perhaps a similar code of ethics needs to be applied to authors?

Frequently, Mayhew notes, authors have little to no control over these agreements and end up having all their hard work writing, illustrating, promoting, and otherwise pushing their books undercut by the actions of their publishers. Hence, it is his position that readers should take a principled stand and refuse to purchase books from these discount catalogs, given that they are not contributing to authors’ welfare.

My immediate reaction is that this smells an awful lot like a “first-world problem”—as explicated in the above music video, something that’s only a problem at all for people who have such incredibly high privilege from living where they do that they don’t have to worry about real problems, such as the rampant disease, starvation, and lack of access to education of the third world.

Where do I even begin here? For starters, perhaps Mayhew is looking at advances the wrong way. As I understand it, many books never earn out of their advances. This is especially true at the rarified levels of celebrity authors like Stephen King, John Grisham, or (dare I say it) Snooki, who receive advances in six and seven figures with the understanding that it could take years for even their books to sell that many copies, but it could be just as true (if not more so) for beginners and midlisters.

I’ve frequently seen authors advised to plan as if their advance is all the money they’ll ever receive for the book, and treat anything that comes in beyond that advance as an unexpected but welcome windfall. Planning in that way also removes the bite of any publisher discounts—what does it matter how long it takes your book to earn out? You’ve already been paid for it. And if you couldn’t get a big enough advance, well, maybe you should have held out for more money.

Another point is, it’s well and good to ask consumers to pay more for their books to support authors. But if you’re looking for a real solution, asking consumers to forego a bargain is a losing proposition. Frankly, in this world of rampant piracy and second-hand books, you should be glad they’re buying your book new at all. (I almost included “libraries” there, but in the UK authors get paid for library loans.)

It seems to me that Mayhew is focusing his attention on the wrong side of the equation if he wants actual change in how authors are compensated. If authors want publishers to stop taking advantage of them, how is begging readers to spend more money going to help with that?

The people to whom Mayhew should be addressing his plaint are authors—including himself. If your publisher is treating you in such a shoddy fashion, stop doing business with that publisher and find a better one. (Assuming that said publisher hasn’t locked you into a relationship with its contract terms. If so, better be prepared to lawyer up! Or “solicitor up,” as the case may be.)

But what alternative do authors have if every publisher across the industry is going to treat them the same way? Self-publishing boosters might smirk and clear their throats meaningfully here, but in all fairness, self-publishing may not be the right choice for everyone. If you can stomach all the extra work, though, it’s an attractive alternative. You don’t get an advance, but you get paid enough per copy that you can earn more with a lot fewer sales.

But if you can’t get contract terms you can live on, and you can’t self-publish,  then you have to do the same thing that anyone does who can’t make a living in their current career—find another career. The world doesn’t owe you a living just because you’re a writer. I expect burger flippers, if they had their druthers, would get paid a lot more for flipping burgers, too. If enough authors jump ship that publishers start to feel the pinch, things might just get better for everyone.

Of course, it’s by no means guaranteed that enough authors will do that—but there are a lot fewer authors than there are consumers, so the chances are better that it could reach critical mass.

So, before authors bellyache about publishers treating them unfairly, perhaps they should consider whose fault it really is that they’re in that position? Readers will frequently save whatever money they can from lower prices—and those lower prices only exist in the first place because the publishers enabled them. And who’s enabling the publisher to offer their work at those low prices by selling it to the publisher


  1. FYI — the numbers cited aren’t right for a US trade book contract. They sound more like a non-trade contract.

    Trade books are novels and all non-fiction that you might normally expect to find in a general interest bookstore.

    For trade books, the author gets a royalty on the LIST price, not the revenue after discounts, for sales at normal bookstore discounts (40%). They get a reduced royalty on sales at very high discounts.

    If the publisher needs to get rid of printed copies that aren’t going to sell at extreme discounts, or if they’re selling at high discounts to book clubs and other things that are more about marketing than sales, then the author needs to take a hit on that, too. It’s only fair.

    If the publisher sells copies at less than the direct unit cost, then the author gets no royalty. That, too, is fair — it’s almost never done while the book is still selling strongly (or at all), or it’s done to get rid of copies that are damaged, and can’t be sold as new.

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