Oh come on, so if you don't somehow make your first book a success you've "blown it"?
Yes. In the eyes of your editor's boss, the VP (Marketing), you have blown it if your first book doesn't break even on P&E. Break-even comes some time before you earn out the advance, but even so: if you don't break even on your first contract they'll drop you like a hot potato. Especially if someone gambled $1.5M of the corporate turnover on you and lost!
Assuming an average royalty rate of 10% -- it varies from 6% up to 15% in commercial fiction, depending on print run, format, phase of the moon, elevator clauses, and so on, but 10% is about right for a big hardcover run followed by a metric buttload of paperbacks -- then you can multiply the author's advance by ten to get a handle on the amount of turnover the publisher was betting on her. Which in her case was on the order of a million dollars.
Her final tally: 10K hardcovers and paperbacks sold. Even if those 10K sales were 100% hardcover at undiscounted list, they didn't turn over $0.24M (and more likely they broke down into something like 2500 hc and 7500 mmpb, in which case total turnover for the book was more like $100K). Actual profits for the publisher are typically about the same as the author's advance (a lot of money goes into the pockets of the distributors and retailers). So they were looking to make about $150K in profit, and instead made $10K and lost $150K on the advance (not to mention another $100K on the unsold copies they pulped).
If they'd given her a $10K advance they might have patted her on the head and said "there there, dear, let's try again, shall we?" But you don't get a second chance if you lose big right off the block. The usual response is to bury it deep (before someone higher up notices the oopsie and fires the responsible party).
In today's publishing industry, you're only ever as good as your last book. And if Mark Twain was alive and writing today he'd be an embittered blogger.
Yes. In the eyes of your editor's boss, the VP (Marketing), you have blown it if your first book doesn't break even on P&E. Break-even comes some time before you earn out the advance, but even so: if you don't break even on your first contract they'll drop you like a hot potato. Especially if someone gambled $1.5M of the corporate turnover on you and lost!
Assuming an average royalty rate of 10% -- it varies from 6% up to 15% in commercial fiction, depending on print run, format, phase of the moon, elevator clauses, and so on, but 10% is about right for a big hardcover run followed by a metric buttload of paperbacks -- then you can multiply the author's advance by ten to get a handle on the amount of turnover the publisher was betting on her. Which in her case was on the order of a million dollars.
Her final tally: 10K hardcovers and paperbacks sold. Even if those 10K sales were 100% hardcover at undiscounted list, they didn't turn over $0.24M (and more likely they broke down into something like 2500 hc and 7500 mmpb, in which case total turnover for the book was more like $100K). Actual profits for the publisher are typically about the same as the author's advance (a lot of money goes into the pockets of the distributors and retailers). So they were looking to make about $150K in profit, and instead made $10K and lost $150K on the advance (not to mention another $100K on the unsold copies they pulped).
If they'd given her a $10K advance they might have patted her on the head and said "there there, dear, let's try again, shall we?" But you don't get a second chance if you lose big right off the block. The usual response is to bury it deep (before someone higher up notices the oopsie and fires the responsible party).
In today's publishing industry, you're only ever as good as your last book. And if Mark Twain was alive and writing today he'd be an embittered blogger.