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A blog wherein a literary agent will sometimes discuss his business, sometimes discuss the movies he sees, the tennis he watches, or the world around him. In which he will often wish he could say more, but will be obliged by business necessity and basic politeness and simple civility to hold his tongue. Rankings are done on a scale of one to five Slithy Toads, where a 0 is a complete waste of time, a 2 is a completely innocuous way to spend your time, and a 4 is intended as a geas compelling you to make the time.

Monday, March 24, 2014

Royalty Season, Spring

We are settling in after our move just in time for the arrival of royalty season.  In fact, some German royalties from Heyne, which were the first buds of the season or sprinkles of the monsoon or flakes of the blizzard arrived almost simultaneous with the move.

And I realize in six years of having Brillig, I've never spoken much about royalty season.

First, royalty season in the publishing industry doesn't arrive at the same time for everyone.  It isn't like spring or fall, but rather more like the last frost.

When I was at the Scott Meredith Literary Agency in the early years of my career, royalty season arrived on February 1 and August 1.  Random House was due to send out reports the last day of January and last day of August, and they were very nice about it.  They didn't entrust their big checks to the Post Office in order to get another day or two of float, but rather would messenger them over, though late in the day so the check couldn't make it to the bank for that day's deposit.  Carl Sagan -- Random House author.  Norman Mailer -- Random House author.  Margaret Truman -- Random House author.  All of the many Scott Meredith clients published by Del Rey -- Random House authors.  The Mists of Avalon -- Random House.  Blade Runner -- Random House.  2010 Odyssey 2 -- Random House.  So when Random House reported royalties, that was when we had royalty season.

At JABberwocky, the vast preponderance of our authors are published by the Berkley Publishing Group part of Penguin, which reports on/about March 31 and Sept. 30.  Charlaine Harris, Jack Campbell, Simon R. Green -- all NY Times bestselling authors with many many books, all Berkley Publishing Group.  Along with some of our Roc authors.  And DAW, with many of our other authors, usually sends statements along a few days after Penguin in April, and a few days before in September.

I think Scott Meredith had the better of it, because the Random House statements were a bit off from everyone else's.  It wasn't one super big season, but rather helped to spread it out a bit more.  For us, it's not just Penguin on March 31 and Tor on April 30 but most of our big German and UK statements that want to come in then along with lots of miscellaneous others.  Just about everything comes in between March 20 and May 10, and between September 15 and November 10.  Less than a third of the year with two-thirds of our royalty paperwork.

So that is royalty season.

This is going to be a series of posts, and if that's the introduction let's put up Chapter One now as well, which is to talk about what I saw when I looked at royalty statements at the start of my career.   It was a lot different, if also in some important ways not so different at all, from what I see now.

One very important thing to keep in mind in this entire discussion, so I will say here and repeat often in different keys:

Most of the books publishers send to bookstores can be returned to the publisher for credit.   So a book that is sold might not be.  To protect against paying royalties to authors for copies that bookstores might return, publishers are allowed to hold a reserve against returns.  We sent out 30 copies, we will reserve 10 or 20 that we feel have a reasonable chance of coming back.  So I am going to use "sold" in quotes here, because it was very much the case twenty years ago that the number of copies on a royalty statement was the "in quotes" version.

For Penguin or for Kensington, the number might be the number of copies "sold" in a given accounting period.  That number came on a little 5x7 (maybe, don't have any at hand) piece of paper that came off of a computer.  And there wasn't much more than that one number to look at.

Random House gave multiple numbers, the number of copies "sold" over the six months and the total number of copies "sold" to the end of the period.  Their number came on a big oversized piece of computer print-out paper which made it seem especially important and true.

Berkley gave their numbers on an 8.5x11 sheet of paper which made them easier to file.

DAW gave many numbers, since they did things by hand on a piece of paper that would be passed down from royalty statement to royalty statement like a revered scroll..  That paper would have rows, and the rows would have the date of the period, the number of copies sold to the end of the period, and then the next row either gave that number followed by the new number, or the number of copies "sold" over the six months which you would add to get the new number, kind of like one of those Scrabble score sheets that comes with the fancier sets.  The first number was always "too early to tell."

There wasn't a lot of mentoring or training at Scott Meredith, so it took me a long time to learn that all these numbers, from all these different publishers, no matter how official looking the sheet of paper was, were utter bullshit.

Why?

Well, the number was the result of an equation, and the equation itself was hidden.

The equation used to generate the number was:

(actual copies net after ship and return) (minus) (reserve against returns) (equals) (your number)

And all we got was (your number), either as a total at the end of the period or as the difference between (your number) in one period and the immediately prior period.

You'd walk into bookstores and see a book all over the place and wonder why (your number) was so small.  Well, (your number) was maybe a half or a quarter of the actual number of books the publisher had put into the marketplace.

A book would come out, not appear to sell, and when you got the second royalty statement (your number) went up.  Not because there were more copies, but because the hidden reserve against returns was reduced by more than the hidden copies shipped less copies returned.

It would take around four royalty periods, or around two years, before the magic number that appeared on the royalty statements was close enough to the actual performance that the statement could be considered reliable.

I got in the habit of calling my debut novelists when their first statements came out to tell them, very excitedly, that I had their first royalty statement, I would be sending it to them, and when they got it they could put it in the trash or use it for toilet paper or do pretty much anything except pay much attention to it because it was utter bullshit.

Now it's different, and we'll move on to that in the next post, tomorrow.

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