The Writer's Corner: The Wandering Ways of Your Wages
Everyone talks about how the publishing industry is changing — and it is. Today, I am thinking about the flow of money, particularly where it flows, to whom, and in what order. Most professional novelists have an agent who is part of that flow.
Under the original model, agents handle all aspects of the business and financial side of things. It is written into the contract that 100% of all money earned from the sale of a book will go directly to the agent. So, all advance and royalty checks are received by the agent, who then cashes these checks, keeps 15%, and sends the novelist his/her 85%.
Some agents are timely in this, but some are not. Some don't mind a phone call if a writer's share is three weeks late, in which the writer asks, “Has my signing advance arrived at the office yet?” Some agents don't like these calls at all and may not even return them.
The agent is also responsible for making copies of royalty statements and forwarding these to the writer. At the end of the year, the agent sends the writer a MISC form with a grand total of all money earned that year for filing taxes.
You can see that writers trust their agents in good faith with a great deal of financial responsibility. It seems that of late, writers are becoming less and less willing to turn over such complete financial control to their agents, and I don't see this movement as a bad thing.
Around the beginning of the e-self-publishing boom / bubble (sometimes referred to as "indie" publishing, which is slightly different), I began noticing more and more novelists who work with professional New York publishers arranging for something called "separate accounting" in their contracts. Under this model, the publisher's accounting department splits all advances and subsequent royalties earned and sends the agent 15% and the writer 85%. The writer also receives copies of royalty statements directly, and the publisher's accounting department sends the MISC form directly to the writer at the end of the year.
JC and I functioned under the old model for about ten years, and for us it worked fine. Once we started doing both (meaning e-self-publishing and working with a professional publishing house), we started feeling a need for more control. As a result, we actually went through the grueling process of having all our old contracts revised to allow for separate accounting.
We're still using an agent, but now, copies of our royalty statements and our 85% cut of advances and royalties earned come directly to us. I cannot tell you how much I prefer this system.
With our e-self-publishing for “Tales from the world of the Noble Dead Saga,” we did not use an ebook aggregator like Smashwords. J.C. does our covers, compiles and codes all other book content, and uploads and catalogs these works at Amazon, B&N, Kobo, and Apple through these vendors’ online direct publisher portals. He set up accounting at all four so that royalty payments are directly deposited into our checking account. Again… any money earned comes directly to us no matter where sales occur around the globe.
This topic was just on my mind today. J.C. and I still earn the monster’s share of our income via our traditional publisher, and we still have an agent. But like many of our peers, we are taking more control over the flow of our profits. I think this penchant will continue as we all move ahead into the future of publishing.
So, to new writers out there who 1) sell their first novel to a professional publishing house and 2) are using an agent, make certain you set up separate accounting from the onset. Be firm about this and continue the practice throughout your career. It is not an issue of trust in your agent; it is simply that you should have control of your own wages in all ways.