Q. Is there a commonly accepted schedule of royalty accounting and corresponding royalty payments? My publisher does its accounting only two times a year and sends that accounting and royalties to the author five months after the end of the reporting period.
A. Most trade publishers prepare author royalty statements twice yearly, for the January-June and July-December periods. Most academic publishers generally do their accounting only once a year, which is something that authors of those books should always seek to change to twice yearly when negotiating their contracts. A handful of very small publishers do accountings (and pay royalties) more frequently, some even monthly.
A twice a year accounting and payment schedule is generally considered fair by most publishers and authors. Similarly, sending the royalty statements and paying the required amounts three months after the end of each royalty period is relatively standard and considered reasonable by most publishers and authors. Not paying royalties until the fifth month after the end of the reporting period is outrageous and unfair to authors (and, disappointingly, standard practice for at least one major publisher). Holding an author’s money that long is simply a crass way for a publisher to, in effect, borrow money from an author at zero interest. Publishers that refuse to make royalty payments until 120 days or longer following the end of a reporting period should be embarrassed by the practice and pressured by adverse publicity to change that policy.
(Originally published in the Fall 2006 issue of the Authors Guild Bulletin. © Mark L. Levine)
Answers to questions on this site are general in nature only. You should consult a lawyer for information about a particular situation. For more information about book publishing contracts and issues, see Levine’s new book.
I am negotiating an second edition of my law book for the practitioners market worldwide. My first contract stipulated 10% royalties, but I believe that this is too low. Is this a fair royalty. The book is pioneering, thought specialist and hardback, though there is a provision for paper backs, and I am also interested in knowing if a paperback will generally yiled different royalties.
Typically, paperback royalties are less than hardcover royalties but imho there is no good reason for it. It’s a publishing convention/tradition which publishers will say is justified by the increased costs involved in printing and binding hardcover books and the generally lower prices
charged for paperback books. I’m skeptical; I think it’s primarily a way for publishers to make more money and pay authors less. There are some publishers — though not the major ones — which will pay the same royalties on paperbacks that others pay on hardcovers.
You mention a 10% royalty rate. Is that based on net or list? As you presumably know, there’s a huge difference between the two. Levine has a good explanation of that in his Negotiating a Book Contract book, as well as a section on standard royalty rates for hardcovers and paperbacks.
I hope this is helpful.