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December 1, 2020

ASA Survey Results – Advances & Royalties

Following our news on the perilously low average author incomes in Australia, this week we continue our series of articles on the 2020 ASA Survey results with a report on author advances and royalties.

Advances 

For the majority of authors, advances are not paid and, where they are paid, they continue to be low. 

In this year’s survey when asking respondents about the advances they’ve received, we expanded the payment brackets to better understand how many respondents were receiving under $5,000. Alarmingly, 51.99% of respondents indicated they received no advance for their work, and a further 23.89% received an advance between $1 and $4,999.

When we conducted this survey in 2017, 28% of respondents indicated they received an advance under $2,000 – in 2020, it is 65% of respondents, an increase of 132%.

We also asked: If you received an advance, did you earn it out? 46.5% of respondents indicated they did not earn out their advance, highlighting the high-risk nature of publishing and also the double-edged sword of advances, given that if you don’t earn out your advance, you are often unlikely to attract a subsequent publishing offer.  

Given the number of authors not receiving an advance and the fact that the author is also the last person in the supply chain to be paid, and can wait more than two years from the delivery of their manuscript to their first royalty payment, it is evident that authors are increasingly self-funding while writing their books. This is a significant barrier to entry into publishing; being able to afford the time to write and manage the time-lag between labour and payment.

The lack of advances highlights the need for alternative means of support for writers, particularly in the early stages of their careers. As has been made clear in many submissions to the Federal Inquiry into Australia’s Creative and Cultural Industries and Institutions, early investment or “seed money” is essential to allow writers time to think and to write and to start to build a backlist.

Author Holden Sheppard said, “I received an ArtStart Grant of $10,000 from the Australia Council about 5 years ago. You had to have a University degree in a creative course to qualify. The purpose of the grant was to establish you as a business, as an artist. 

I paid for my ASA membership with that grant. I paid for a mentorship through the ASA with that grant. I couldn’t have afforded the membership fee or the cost of an experienced mentor without it. That mentorship was instrumental in making my work publishable. I paid for workshops and seminars with that grant to learn about the industry, who the players were, publishers, agents, how it all works.

Five years down the track, I have a writing career. And it all started with that grant. Young writers need two things: recognition as having the potential to write professionally and seed money to begin.”

Royalties 
We surveyed creators to find out if they are paid a rising royalty in any of their current publishing agreements, a rising royalty being one that increases once certain sales thresholds are achieved. 48.7% of respondents indicated they were not paid rising royalties, and a further 19.1% indicated they were unsure. 

Olivia Lanchester, ASA CEO, says: “The number of authors who are not paid rising royalties is disappointing given that the publisher may determine the threshold at which the higher royalty kicks in, and based on Nielsen data, we know how rarely these thresholds are achieved. There is no reason why rising royalties should not be included in every publishing agreement across the board, allowing authors to more fairly enjoy the upside of a runaway success.”

There is also a wide variation in the quality of royalty statements issued by publishers, with some being excellent and some being deficient in information. We asked: Does your royalty statement make sense to you? 28.3% of respondents reported having some understanding of their royalty statement, and 15.6% indicated they did not understand it. As small business operators, understanding royalty accounting is crucial for authors. We will offer additional professional development in 2021 on demystifying your royalty statement, and continue a dialogue with the Australian Publishing Association on acceptable royalty reporting standards.  

When surveying the impact of COVID-19 we asked respondents to compare their royalty statements from 2019 to 2020 to ascertain whether their royalties have increased, decreased or stayed the same. Of those who received royalties during these periods, 18.12% of respondents reported an increase in royalties, 43.27% reported their royalties stayed the same, and 38.59% reported a decrease in royalties. Our conclusion is that the impact of COVID has been varied among writers. Some authors have reported strong backlist sales, while others are despairing about the quiet demise of a book launched in a year where promotional opportunities were extremely limited. Unsurprisingly, royalties have held up better than income from events, which has been seriously impacted by COVID, as reported in our previous article.

The results we’ve obtained from this survey further underscore the challenges authors face in making a living in Australia. It is clear: without an overhaul in the way the Government supports and invests in authors, the sustainability of writing careers is under threat. You can read our proposals to Government for ensuring a sustainable future for Australian authors in our submission to the Federal Inquiry here.