Royalties and Profit Shares If you missed any part of our series, be sure to catch-up here:
Whenever we enter into co-author agreements, our very first real question usually involves royalties. How are we going to split them up? I want to be dealt with fairly and I don’t want to be run over.
Why is that our natural response?
Because we’ve been on the receiving end of a bad group projects before. They might not have been in the author world, but they were still not fun experiences. People like us get screwed over regularly.
The best way to not get hosed is to be informed. To do that, we need a better understanding of all the things that need to be done. Understand that this article skims the top of some pretty big ideas. If you want to go more in-depth on any of this, please let me know. I’ve provided the information needed for this discussion, a worksheet, and two videos to help you determine what a fair royalty split should be.
Who’s Doing What? It’s easy to think that the hardest part of producing a book is writing it but that, frankly, is the easy part. Below is a list of (19) things that need to be done with each book:
- Create budget
- Create schedule
- Draft contracts/agreement
- Write Draft Suck
- Read through and refine to Draft Sucks Less
- Alter from line edits
- Alter from proofs
- Cover – ebook and paperback
- File for copyright
- File for ISBN
- Websites – create and update
- Create blurb
- Upload book to sites
- Create marketing plan
- Create marketing content – emails, posts, graphics
How Much Time Is Each Author Committing To?
Now it’s time to take a look at roles and partnerships to determine schedule because royalties are put in place to ensure your time is properly compensated. Take a look at the list and divvie it out according to your strengths, weaknesses, and fairness to both sides.
Lead Author – The lead author is the one who is going to provide the lead creative investment. A lot of it could be done before word one is even written. This person could do the lioness’s share of the world-building, character development, and outlining, not just the writing.
Book Owner – Book owners have created their publishing platform and publishing house. They’ll take the bigger management investment. They’ll do a lot of the back-end stuff like handling budgets, schedules, uploading, ISBN assignments, etcetera.
Weakness Manager – Weakness managers are not editors. They’re authors who typically hate writing, but love tweaking what’s already been written in a creative way. They provide the creative finesse investment. My weaknesses managers will sometimes invest more time in the creation of the book than I do because it takes more time for them to read, re-read, re-re-read, tweak, massage, re-re-re-read, and move on.
Co-author – Co-authors are authors who aren’t lead, but who provide content creation investment, which gives the lead author a little breathing room when needed.
Contributor – These are the contractors who provide the time investment to help you along. Time is the one resource you lack the most in a lot of cases, and contributors help with that.
Headliner – Headliners bring a wealth of experience to the plate. They provide the experience investment in whatever methods works best for the team.
Making Sense of Percentages
It’s hard to see clearly how any of this is going to work out to hard numbers. I’ve created a co-author royalty calculator to help get the conversation started. Going into the calculator, you just need to assess who is fulfilling what roles, and who is taking which tasks. First of all, to make this easier, download my royalty calculator.
Then, take a look at the video to help you go through the calculator and how it works.
As you can see, the calculator is a great starting point and is a great tool to get the conversation started. If you were able to watch the video, you saw how I was able to take one type of partnership, assign the percentages to each task, and come up with the royalty split.
For those who didn’t, simply open the worksheet. Fill in the percentages that coincide with the roles you’re divvying out. Once you’ve done that, you’ll have your royalty split starting negotiating point.
WRITER AND WEAKNESS MANAGER
In the video, I used this as an example:
Publisher is the book owner/publisher.
Author A is the lead author and marketing manager.
Author B is the weakness manager and the marketing assistant.
The term marketing assistant came out as my co-author and I were discussing the project and were determining some of the ways we could split up the tasks to make it a bit more fair to both of us.
We determined that Author A would invest 60% of the book writing time to writing the first draft. Author B would then be investing 40% in the creating/finessing of the first, second, and third drafts.
That’s just the creation of the actual book, though. That’s (5) out of (19) checkboxes.
So, after we assessed how much time was needed to complete the other tasks, we ultimately determined that Author A would be investing around 35% of the overall book production time while Author B would be investing approximately 27% of the overall book production time on this portion of the process.
Creating the book is one piece of the puzzle, but it’s only a piece. In this case, your royalty split could be 15% to the publishing house, 49% to the lead author, and 36% to the weakness manager.
CHAPTER TO CHAPTER
In a chapter to chapter scenario, the book creation portion is 50/50. It really is split down the middle. In this case, it’s conceivable that one person would take the line edit clean-up while the other person took the proofread clean-up. Then, those (5) checkboxes for book creation would be 50/50.
However, you still have to determine who’s doing the other (14) checkboxes.
Let’s make things easy, though. Let’s go into our calculator and keep the previous example. I’m the publisher and marketing manager, and my husband is the marketing assistant. We’re each doing 50% of the book production. Let’s see what our royalty split would be.
In this case, your royalty split could be 15% to the publishing house, 44% to the Author A, and 41% to the Author B.
SCENE TO SCENE
In the scene-to-scene partnership, you need an outline to determine how much each author is going to be writing. My husband and I have already done this on one of our future projects. He’s taking 40% of the scenes and I’m taking 60% of the scenes.
Remember that this 60/40 only applies to the creation of the initial draft. It only applies to that one checkbox. Let’s run that in our calculator really quick.
In this case, your royalty split could be 15% to the publishing house, 49% to the Author A, and 36% to the Author B.
Here is another quick video to show you how to easily do this without going too deep into voodoo math.
In the lead swap, you’d simply take what you did in the first scenario and switch it per book. Conclusion It’s important to not overly complicate things when determining your royalty. It’s also important to realize the reality of your royalty situation so that you understand what “fair” really means.
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