PublishingFoundational
Royalties
The author's contractual share of revenue from book sales or licensed rights.
Principle
Royalty language determines how success is converted into author income.
Takeaways
- Rates can differ by format, territory, channel, and sales threshold.
- Royalty payments may not begin until an advance earns out.
- Statements are part of the relationship; understanding them matters.
Overview
Royalties are the author's contractual earnings from sales or licensing after the accounting rules in the contract are applied. They may be calculated on list price, net receipts, or another defined base, and they interact closely with advances, reserves, discounts, and rights grants.
Examples
- Hardcover, paperback, ebook, and audiobook royalties use different rates.
- A royalty escalator increases the percentage after a sales threshold.
- A statement shows that a book has sold well but has not yet earned out.