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The Business of Novelization & Tie-Ins Part One: The Deal

A Question-and-Answer session with some of the top authors writing tie-ins and novelizations today (some of whom, like Keith R.A. DeCandido and Greg Cox, have also worked as editors). For their bios, please visit the About the Authors page.

QUESTION: What’s the price range that a studio charges a publisher to license a TV series tie-in? Does the publisher pay an upfront license fee? Or is it something played out over time and that is linked to sales?

Greg Cox: The price for a license is going to depend on its perceived value. I imagine GUNSMOKE goes a lot cheaper than STAR WARS. Generally, though you pay the licensor for X books at a time. Maybe $80,000 for four books at a time. Then you renegotiate after those four books are concluded.

And usually the license for each book extends for a specified period of time, somewhere between 6-9 years, usually. After that period, you have to renegotiate with the licensor if you want to keep reprinting those books. Usually you’re allowed to sell off whatever you still have in stock, even after the license has expired. And, of course, the licensor gets paid a lot more than the eventual author(s).

QUESTION: How do the royalties typically break down on a tie-in? In other words, what percentage of the sales price of a book goes to the publisher, the studio, the creator of the show, the actor, the writer of the tie-in?

Keith R.A. DeCandido: If the creator of the show or any of the actors get any kind of money for it, that would come out whatever the studio gets from the publisher, and would depend on what the deal the creator and actor(s) have with the studio (which will vary from person to person).

Tie-in authors generally get 1% – 3% of the cover price for royalties, if they get any, as opposed to the 6% – 8% they’d get if it was an original piece.

Greg Cox: Generally, I would budget for an 8% to 10% royalty on a tie-in, with 2% going to the author and 6-8% going to the studio.

QUESTION: What about for gaming-relating tie-ins?

Matt Forbeck: For gaming-related tie-ins, the rates seem to be better. Starting writers get 4-6% of the cover as a royalty, and the top authors presumably get far more.

Gaming publishers often offer new writers a royalty (4-6%) with a modest advance ($4k-6k). On the two novels I’ve had published so far (out of a total of nine contracted and in production), both earned out their advances in the first quarter. My statements show sell-in and have a reserve for returns.

QUESTION: Is it better for an author of a tie-in or novelization to take a flat fee or a royalty (if given a choice)?

Steve Perry: You learn to live on your advances – royalties are considered found money for most writers most of the time. And they ain’t ever gonna tell you how many copies shipped. A hot paperback book will have a sell-through of — correct me, editors, if I’m wrong — 60-70%, and most books not that good. 50% makes most houses happy. So if your royalty sheet comes in and shows that your book sold sixty
thousand copies? They probably shipped twice that many.

That said, I’ve been lucky enough to be connected to a couple books that hit big and earned out the advances — and quite a bit more.

For a lot of people, money in the hand is worth theoretical money down the line, and a big flat fee up front will be more appealing than waiting a year or two for royalties that might not materialize. If you believe the book is going to do well and you have a choice, you might want to risk that for what could be a nice pay out.

Donald Bain: Years ago, my cousin, Jack Pearl, a successful and prolific writer of about 100 books, including tie-ins and novelizations, was offered “Our Man Flint” as a tie-in writing project. He had a choice of a larger advance with no royalties, or a smaller advance with royalties. Like many writers with bills to pay, he chose the bigger bucks up front. The book was immensely successful, and he never again took on a project in which royalties weren’t part of the deal. I’ve opted for money in advance vs. a participation on more than one occasion, most notably when “Coffee, Tea or Me?” was published years ago. Jule Stein and Anita Loos wanted to turn it into a Broadway musical, but Hollywood was dangling bigger option money. I took the cash and ran, and have regretted it ever since. The book was republished last year as a “Penguin Classic,” and I’m working at seeing it end up on the stage.

Question: How common are these cross-collateralization deals in the tie-in world?

Steve Perry: Very. Most houses like to basket-account series because that means they aren’t any money out-of-pocket until the books earn out the total advance. Say you got ten grand each for a three-book series. Thirty K. The first one comes out, and sells pretty well, earns back the advance and another five thousand. The second one does the same. The third one tanks. Accounted on their own, you’d be ten thousand richer. Jointly, you don’t get a penny. A good agent can often wiggle on this one.

Max Allan Collins: Multiple book contracts, it’s been my experience, usually require all the books involved to earn out before royalties are paid — not just in the tie-in world. Wholly beneficial to publishing, not at all to the authors.

Question: What is good sell-through? What is bad sell-through? What is decent sell-through?

Greg Cox: Anything over fifty percent is considered a success, especially with I.D. sell-throughs routinely running in the thirties or forties.

Question: What is an “I.D.” sell-through?

Greg Cox: The term “I.D.” refers to grocery stores, drug stores, airports, train stations, etc. Basically, anything except bookstores. Sadly, you’re talking really high returns rates when it comes to these sort of outlets these days. “Sellthrough” is the opposite of the return rate. If 40% percent of the books are returned, then you have a 60% percent sellthrough, which is pretty good! (And, of course, where mass-market paperbacks are concerned, the books aren’t really “returned.” Only the covers are returned and the rest of the book is pulped.) I once had the ghastly experience of visiting a wholesale book distribution center in Louisiana, which is something that no author should ever see. Imagine a huge, hangar-sized plant with an entire assembly line devoted to the stripping and destruction of paperbook backs. The horror, the horror!

Jeff Mariotte: The ID system is the “independent distribution” system. Also known as wholesalers, or jobbers. They’re a big part of the mass market paperback business and the magazine business. Not as big as they used to be, since they don’t have the accounts for mass merchandisers like Target, Wal-Mart, and KMart, and there seem to be fewer places like 7-11, Circle K and drugstores carrying books. A few of them still rack the top 10 or so, though –usually stocked by the ID along with
the magazines. Some of them carry hardcovers as well, but not as deeply.

I’ve been to many a distribution warehouse in my years as a bookseller. Sometimes it’s very cool because you’ll spot books you had no idea existed. A trip to Bookpeople in Berkeley, for instance, is very enlightening. The more traditional jobber is a big airplane hangar-type building with rows and rows of shelves, those metal ball-bearing wheeled conveyer belts, and lots of cardboard boxes. Drivers take the boxes out, stock the racks, and bring back the returns. Half the space is probably devoted to shredding returned books and magazines and dumping the remains.

If, as an author, you have the opportunity to visit one, take a case of beer or a few dozen donuts with you for the team and you might get better rack placement for a while. There are always a handful of readers working there, but for the most part they are truck drivers and warehouse employees who could as easily be driving laundry routes or anything else. The system is a remnant of prohibition days, after
which the bootleggers had trucks, routes, drivers and warehouses and needed something to do with them. There are still a few old-timers around who remember the days when a grocer could get his fingers broken for buying TV Guide from the wrong source, because his jobber was mob-affiliated and TV Guide was a big seller.

It is a system riddled with ineffiency and waste. But it’s also got some tremendous benefits. The right question isn’t “what is the bookseller’s incentive to sell books?” If the bookseller doesn’t sell books, the doors close. But the returnable system gives the bookseller the very important advantage of TRYING to sell books that might not sell. How many new authors would ever break into print without that? Bookselling can’t be just about selling the “sure things,” but if computers ever completely run our inventory control systems that’s what it will be. Ordering might be more precise, but a million gems would never be published.

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