huge long article on the state of publishing.
NY Magazine: Have we reached the end of book publishing as we know it?
Lately, the whole, hoary concept of paying writers advances against royalties has come under question. Following their down payments to authors, publishers don’t have to pay a cent in royalties, which are usually 15 percent of the hardcover price, 7.5 for paperbacks, until that signing bonus is earned back. The system is supposed to be mutually beneficial; the publishers guarantee writers a certain income, and then both parties share in the proceeds beyond that level. But it only works for publishers if they’re conservative in their expectations. As auctions over hot books have grown more frequent, prudence has gone out the window— paying a $1 million advance to a 26-year-old first-time novelist becomes a public-relations gambit as much as an investment in that writer’s futureIn particular, note this:
That money has to come from somewhere, so publishers have cracked down on their non-star writers. The advances you don’t hear about have been dropping precipitously. For every Pretty Young Debut Novelist who snags that seven-figure prize, ten solid literary novelists have seen advances slashed for their third books.
The remaindering and shredding of books—a cost borne largely by the publisher—is a relic of a consignment model developed during the Depression that makes no modern sense.