Business: How Do Writers Get Paid?

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While we all became story tellers because we had something in our hearts we want to share, there are a lot of us writers who also want to turn this into a career.  There are likely lots of you dreaming of massive advances and comfortable (if not Rowling-levels) of wealth, so let's break down where that money is actually going to be coming from.

Buying and Selling

Firstly, some clarification about what happens to your intellectual property (hereafter "IP") when you exchange money for the right to print it.

At no point - unless you specifically sign a contract stating so explicitly - do you loose control or ownership of your IP. While we use terms like "buying" and "selling", it's more appropriate to call it "leasing" your story. In Canada, you own the copyright to your IP the moment you put pen to paper. In the USA, you have to register copyright to the IP. I'm not sure about other countries, but take a look at what your local copyright laws are, and if a guild or union offers discounted registry services.

A publisher pays you for the right to publish your IP (usually presented as a completed manuscript), in specific format(s), on the understanding that you are contractually bound and may not give another publisher the right to do the same. This includes posting it yourself on your website, or on story sharing platforms like Wattpad.

In return for this right, the publisher uses all of their own money to create the product (i.e. a "book", an "ebook", or an "audiobook"), and gives you, the author, some money in return for this lease. This money will come in the form of an outright payment, or a royalty - more on that later.

If you or the publisher elect to do so, you may terminate your relationship prior to the product being created (in which case you'll likely have to give them back some or all of the money they gave you), after the publication of the product (in which case, you may have to pay them for the right to take your IP back and let another publisher use it, depending on what's in the sunset clause in your contract), or, there maybe a natural end date in the contract (which means you get to keep all your money and get back the right to lease your IP elsewhere).

It's very common for short stories to have a One Year From Publication end date: you the author get the right to take your story and publish it elsewhere only after one year from the first publication of the story. Sometimes novel contracts have this too - there's a four-year end date on my fantasy novel series. #1 and #2 have actually expired, so I can take them elsewhere at this point if I like without owing my publisher any money. But novels #3 and #4 haven't expired yet, so I'm allowing the publisher to keep publishing (and making money) from #1 and #2 at this time. And of course, I still get royalties for those sales. 

Some contracts don't have expiry dates, and instead have sunset clauses by which the author may request thier rights back if the publisher breaks another clause, or if there are very limited sales of the book, or just if both parties choose to part ways. But in all likelihood, if you've signed with a professional publisher - and especially if they're one of the Big Five - then you'll have no expiration date and no reason to invoke the sunset clause, and so your book will continue to be available ad infinitum, and you'll keep getting paid for as long as copies sell.

The #1 rule of publishing is this: Money should always flow toward the author, never away.

And speaking of money...

Per Word

In the world of short stories, you get paid for your story in one of two ways - per word, or per story as a whole. The Science Fiction Writer's Association has set the current market rate for short stories at eight cents per word. That doesn't seem like a lot, but that means a 5k story would be worth $400. Professional Markets must pay at minimum eight cents per word to be considered so by SFWA. 

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