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. Last Updated: 07/27/2016

Regarding Royalties

I hope that my readers will forgive me if I transform this week's column into a balance sheet. It is just that, since the scandal broke concerning the $450,000 publishing advance reportedly paid to Deputy Prime Minister Anatoly Chubais and four of his colleagues for a book about Russia's privatization program, I have been asked repeatedly to explain how publishing contracts operate in this country. Was this advance realistic or was it, in the words of the chief author himself, "a little bit too high?"

Until the late 1980s publishing was a very uncomplicated affair because no royalties were paid in the Soviet Union. Publishers calculated a one-off payment to authors by multiplying the number of pages by the ministry-defined rate for the type of book.

For example, a book by an unknown author might earn 10 rubles a page, while one by an acknowledged literary giant might receive 50 rubles. Initial print runs were high, but good books were always in demand and the Soviet Union was able to boast that it was the leading nation of readers in the world.

But times have changed. The average initial (and in most cases final) print run is between 5,000 and 10,000 copies. A Western system of royalties has been adopted (usually 10 percent of the cost price) and an author's advance is equal to the sum of royalties from the first print run. The average book now costs $2 to $3 to make, but it will sell for up to $5 on the street.

So now to our sums.

Example A: An illustrated memoir of artistic Moscow. 10,000 copies are printed at a cost price of $2.50 each. The author's advance is $2,500.

Example B: A paperback "Russki Triller," by a well-known writer. One-hundred thousand copies retail at $1.50 although the books cost $1 a copy to produce. The author receives $10,000.

Example C: A scandalous insider's account of life in the Kremlin. The first print run of this hardcover stands at 50,000. But the author is able to negotiate an inflated advance based on a print run of 100,000. The book costs $5 to produce and the advance is a generous $50,000.