In traditional publishing, i.e., treeware, a writer will typically get an advance payment against expected royalties for a book sale. Early on as a writer, you learn that most midlist books either don't earn out the advance or barely so, and so you learn to live on the advances. Royalties are gravy: If you get any, it's like free money.
ePub has turned that one around. You don't get an advance, all you get is a royalty on copies sold, and typically, you will sell far fewer copies of an ebook than a paper one. No advertising, and without a track record, people don't know to look for you.
If you have one book out there, unless you are very lucky in the good sense, you won't make all that much. Hits the bestseller lists, you make out really well, but mostly, that won't happen.
If you have fifty books in ebookland and they sell a few copies each every month, you could make a nice living at it, but you won't get that big check up front.
Brings us to shared universes. When you work in those, your royalty percentage will be much smaller than for your own; that's because the pie has to be shared by more people, and as the writer, you are considered least among them. Always.
Publishers know that plenty of people would kill for the chance to see their name on the cover of a Star Trek or Star Wars novel, so finding writers, even pretty good ones, willing to accept a 1% or 2% royalty isn't hard.
Nor is finding writers who will do it for a flat-fee and no royalty.
To compensate for this, the larger players offer a bigger advance. The theory is, it might take years to earn that, and you'll get it up front. So if the deal is, say, fifteen thousand advance against a 2% royalty, versus fifty thousand and no royalty, and you get to choose (which isn't always the case; sometimes it's simply take-it-or-leave-it) then you decide which way makes more sense.
Take the for-sure money and run? Or risk that the book will earn out and pay more over time? If you are just getting into the biz, you should be so lucky as to get this choice.
I've had deals structured both ways, and sometimes I opted to take the bigger advance, sometimes the piece looked like a better shot, albeit would maybe take years to pay off.
Given my choice, if I can see that the potential for big sales is there? I'd usually go for the smaller advance with a piece of the action. I have a certain level of confidence in my ability to deliver a story that, if promoted, will be satisfactory enough to sell a lot of copies. Said confidence coming from having done it a dozen times. I'm not John Locke, but I can muddle along well enough to get by, and I'm willing to take the risk for a far-end pay off.
Here, a pair of hard truths: You don't have to be a very good writer to make the bestseller lists. And you can be a terrific writer and starve. (Musicians and actors and artists will have no trouble understanding this one.)
If a new Star Wars novel comes out, a fair number of people would buy it if the pages were blank, much less written only so-so well. It's true.
A piece of the action makes it more fun for me. Yeah, it's a gamble, but based on something I'm comfortable doing, and if not a sure thing, the odds are a bit better than buying a lottery ticket.
Win some, lose some.
Some years back, when I was hot in the tie-in field, I was approached by the agent of a Major Figure in the biz. He was, I was told, going to start a new universe to add to his already well-known and profitable one, and would I be interested in getting on on the ground floor?
I'd get to come up with characters, storylines, do a bible, pretty much structure the universe, with a bit of help from Major Figure. How would that be?
How would that be? Why wouldn't I be interested?
So, great, what's the deal?
The deal was, nearly as I could tell: Strip, step into the shower, bend over there and fetch me the soap, would you, Steve?
The money would be a flat fee, and less than I was getting on my own stuff. Major Figure's agent poor-mouthed out the wazoo, talking about how broke he was.
Uh huh. Poor MF.
How about this, I countered, I'll take even less than that if I can have a small piece on the back end? Two points? Even one?
No, no, that won't do. Major Figure has gotten short-shrift in the past, so he wants to keep control of this new universe, you can understand that, right?
Um. Well ...
Come on, think about it–you get the thrill, the honor of working directly with Major Figure! You get to flourish the new universe on your resume! Major Figure could, in the future, open doors for you, get you more work! Why wouldn't you leap at such a chance?
Well, is it because I'd do all the work and get none of the gold or glory? Or that Major Figure is coming off as penny-pinching cheapskate when I know he can drive a different Rolls to breakfast every morning next week? That if I go for this indentured slavery deal, I'll only have myself to blame when this kind of attitude expands into all areas of this project?
Working with somebody is not the same as working for them, and everything about this deal screams "Slow Down! Controlling Asshole Ahead in the Road!"
What, do I have "Stupid" tattooed on my forehead? No, thank you, I'll pass. Have a nice life.
Far as I can tell, Major Figure is still doing quite well for himself, but the new universe never got off the ground. I wonder why?
It was an easy choice for me. First, because the nature of the offer carried in it the seeds of disaster; second, because if I as writer have to haul all the freight, I should get paid a decent amount for my labor.
There are, some jobs you don't want to take. Life is too short.
Something to keep in mind.