There's been an interesting discussion over at the Smart Bitches about advances. Jeri said, "IMO, instead of complaining that HQ and other print publishers are giving lousy royalty rates, we ought to be complaining that e-publishers still won’t pay their authors upfront."
I responded, "Advances exist because of the long waits in New York publishing. A major publisher signs you, then you wait twelve to eighteen months to see the book released. After that, it’s still at least six months before you start seeing royalties... Conversely, I can sell a book to an e-publisher, get it on the market, and get paid in a matter of a few months."
Booksquare chimed in with some interesting observations: "Ebook publishers have a different distribution stream—no physical inventory, no extensive out-of-pocket costs (manufacturing, shipping). They collect directly from the consumer in many cases. In other cases, there’s a more streamlined process (no physical returns to accrue, release, etc) for distributing money. That being said, I wouldn’t be surprised if more financially successful epublishers start offering advances to entice top notch talent."
Over at her own blog, Shannon had this extremely salient insight: "let’s say that the publisher is pressured into offering advances. Now, every time they accept a submission they have to cough up some money. That means they need a pool to draw from. How do you get a pool? You dam up the river. Now the publisher gets the money from the reader and can’t give it to the writer immediately. They’ll disburse from the pool maybe four times, but more likely only twice, per year."
Shannon's observation is brilliant. Yes, epubs could probably pay advances (although as I said in another comment, earnings tend not to be consistent, so it's difficult for them to know exactly what they should pay), but it would totally change the way epubs do business. If they pay you a large chunk of cash up front, they have to get that money from somewhere, which would mean waving goodbye to those monthly or quarterly payments we e-pubbed authors love.
I'd add that paying advances shouldn't have too much effect on earnings long-term. Advances are paid against royalties, which means the writer either gets her earnings up front, or later. It's still the same amount of money, and it's not "money for nothing"-- it's the same money, earned by the author's sales. The only problem might occur if an epub pays too many advances that aren't earned out. Bigger publishers have enough cash to pay for a certain number of misjudgments. Small publishers don't. Too many big advances that aren't earned out will lead to bankruptcy on the part of the publisher.
Karen Templeton added a valid comment to Shannon's blog: "While what you say about advances not being as much of an issue for e-books both because the books become available more quickly and you get paid more regularly than most print publishers, that does make sense. . .to a certain extent. One of the nice things about advances is that they do provide at least some income while you’re writing the book (once you start selling on proposal). If it only takes a writer a few weeks to write a book, it’s probably not much of an issue; if it takes you six months, it might be. Just something to think about."
Advances are also very handy things to have when you want to pay for a lot of advertising up front. I bought a full-page color ad in RT and a cover ad on Affaire de Couer with my advance for The Light in the Darkness. I can't do as much advance advertising for my ebooks, and couldn't even if they made me as much money as my New York-pubbed book did, at least not without dipping into my savings.
I think we all want what's best for authors (since we are, after all, what keeps the publishing industry in business!). But is asking e-pubs to pay advances good for the e-publishing industry, and by extension those of us that write for e-publishers? I don't know. It would surely have a drastic effect on the way e-publishers do business. Like Shannon, my feeling is that if it ain't broke, why fix it?