Designer Diary: Flat Fee vs. Royalties

There are typically one or two offers on the DTRPG discord each week of publishers looking for freelancers. They could be writers, designers, artists, sensitivity readers, or editors. Every aspect of the industry turns up there eventually.

Mostly, the remuneration comes down to one of two models. A flat fee, or royalties.

The smallest publishers like royalties because they don’t always have the cash upfront to pay for work. Royalties for them means that they earn a little less per sale, but don’t have to take any upfront risks.

Bigger publishers (just bigger, not Big) may have a set budget for a project. Maybe they have released enough titles of similar type, that they have a good idea of what their sales will be, at least a ball park figure. Knowing that they can take the gamble by paying a fixed fee, knowing it should be covered, and they will make their money over the longer term.

It is generally true that new products drive sales to your back catalog. They could speculate with what they believe will be the entire 6 month’s earnings, knowing that they are boosting their long tail earnings on everything else.

So which is better?

The flaw with royalties is that sales diminish over time, and quite dramatically, and money loses value over time due to inflation.

The flaw with upfront payments is more to do with the fear of missing out on future earnings if your writing goes on to be a best seller. I blame Arnold Schwartzenegger for this. I think it was the first Terminator movie when he took a smaller fee but wanted a percentage of the box office. Eventually, the share of box office went on to dwarf the stars original fee.

I did a commission for someone on a royalty basis, the title was selling well, a few sales short of Gold within a couple of months, when they pulled the product. When we write for royalties, we do not have control, we are paid per sale and those sales could end.

Which is better? I suspect that the upfront fee is the better option. You have the money, if you want micropayments, just invest it. Which will I choose? Royalties. I don’t play any lotteries, but I still like that idea of one day hitting a jackpot.

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