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July 25, 2022

Everything you need to know about Royalties-based payment structures

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  1. How payment structures for journalism works now
  2. How some publications are doing it differently
  3. A 60/40 split for contributors and it’s value for community building
  4. What do the journalists want?
  5. The future of structured payments for freelancers

An informal survey of creative freelance friends and colleagues found that agreeing rates and getting paid by clients is the consistent number one challenge. Many of us spend an inordinate amount of time just trying to get paid. With rates stagnant, if not declining, it is a frustrating pattern.

The payment structure for freelance writers seems to have remained the same for the last 20 years – a pay per word system, generally sitting around 35p, or £350 per 1,000 words – if anything, rates have declined on some publications.

A quick scan of the National Union of Journalist reported pay register, throws up rates varying wildly, from as low as £57 to £2,500 (both quoted from 2021 reports).

This system doesn’t make much sense to everybody. “I’ve never really understood the rate per word system,” says John Thompson, managing director of Mousetrap Media, the publisher of journalism.co.uk. “It makes more sense for a fee to be based on time spent researching and writing the article. And quality not quantity ought to be the guiding measure.”

Now, in the name of financial sustainability, some publications are introducing new payment structures. One of these is Potluck, an independent magazine about cooking, eating and sharing food, aimed at home cooks.

Founder and editor Rhia Cook started Potluck in May 2020 as a lockdown project during the pandemic. Launching the magazine was a real passion project. “I have always enjoyed cooking and been in the kitchen but never professionally,” she explains.

She quit her job three weeks before the pandemic. “I studied textile design at university and I always wanted to do something creative for work, so my idea was to take a few months off from work to figure out what I would do and the lockdown gave me the time to work that out,” she says.

The magazine is self-funded, and Cook is pouring her own money into it. Because of this, she had to find a sustainable way to run it and eventually landed on a royalties structure.

Of all the sales generated from each edition 40% go back to contributors – the magazine sells for £10 and £4 of every issue goes to contributors. The more copies are sold, the more money contributors make. The first batch of royalties are paid a few weeks after publication and then every six months after that.

From each edition, £3 out of £10 covers costs and the remaining income is saved towards future projects.

For contributors, it could ultimately be lucrative if work they produce gains traction. “Freelance journalist Jamie Fullerton recalls a longform feature he wrote for BuzzFeed in the past which went semi-viral and got millions of views. “A pay by view format for that one would have been nice,” he says. “So, I guess if a writer lucked out and the issue their stuff was in sold millions of copies then it would work very well for them.”

Fullerton has not previously come across a royalties-based payment structure and is reluctant to pass judgement. “If a model like that was being used for a more traditional outlet’s freelance structure, I’d be suspicious about why it’s being used – but I have never heard of it being used or even suggested,” he says. “Most print publications tend to sell similar amounts of copies issue by issue, so the fee would be unlikely to vary much issue by issue, so I can’t see why it’d be used.”

He acknowledges that it may be suited for a more niche publication – such as Potluck. “It seems to make sense for publications that have little money and uncertainty about sales,” he says.

For Cook, the model is based around managing responsibly and transparently. “We are not paying money that we don’t have, and everyone is paid the same,” says Cook.

“I have always been a bit worried about it because I know that I don’t pay as much as other magazines, but contributors are generally fine about it as I have been very transparent.”

She says many of the contributors are writing for a magazine for the first time and could see Potluck as an opportunity to get work published.

For Olivia Preston, a newly qualified journalist, the model does hold some appeal. “This sounds like a good model however with the payment being based on sales”, she says, but notes that she “would be anxious to know when I would be paid and how much,” she says. “I like security and feel like the pay may cause issues with people who want concrete numbers.”

Of course, advertising would provide a way to bring in more money and pay contributors more. “It could be done in a way that fits with Potluck but at the moment I have complete control over what goes into the magazine and a lot of what we publish is very honest: bringing in advertising might change that,” she says.

Before launching the magazine, she did some research among potential writers – “I asked what the motivation for them to write for a magazine would be and money came last on their list of priorities,” she says.

And the ambitions behind Potluck go beyond the business. “We are building a community around the magazine and when you contribute you are part of the common project,” concludes Cook.

Considering that everybody got paid just £21 in a previous edition, the pull of being part of a community – and getting work in print – has to be pretty strong.

The community building element is likely to chime with some contributors. “I think I would take part in such a project, but of course I would have to balance this with other better paying work,” says Preston.

The emergence of new models and ways to pay freelancers, does raise the question about the suitability of current payment structures for freelancers. Is it time to think in different ways and what would work for writers?

Getting the basics right will work for starters, says Fullerton. “Pay freelancers proper professional rates, reasonable expenses, and pay them on time,” he says. “One national newspaper I wrote for hasn’t raised its word rate since I started writing for them, nearly a decade ago. Some pay less than 200 quid for a full feature. I recently did home news shifts for one of the biggest newspaper brands for £130 a day (before tax).

He acknowledges that advertising money has declined for publications, “but most of these brands are profitable, so it’s frustrating that the rates are so often out of skew with what’s fair for the work and skills sets they demand. Same gripes most freelance writers would have these day though, I’d guess,” he concludes.

Whether or not this becomes a consistent form of payment for journalists, it’s 2022. Perhaps it’s time for us to reconsider the ways that payments are handled for freelancers.

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