Ed here: I've been selling novels for going on thirty years. When I started out I was told by numerous writers that the good old days were gone. If only we'd been able to see how good those "bad" days of the late Seventies, Eighties and Nineties were. Work everywhere and relatively decent advances especially if you tried to make your novels richer and deeper. Here's a letter from Michael Stackpole, science fiction/fantasy writer, about advances today. He's responding to an article about dwindling advances. One surprise for me is that Stackpole considers himself mid-list. I think of him as a best-seller.
I read the article and, while I agree with Ray that I'd like to see the methodology used, things tally with my own experience and with things I've been told by other authors.
I may be naive, but I've seen domestic advances drop by 66% for original work—this coming while my original work is still being reprinted (or was, at the time of the last offer :) ). For tie-in work the prices offered to me have remained steady. Low, but steady, and the difference between them and mainstream contracts has shrunk significantly.
I may be fooling myself, but I put the reduction down to two factors.
1) With overall sales trending down, publishers have no way to value a contract for a trilogy over its life—a life which they have to project out over 3-5 years. They can't guarantee they'll make money offering a decent advance to a mid-list author like myself.
2) Concomitantly, since the advance they'd offer me for a novel would buy a dozen first novels, and one or two of them might hit, they spread the risk around.
Of course, investing in a known quantity and doubling down on that investment with promotion would seem to be a prudent strategy. When you're extremely risk adverse and in what you see as a hostile environment, the wisdom of this approach is discounted.
This puts me in the curious position, then, of taking more work for less pay, but work which has targeted and dedicated audiences. That raises my profile and exposes me to new readers, who then look for more books, and get to tag my digital backlist. The digital backlist subsidizes both the tie-in work, and gives me the time to generate digital original work.
Lordy, what a weird business we're in.