Books not recouping their advances is definitely a thing. With a traditionally published book an author makes their money off royalties which is a few percentag

Books not recouping their advances is definitely a thing. With a traditionally published book an author makes their money off royalties which is a few percentage points of the price of the book. The percentages are different for the various formats of the book, a hard cover has different rates than a paperback or eBook. The advance is paid out of the author's royalties for the book. If an author is making a dollar per sale, they'll need 5,000 sales to cover a $5,000 advance before they actually see any additional money from the book. Audiobooks and foreign translations are their own kettle of fish and don't tend to count towards sales to pay down the advance. Sometimes even eBooks don't count towards "sales" to pay down the advance but that is typically older pre-eBook contracts. If an author publishes multiple books with the same publisher each book will have its own advance and sales tracked. A new edition will often come with its own advance but have its sales tracked separately from previous editions. Sales of Book A have no effect on the royalties for Book B. The upside for an author is an advance is a bet on the part of the publisher. So long as the author doesn't break their contract by missing a deadline or not doing the work, they don't have to pay back the publisher's advance (conditions will be in the contract). An author that has an unsuccessful book won't typically end up owing the publisher their advance even if their sales never actually manage to pay it back. For publishers, unless the author totally screws them over, aren't really positioned to lose money on an advance. The blockbusters make them enough money to farm potential blockbusters with other authors. They have lots of ways to get rid of low demand books including just writing them down as a loss so they'll break even on the advance. They're also not going to pay out huge advances to an author with no history or no apparent demand. Source: I know a bunch of people that have published books.