Is the Author Solutions Acquisition a Good Thing for Authors?


By

Author Solutions and Pearson

Yesterday, news broke that Pearson (parent company of Penguin) had acquired Author Solutions for $116 million. Read the basics here.

Just to make sure we’re all up to speed:

  • Pearson is one of the Big Six publishers.
  • Author Solutions (ASI) is the world’s leading provider of self-publishing services, primarily dealing in print-on-demand (POD) publishing and related service packages.

As the guy who filmed the double rainbow said: “What does it mean?”

Some writers have reacted to the news by saying, “This means self-publishing is the future!”

This is a misunderstanding of Author Solutions on a variety of levels, as well as what Pearson might have to gain from acquiring them. Two-thirds of Author Solutions’ revenue comes from selling services to authors—not from selling books.

Saying that this is the future is kind of like saying: “Authors paying hundreds and thousands of dollars to publish a book that never sells more than 100 copies is the future! Yay!”

This is how confused writers are.

But I know what they’re thinking. They see self-publishing in terms of all those success stories you hear about in the media—like JA Konrath, Amanda Hocking, and John Locke.

Well, I challenge you to find one of these phenoms that used Author Solutions as a service provider. Rather, the self-publishing authors making big bucks are folks primarily using Amazon KDP or related “free” services. In March 2011, I wrote a column for Writer Unboxed, pointing this out, and predicting that POD services, of the type that Author Solutions specializes in, had reached their peak. (Click here to read that post.)

Let’s assume for a moment that my article was correct. Why would a Big Six company invest in a service whose time has already come and gone—especially given that it’s like falling off a log to publish your (electronic) book these days, and that’s what all the publicized success stories focus on. Go publish through Amazon and make a fortune!

Laura Dawson writes that the acquisition is connected to Book Country, the Penguin online community for writers. Acquiring ASI means acquiring a back-end/infrastructure to help monetize that community. But if my theory is correct, then there’s limited money to be made specifically in POD/print services. So Pearson may be looking to grow related paid services to writers that aren’t about POD. (This could include editorial, design, marketing, and promotion services, which ASI also provides.)

That would mean: Self-publishing isn’t exactly the future here. It’s rather making money off a growing number of people who are writing and seeking professional publishing services. As easy as it is to e-publish, it’s not a straightforward matter to navigate the options and produce a professional product that actually sells. Thus, there’s no shortage of people seeking assistance with DIY self-publishing, whether in print or electronic formats. Unfortunately, many people seeking help are not well-informed, don’t have the patience to research their options, and end up writing a big check to someone to make the headache go away. (And by doing so, they’ve assured their sales will be exactly the number of family and friends they can convince to buy their poorly edited, poorly designed book via Facebook wall postings.)

In short: Publishing ain’t for sissies, and no one likes sorting through the mess that is the current industry. That describes a big part of ASI’s business model, though I believe authors are becoming more well-informed every day.

Perhaps the Book Country or Penguin name will be (more) successful in providing services than ASI was, and in improving ASI’s reputation for such services. I have the same thoughts as Victoria Strauss at WriterBeware in this regard. Specifically, I might be convinced into thinking it’s a smart acquisition IF:

  • They’re sincere and transparent in their dealings with writers, especially about what it means to self-publish, and what is possible.
  • Pearson adds their expertise in print distribution and traditional book publishing practices (particularly sales and marketing) to improve overall services.
  • They offer training or services that have true value and aren’t dubious (eliminate stuff like the $20,000 Hollywood trailer).
  • To authors jumping on the e-publishing trend, they offer professional services that are complementary to services that already exist. What I love so much about existing e-publishing services—whether BookBaby, Smashwords, Amazon KDP, B&N Nook Press, or others—is that they are nonexclusive (you can use them in coordination with one another), and they honestly compete on royalty rates. I think Pearson/ASI can work best if they’re offering professional services that help authors amplify their success on existing channels (or somehow extend their distribution). It seems unlikely they can effectively compete with Amazon, unless it’s by offering misleading royalty rates and gotcha clauses. (That’s what ASI’s BookTango did for a while.)

I have little faith, though. This is a for-profit venture, not charity. And it seems unlikely that Pearson would meaningfully change any business practices that made ASI profitable in the first place. Corporations too often take the short-term view, and milk acquisitions dry, rather than take a long-term view.

But here’s another wrinkle: If you didn’t know, a growing part of ASI’s business since roughly 2009 has been establishing white-label services. Thomas Nelson, Harlequin, Hay House, and even my former employer, Writer’s Digest, ended up striking deals with ASI to offer paid publishing services you might know better as WestBow, DellArte, Balboa, and Abbott Press. But those traditional publishers aren’t fulfilling those services; ASI is. The publishers selling the service are extending their brands, their customers, and their marketing power—and receiving a nice chunk of the profit in return. (I want to note here that I left Writer’s Digest before Abbott Press was formed; I was against the idea.)

Check out this big visual at the Author Solutions corporate website:

Author Solutions publishing partnerships

I’m sad to say I’ve heard publishing executives talk about the opportunity to “monetize unpublished manuscripts” and it’s why I left commercial publishing. Is this where the industry is headed? If so, I want no part of its future.

But what do you think the endgame is?

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  • http://twitter.com/MJRose MJRose

    Great analysis Jane – and I am so with you on the need to change the predatory practices of ASI – those huge packages $20,000 on a trailer! I hear from those authors after they’ve spend crazy money with ASI and got no sales – and have no money left to do smart editing etc and are heartbroken they believed.

  • http://www.davidhewson.com David Hewson

    So really is this the publishing industry moving from a model in which it pays authors to one in which authors (mainly would-be ones) pay them? Watching some UK publishers now cannibalise their own best-selling authors by putting their ebooks out for 20p (15 cents) here I wonder if any of these people have much of a clue where they’re headed, and trying to take the rest of us.

  • http://twitter.com/jimhamlett Jim Hamlett

    Jane,
    Looks like moving to Virginia hasn’t dulled your grasp of things. (I knew it wouldn’t. Being from VA, I suspected you’d only get better).

    When the PW email arrived with this news, I had very similar thoughts. At the end of this past academic year, I spoke to a group of college students and faculty about my journey so far into self publishing. I read somewhere that this is a 4 billion dollar annual industry. No publisher who already has the infrastructure in place is going to pass up an opportunity to tap into that revenue stream.

    Among other points, I made these to the crowd: They (the POD supplier) is in business to make money; they will make it before you do; afterwards, they don’t care if you make any. The POD route is not the best avenue if you intend to retail your book. Retailing (hard copies) requires that you behave like every other publisher. Consequently, (as you point out so well), this is not for sissies.

    Publishing on your own is really, really, really hard. It requires unshakable perseverance. And while I’m not anywhere near the level of success most folks envision, I have not lost the vision. It helps to have a cause much larger than yourself.

    Thanks again for your keen insights.

    Jim H.
    http://gracefulword.com

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  • http://twitter.com/malenalott Malena Lott

    Well said as usual. One of the first questions people ask me about my small press, Buzz Books, is how much we charge authors to publish their books. They seem surprised that we don’t. That being said, it puts us in the same boat with needing a book to break out to make a lot of money on it. Or the Amazon algorithm to kick in. And the retreat we are putting on this weekend will equal our sales revenue for last month so those may be necessary to supplement our venture – and of course get to meet new talent, too. I’m enjoying figuring out what’s next, though.
    Thanks for keeping us informed and making us think.
    Malena
    Buzzbooksusa.com

  • http://twitter.com/malenalott Malena Lott

    MJ, i nearly fell off my chair when I saw that trailer package. I hoped no one would buy it!

  • Marian

    Well said Jane. Personally I couldn’t see the difference between this new business model seeking to “help” a writer self publish from the vanity press business model. For me your article is proof I was not being delusional. Better to be brave and slog through the muck and mire of self publishing and gain your just rewards than to let others benefit unfairly from your creative hard work.

  • Charlene Bell Dietz

    Your knowledge and expertise on this is invaluable to me. I’ve grumbled the seven plus years while preparing a manuscript for traditional publishing because I’ve been bewildered with the evolution of this whole industry. You’re making me think that maybe things will sort of shake out into some sensible form sometime soon. There is no substitute for integrity, and I appreciate yours.

  • http://www.facebook.com/KASemenova Karen Adams

    So it’s okay for Amazon to monetize unpublished manuscripts but nobody else? (And yes, they do this. Their “free” services result in them getting royalties from the sales of tens of those books to the “author’s” friends; multiplied how many times? Their larger strategy is capture the ebook market by having thousands of titles–quality irrelevant–to drive Kindle sales. By sheer volume, they are monetizing mss that would have once been called “unpublishable.”) The new publishing model seems to be: Publish it and they will come. The truth is, most of the time, they DON’T come. Most of the time, all of these services are vanity to some extent. Hell, I’m becoming a vanity service. If somebody wants to pay me to edit a book I believe hasn’t a chance in hell of selling more than thirty copies, what am I supposed to do? I’m supposed to be “ethical” and turn them away? Bookbaby may be the best, may be “free,” but they’ll still charge you a couple hundred for a book cover, and they’ll charge you whether the book is decent or not. Does that make them unethical? 20k for a book trailer is absurd. (Yet try telling that to a guy who is convinced he is an “author,” has a lot of cash, and is convinced his book is the next Hunger Games.) It’s completely crazy out here, Jane. There are people who will throw thousands and thousands of dollars at their dream, and they aren’t much interested in reason. I tried to convince one client NOT to go AS. She couldn’t be convinced; she wanted the finished book, she is busy, and she was willing to throw the money at them to get it. But by your logic, the big six aren’t supposed to recognize the way things are shaking out. Everyone is bleating that the business model is obsolete; but when they explore other options, they’re “unethical.” The big six are damned if they act like gatekeepers and damned if they don’t.

  • http://janefriedman.com/ Jane Friedman

    I don’t see how I’m arguing that the Big Six aren’t supposed to change. I am arguing that they ought to make improvements to an industry (POD publishing) that hasn’t been very forthright and authentic about the service they provide—that preys on ignorance.

    Some writers/authors need services to accomplish their goals, and sometimes they want FULL service, and are willing to pay for it. If ASI is able to serve that customer transparently, genuinely, and honestly, excellent. Will that happen with this acquisition? We don’t know yet, but as I’ve stated, it seems unlikely.

    I’m also not arguing that Amazon (or any provider) should be the only one in the self-publishing service game. But as time has gone on, I find it more difficult to equate what ASI does with these other services, which are more forthright and honest in their dealings with authors—and pay authors far more than ASI ever did, and offer more rights to authors than ASI ever did.

    They are more author-friendly than ASI.

    Will Pearson’s acquisition make ASI more author-friendly? We’ll see.

  • http://janefriedman.com/ Jane Friedman

    For those following this comment thread, you might enjoy reading this opinion piece over at IndieReader.com. A few snippets below. Link: http://indiereader.com/2012/07/penguins-new-business-model-exploiting-writers/

    Industry watchdogs such as Writer Beware have received a litany of complaints about Author Solutions and their subsidiaries over the last few years: misleading marketing, hard-selling of over-priced services, questionable value of products provided, awful customer service, and, after all that, problems with writers being paid.For example, Author House will provide you with a “web-optimized press release” for the bargain price of $1,199. In case it isn’t obvious, you would likely receive greater promotional value from setting fire to that money on YouTube.How do writers fall into the trap of such an awful company? In short, disingenuous marketing. According to Victoria Strauss at Writer Beware, “marketing efforts include maintaining sites likeFindyourpublisher.com, which purport to be utilities to help writers choose a publishing company.” That site, of course, will only give you the false “choice” of various Author Solutions subsidiaries – all of which have similarly awful services.

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  • http://www.turndogmillionaire.com/ Turndog Millionaire

    Have you read this Article by David Gaugrahn?
    http://indiereader.com/2012/07/penguins-new-business-model-exploiting-writers/

    This is not good for aspiring authors. It is shaky at best and dodgy :(

    Matthew (Turndog Millionaire)

  • http://twitter.com/AngelaAckerman Angela Ackerman

    I try to always see the positives, but it’s interesting to me that the Publishing Industry has a history of criticizing Self Publishing for its poor quality, yet as they lose revenue to it on the front end, we see several publishers jump to cash in on this same ‘tainted product’ on the back end.

    Like you, I do hope they are not only seeking to profit from this stream and are instead planning to help Self Publishing to grow in areas where growth is difficult, namely distribution and raising the profile of self published books with book buyers.

  • http://janefriedman.com/ Jane Friedman

    I read that! It’s a scathing takedown of ASI’s business practices.

    While it’s true that publishers need to change/adap or die, and I don’t begrudge Pearson nor any other publisher a means to survive in the new publishing paradigm (whatever that ends up meaning), I don’t agree with a method of survival that takes advantage of the vulnerable and clueless. Nothing can convince me that’s an ethical OR sustainable business practice.

  • http://janefriedman.com/ Jane Friedman

    Indeed. The trend suddenly becomes innovative and worthy because the publishers need money.

    It’s sad, because there IS an innovation opportunity here, but I doubt Pearson will see it or take advantage of it.

  • http://www.turndogmillionaire.com/ Turndog Millionaire

    Agreed, I’m all for businesses to evolving, and times a ruthless strak needs to be had. Business, after all, is business.

    There’s a difference between ruthless and underhanded, though. This, I feel is more toward the latter. Which is sad. It could be something Penguin end up regretting. From a Brand point of view, anyway. Maybe not from a sales perspective

    Matthew (Turndog Millionaire)

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  • http://twitter.com/AngelaAckerman Angela Ackerman

    I agree, there is opportunity here to become a bridge and help Self Publishing, rather than just try and make money off authors trying to get their cherished projects into a reader’s hands. I hope they do the right thing.

  • http://www.facebook.com/mgkizzia Michael Kizzia

    I’m thinking of starting a publisher’s soap opera. I might call it “As the Lines Blur.”

    I recall not too many years ago when Harlequin added self-publishing. Knees jerked everywhere. This time I am finding the reaction slower to surface and much more restrained. There is more wait and see with the admission of the dirty little secret that all publishing is “for profit” and only the models differ.

    The thing about commercial publishers for me was the maintenance of quality standards. But as any editor will tell you, they see high quality work all the time that they simply don’t have room for. Now, at least this material has an outlet through e-pubs like Amazon and Smashwords. The problem, of course, is Amazon and the others will publish any kind of drivel and not care less if it only sells a few copies, as long as they get their cut. In that respect they are no better than Author’s Solutions.

    The only thing about AS is the charging of money up front for dubious services. Now, Penguin may improve the services. But the thing for me is, as I said, the quality of the product. I’m afraid that anyone who believes Penguin will impose some quality standards of the work of AS is delusional. And if they improve the distribution end, how then is the reader supposed to know what is well crafted and what is drivel? Penguin might end up shooting themselves in the foot.

    -Michael

  • http://janefriedman.com/ Jane Friedman

    Interesting perspective, Michael. I agree that Penguin/Pearson is not going to impose quality standards on work published via ASI.

    It will be interesting to see what kind of distribution packages they’re able to offer. As far as digital/ebook distribution, the playing field has already been leveled there. Unless you look specifically at the publisher name, self-pub and traditional pub ebooks are sold without differentiation in outlets like Amazon—though sophisticated readers can often tell the difference based on the cover and description alone.

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  • http://twitter.com/ShawnSpjut Shawn Spjut

    Jane
    I’m thankful that little fishes in big ponds (like myself and thousands of others) have the wisdom and credentials of people like yourself to help shine the light on the changing landscape of publishing (even if those changes aren’t all that they are professed to be). Thanks for having the chutzpah consistently point it out.

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  • Pam Stucky

    Great post, Jane – thank you. When I read about the acquisition my first thought was, “Oh, nice, Penguin, you’re not willing to publish my books [they rejected me] but you’re more than willing to take my money to let me do what I can do for myself? No, thanks.” I also read somewhere that (and I paraphrase here) in response to people who are worried that getting involved in the seedy business of self publishing, Penguin has said they’ll make sure it’s clear whether you’re buying a Penguin book or an Author Services book. Heaven forbid someone think a self-published book could possibly be *worthy* of a traditional label! Percival, how you jest!!

    Found the article: http://www.digitalbookworld.com/2012/penguin-buys-self-publishing-platform-author-solutions-for-116-million/

    As you and everyone in the comments is saying, it’s nothing more than a scheme to cash in on vulnerable, confused writers.
    Pam
    http://www.pamstucky.com :)

  • Pam Stucky

    Er, that is, as you and everyone in the comments ARE saying. :)

  • Pam Stucky

    I read that IndieReader piece, then followed the links and spent an hour or two reading all Emily Seuss’s posts about iUniverse. Good golly. Writer beware indeed.

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  • robert ray

    dear whistle-blower online-
    nice work slapping the hands of ASI-
    they are a sorry bunch
    no question about that
    preying on the hopes and dreams of us writers
    when you figure out how to use a book (print version or e-version) to grab the attention of a culture wired to i-phone-like gadgets
    let me know
    robert ray
    the weekend novelist
    just hit the LIKE button.LOL

  • http://www.facebook.com/KASemenova Karen Adams

    Thanks for the reply. I read it last night and woke up with a response, something I probably needed to work out for myself, and I ended up calling it commodification. It’s too long to post here, so I did a blog post.
    http://illiterationnation.blogspot.com/ If it’s not kosher to post the link here, please delete. I mean no offense. I mean to understand the people showing up in my inbox, and what is going on out there!

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  • wordbeeps

    I was about to write something, read Karen Adam’s post and stopped. It said everything I was about to and more. Then I read her blog post on this and cheered and threw confetti. And really, it’s too bad she wrote everything I was about to. I was going to enjoy spitting and typing at the same time. It also would have been my first “Ye Gods, Jane” letter. But at least I can write that:
    Dear Jane. I am huge fan, I love that you can get riled up, but….Ye Gods.
    Signed, One of the Vulnerable and Clueless.P.S. Jane (I’m still a fan. Ye Gods.)

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  • http://janefriedman.com/ Jane Friedman

    Both you & Karen might be interested in a post I wrote a few years ago, when I was publisher of Writer’s Digest. It’s along the lines of “It’s business, stupid.”

    Harlequin’s Self-Publishing Venture: Is It the Future of Publishing?

    http://www.writersdigest.com/editor-blogs/there-are-no-rules/digitization-new-technology/harlequins-self-publishing-venture-is-it-the-future-of-publishing

    I should note here that when the Harlequin post was written and published, e-books had not yet become a meaningful format, and very few options existed on the market for a self-pub author who didn’t want to do the work themselves.

    Still, I’d still be likely to make those same arguments today, depending on mood. My mood then—as publishing exec—was business and profit, 24/7.

    In 2010, when ASI was talking with Writer’s Digest/F+W about creating a white label partnership, internally we started brainstorming ways it might work without losing our credibility as an unbiased service/publication for writers. Writer’s Digest, if partnered with ASI, would have a financial stake in the path that writers chose to publication. Even if strictly a business agreement, not affecting editorial, I didn’t see how Writer’s Digest could keep its reputation with such a conflict of interest.

    But I was wrong that it would be a problem. The partnership was formed after I left, and hardly anyone in the public/writer community said anything. No one cared. The people who already didn’t trust Writer’s Digest still didn’t trust us because we’d carried advertising for those services for decades.

    After the ASI discussion (but before the partnership & before I left), I was asked to develop a writing competition that had a $1,000 entry fee.

    It’s just business, right? Go make money.

    But I didn’t enjoy my job any longer.

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  • http://www.facebook.com/KASemenova Karen Adams

    First, wordbeeps: Thanks for the confetti. You made me laugh. And Jane, I read the Harlequin post (and see you already wrestled with what I was wrestling with yesterday, of course.) I most appreciate “I didn’t enjoy my job any longer.” I get that. For me, it’s a slightly different version of something lit types have always dealt with, that is, you do some work to feed your belly, some to feed your soul. When somebody wants to throw a chunk of cash at me to help them craft a memoir that I think has little chance of selling, I don’t turn them down. First, because I’m not the god of writing. I might be wrong. Second, because it’s their money, it’s what they want to do with it. Maybe they’ll turn into a great writer; maybe they just need to get this book out of their system. Who am I to decide what is right for them? (I don’t make claims about possible success, so I feel ethically clear.) And third, this transaction enables me to turn around and give a half-price edit to a young soldier who has boatloads of talent but limited skills and cash. I can help this kid and he might someday be a fine writer. This is essentially the model trad pub once worked on, right? For me, that’s the saving grace, personally–a combo of mission and business. (Which is essentially what I think Penguin is up to, and it’s why I’m not scandalized.) I enjoyed this exchange, btw. Thanks!

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  • wordbeeps

    Well, Miss Jane. I read it. Thanks for the link.
    It looks like you wrote all about this side to this argument three years ago way back in the dark ages of 2009 before iphone IV was invented. (Ancient times.)I must say, I like the way you can get riled about writers being taken advantage of. It is a wholesome rage. There is some baseline of moral indignation to it, a line you’ve drawn that others dare not cross. You should have been a journalist. In my newspaper days I did my best research and wrote my best stories when outraged at unfairness. Outrage and coffee and Canadian Club rye whiskey (American translation: bourbon) helps ink spread so much nicer on the page. It makes aim truer. Ink splashes on the shirts of bad guys so much better and makes it so much more difficult for the bastards to wash it out. When ink sticks, it inspires people to reach for their fridge magnets to savour it with their eyes again and again. If a wolf learned to write newspaper columns, he’d say, “You know, ink tastes a lot like blood.”Humble thanks + cheers to you at VQR.

  • http://janefriedman.com/ Jane Friedman

    I was editor of my college newspaper and student member of SPJ. Maybe I’ll return to journalism yet.

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  • http://janefriedman.com/ Jane Friedman

    Writer’s Relief performs the services they advertise, but in my opinion, they are not worth paying for. I believe the process of querying and submitting is a valuable one, and can only be done effectively by the writer.

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