The Author as Customer

Posted on 24 July 2012 by Claire Ryan

So, Penguin’s parent company bought Author Solutions. And now, BookCountry’s services page has been taken down for an “upgrade”. I’m going to draw the obvious conclusion and saw that BookCountry’s services are going to be Author Solutions’ services, as served through their various imprints.

Once everyone got over the shock of a company like Penguin being mentioned with Author Solutions in the same press release, the opinions started to fly thick and fast. I, unfortunately, fall into the camp of people who are less than impressed with this whole thing; it looks like a money grab to me, if anything. There’s a lot of cash in getting authors to buy overpriced services with an option to snatch a chunk of their profits if their book is a success too. David Gaughran over at IndieReader sums up my opinion on it all, with an extra side helping from Emily Suess over at her excellent blog.

I got to thinking about one aspect of it after reading Porter Anderson’s article over on Jane Friedman’s blog – that of the author as customer.

Bear with me on this…

In the traditional publishing paradigm, authors are a part of the production process. They are the starting point; the raw materials department, as it were. They represent the author as supplier, as business partner, to the publisher; people who have a working relationship with the publisher that is ideally mutually beneficial. They are not easily replaceable, if their product is in high demand (Stephen King, J.K. Rowling, etc.).

Of course, you also have the new entries to the market who are trying to make a name for themselves, who want to build their brand awareness. The publishers have a large customer base (bookstores), making them very attractive as potential business partners, even though the terms are not as favorable as they could be.

Self-publishing, of course, blows this out of the water. The suppliers now have a method of refining their product and selling it into the market in direct competition with the legacy players, frequently for far less. How often has this very scenario played out in other industries? For suppliers who are not already in business arrangements with the publishers, a whole new world of money-making opportunity has presented itself. Of course, the suppliers who can’t or don’t want to get out of their arrangements will moan about the product being devalued, but who cares what they think? Certainly not the consumer, who now gets the same product for less. Certainly not the new players, who are making good money, nor the service industry that has sprung up around them to aid in this new, greater efficiency.

This is business, nothing more. Business changes. There are no tears for those who cannot adapt.

Changing Views

Not all adaptations are what we expect. Not all are good, for a given definition of good. The big problem here is that Penguin are adapting in one direction that’s completely opposed to their usual business. This is a fundamentally different view than what has governed the original publishing paradigm – it positions the author as customer, not as business partner.

Consider the dichotomy of it:

  • The author sells their work to Penguin for an advance and royalties. Penguin and the author both have a vested interest in having their work sell.
  • The author buys a package from Author Solutions, giving up a chunk of cash, a large part of the royalties, and their rights. Only the author has any vested interest in having their work sell.

The problem, as I’ve said before, is that this represents a complete turnabout in who is being sold to.

…it’s blindingly obvious that iUniverse [an Author Solutions imprint] has no incentive to sell the books. They get far more money from the authors themselves, and it’s clear that their business model is geared towards that alone. I am sure of this because it’s already well known that the iUniverse sales team calls authors, not bookstores, to sell them on their products. Their website is geared towards selling to authors. By all accounts, every Author Solutions subsidiary works on the same model, and this puts them at odds with the purpose of the author in selling books to readers.

Penguin as a company have always sold to big chain bookstores, who are slowly dying off. They, like all the other large publishing houses, know nothing whatsoever about selling to actual readers. But authors, now; they understand authors. They have many business relationships with authors, with years of experience to help them out. Suddenly, this makes the acquisition of Author Solutions very clear – it’s not as big of a stretch to reorientate their business to sell to authors, instead of buying from them, as it is to learn how to sell to a demographic for which they have no prior knowledge and for whom Amazon is such a giant competitor.

What Now?

My first instinct was that this was not a good deal for Penguin. They didn’t get Author Solutions or the imprints for the brand power; anyone who’s anyone already knows their reputation. They certainly didn’t get them for the quality of their services or their work force, if Emily’s careful complaints tracking is any indication. So what gives? Penguin was already offering publishing services through BookCountry. Why not expand that, rather than bring Author Solutions and its terrible reputation down on top of them?

I think I know why, now. We’re back to the beginning, to my guess about BookCountry. Penguin wasn’t going to expand its publishing services through BookCountry when ASI and its imprints already had a giant, money-making machine already churning out banknotes. The whole point of the acquisition was plugging Author Solutions into a ready-made audience in BookCountry, and using the legitimacy of the Penguin name to boost Author Solutions’ sales even further. It’s not about breaking into international markets, or innovation (excuse me while I laugh at that). It’s about the way that Author Solutions makes money, by selling overpriced packages. This is the same reason why I think that there will be no significant changes to the business, as some people hope. Why would Penguin bother to tinker with a machine that already makes money? The changes that they would have to implement, as many people hope, to clean up ASI’s reputation will be large. If they were going to do that, it would have been easier and less onerous to just build a new division with a clean slate.

That said, my opinion that this was a bad deal still stands. Here’s my reasoning: ASI makes money on new authors who don’t know any better. That really can’t last. How long do they have before the knowledge of how to publish on Amazon – or Kobo, for that matter; the process is even simpler there – becomes even more widespread? How long before they’re simply crowded out by the service industry of true self-publishers, who can provide covers and editing for a much more reasonable price? Their whole business model depends on ignorance, in an age where knowledge is easy to find if you have even the vaguest idea of what you’re looking for. In this respect, ASI needs Penguin a lot more than Penguin needs ASI, as the legitimacy of the Penguin name means those high prices can be justified a little while longer.

I think Pearson made a bad decision here, in the long run. I have said it before and I’ll say it again: the major publishers need to do something radical to connect with readers, not bookstores and not authors. Tor and Baen are the only two I know of who have any idea of what they are doing. As for the others, the author as customer is simply not a long-term viable solution when that particular customer base has their choice of cheaper, better quality alternatives.

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  1. The Dangers of Bad Contracts | The Raynfall Agency Says:

    [...] story short… do you remember when Penguin bought the open sewer that is AuthorHouse last year? Here’s what I said then… It’s about the way that Author Solutions [...]

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