Big-6 publisher jumps on the indie bandwagon

Was it just a matter of time?

The news came recently that Penguin Group, one of the largest book publishers in the world, has acquired Author Solutions Inc (ASI), a leading provider of services for self-publishing writers, for $116 million.

Penguin’s CEO, John Makinson, waxed rhapsodic in remarks made at the time and quoted this week in the Atlantic Monthly, saying:

“Self-publishing has moved into the mainstream of our industry over the past three years. It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin.

This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital to our future.”

What does this deal say about self-publishing’s evolving position in the industry?

That depends on who’s talking. So I asked two insiders. One is an upbeat proponent of self-publishing, Keith Ogorek, the Senior VP for Marketing at ASI. The other is a caustic critic of the deal, a source at the highest levels of traditional book publishing, who requested anonymity in exchange for his candid views. I’ll call him James Doe.

Ogorek told me: “This answers the skeptics and naysayers who doubt the permanence, importance, and benefits of self-publishing,” he said. “It validates self-publishing because one of the world’s largest and most respected traditional publishers has made us a part of their company.”

And on a darker note Mr. Doe told me:  “Buying an author services company gives Penguin access to the sub-slush pile, which is the realm of self-publishing,” he said. “From Penguin’s perspective why not make a nickel off the zillions of people who just because they have ten people reading their blog think they can command a substantial audience. Vanity publishing indeed!”

Ouch!

OK, so we have a major difference of opinion. Penguin’s acquisition of ASI is either a marriage made in heaven for the benefit of self-publishing authors or it’s a desperate preempting of David by Goliath motivated strictly to grow corporate revenues.

The big IF: Potential benefits for self-publishing writers

Penguin CEO Makinson told the Wall Street Journal, “Authors increasingly are willing to pay for self-publishing if the publisher plays a big role in distribution, marketing and promoting the title via social media.”

So what happens if an author, frustrated by years of no response, rejection or disinterest from the traditional folks decides to self-publish with one of ASI’s imprints? Will signing on with ASI get the author an audience with Penguin? Will Penguin really play a “big role” in distributing, marketing and promoting that self-published book, like Makinson said?

I asked Keith Ogorek about this. Here’s our exchange:

How does the Penguin acquisition help writers published by ASI?

We’re setting up an early warning system, so books being self-published at ASI can be flagged by our team and called to the attention of Penguin for consideration. In some cases, the books can move from our radar system to Penguin’s, even before publication or a title can move out of our previously published books that our editors feel are exceptionally good writing or have sold very well.

What should an author do to get the attention of editors at ASI or Penguin?

Go on the Author Solutions website and sign up for what you want. There’s no direct access or way to pay for getting into the early warning system or on Penguin’s radar. That will happen through our internal operations.

But how can an author get to the top of the list of those who are noticed?

Just what any author should do: write a good book. I don’t have to tell you how important it is to work with an editor to get the best book possible you can write, to build your platform, including the website, public appearances, social media, direct sales of your own through local or regional bookstores.

What do you predict for the future of the book business?

I think the whole publishing model for title acquisition is going to change as traditional publishers look to self-publishing as a source of new books.

It’s analogous to the film industry, where small independent producers, directors and writers have made low budget films and shown them at film festivals. Then the big studios have either bought the independent films outright and put them into their own distribution systems, or hired the producers, directors and writers to make films for them.

Similarly, I don’t think the traditional book publishers are going to go away. There’s always a need for good curation and distribution, but the method of title and talent acquisition will change. It’s already changing, as this Penguin acquisition of ASI has shown.”

Do you think other traditional publishers will be making these kinds of acquisitions and mergers with self-publishing companies?

Yes. I have no direct knowledge of this but I’m certain that other big traditional companies are now looking at self-publishing companies as sources of new content and profitability.

The view from behind closed doors: More from James Doe

If James Doe was thinking along those lines, he didn’t reveal it to me. But here’s more of his response to Penguin’s purchase of ASI and self-publishing in general. I find his remarks an accurate reflection of the attitudes and opinions I’m hearing from other friends and colleagues in the traditional side of the business.

“Publishers are struggling with two things, first, the rapid emergence of the eBook and, second, the related impact on books prices in a distribution world where Amazon owns the biggest chunk of the pie and is willing to drop eBook prices below the cost of publishing to entice more of their customers to buy refrigerators and other products, which is where they make their profits. All traditional trade publishers are impacted negatively by these trends and the related closing of hundreds of brick and mortar bookstores.

So what do publishers do when prices drop and margins go south with them? They look for new streams of revenue hopefully with higher profit margins. This is a necessary survival tactic.

In the last five years or so we have seen the transformation of vanity publishing into a new, viable publishing model. Of course, we only hear about the self-published books that make it big on their own or establish themselves through large initial sales in a way that entices established publishers like Penguin to sign their authors’ up for a new edition or their next book.

For the rest of the scribblers, if you can’t get published by a ‘real’ publisher, you can get published in many other places and maybe do more than brag about getting your first novel into a bookstore or at least on Amazon (for a price).

If Penguin is proposing to expand its revenue by controlling a greater flow of published manuscripts, they need to wonder if they aren’t cannibalizing their existing business by increasing the number of publications and unwittingly supporting the downward pressure on prices, which is at the center of Amazon’s efforts to control the print and digital book distribution business and sell more other stuff to the unwitting.”

_______________

What about you?

What are your thoughts about all this? Is this revolutionary acquisition of a self-publishing conglomerate by a traditional big-six publisher good or bad for writers?

We welcome your opinion of the points of view expressed in this post. What are your own predictions for the future of writing and getting published?

17 Responses to Big-6 publisher jumps on the indie bandwagon

  1. R.E. McDermott

    With all due respect, I’m not sure Author’s Solutions should be mentioned in the same breath with ‘self-publishing.’ I have no first hand knowledge, so I can’t say for sure, but you don’t have to look very far on the internet to find complaints about these folks. The impression I have is that their main aim is to separate aspiring writers from their money for over-priced services, with the unspoken implication that somehow using them may land a writer a Penguin contract.

    But as I said, I’ve no first hand experience. Perhaps others who have might share those experiences here.

  2. Susan Berger

    Everybody would love to be the next big ebook to mainstream sale. I know I would. Acuiring this company makes Penguin an agent for rookies. If someone self publishes and the book goes viral, well they’ll be first in line.
    I don’t feel I could self publish because I need an editor.

  3. Lexi Revellian

    Self-publishing means just that: you do it yourself. You don’t pay fees and a percentage of your profits in perpetuity to a business who publishes for you. That is called vanity publishing, and it’s something ASI made a lot of money from. Now Penguin hopes to make even more money, by holding out the carrot that they will be keeping an eye on the authors who pay them to publish, and may upgrade the best to ‘real’ publishing by Penguin.

    It’s sad to see a publisher with such a respected name preying on the dreams of the deluded.

  4. Michael A. Robson (required)

    @Lexi… The only one who’s deluded is Penguin, in thinking Authors won’t just publish their stuff on Amazon with KDP, combined with a robust online marketing, building legions of fans, etc, and cut Penguin out of the loop entirely. It’s 2012. The world simply doesn’t need these publishers to exist. Authors know it… does Penguin?

  5. Heidi Angell

    But new writers will be lured. Not all of us are brave enough, or diverse enough to self-publish. I am just getting into this self-publishing thing and it is frustrating, overwhelming, and discouraging at times. When I first heard about this, I was so excited and totally planned to tap into this possibility. It was a lot less scary than the contracts I was getting from my agent, or the thought of trying to go it alone. Then everyone I knew in the indie world went up in arms about it. I never bothered to look. As I find myself stressing over finding an artist for my next book, and still don’t have money to cover an editor, I ask myself, why pay a bunch of different people whose quality I cannot truly be sure of, when I can hire a company with the backing of Penguin, and produce a better quality book. If I’m going to risk throwing money away, maybe this is where I should go. I’m still waiting to see the quality of their books before I make the leap and in the mean time am going old-school self-pub. Literally doing it all myself; begging, trading and negotiating services to heck and back. It is tough. I can’t wait to make enough money to hire someone to do some of this stuff for me.

  6. Lexi Revellian

    Michael, what about Susan Berger’s comment above mine? She thinks because she needs an editor she can’t self-publish, so will have to use a service that will retain a percentage of her profits forever. She doesn’t know all she has to do is hire an editor for a one-off cost. Ditto proofreaders, formatters and cover designers, if necessary. As Dean Wesley Smith says here: http://bit.ly/PWlyJM you wouldn’t give your gardener a share in your house because he mows your lawn.

    But there are a lot of writers out there like Susan, and Penguin knows this.

  7. Bob Mayer

    ASI was pretty much a scam when Thomas Nelson and Writers Digest signed with them to have imprints. This just takes it to a new level.

    The bottom line is the money flows the wrong way: from author to publisher. That’s a vanity press and while I’m sure there will be one or two success stories from it, over 99% of those who pour their money into this are going to be unhappy.

    Caveat Emptor.

  8. Monica Shaughnessy

    The contempt Mr. Doe holds for writers is implied by his use of the word “scribblers.” He doesn’t seem to respect his customer base, either, calling them “the unwitting.”

    And he’s “a source at the highest levels of book publishing”?

    I could finish this comment with vitriol about the state of publishing today, but I’ll let Mr. Doe’s words stand for themselves.

  9. Virginia Llorca

    ASI has such a negative reputation. It seems like an unwise decision on Penguin’s part, but I hear more and more negatives about them. Self-publishing, by the way, is not the same as vanity publishing.

  10. John Stanton

    This development with Penguin is interesting but I’m not sure that it will have any real impact on anything beyond Penguin and ASI. In some sense, self-publishing is still the same as ever. That is that the consumer of publishing services (the writer) has to be very savvy. You have to research the vendor’s history, price and services then shop around. You might find a vanity press who offers a package of art, editing and marketing with a price that competes with a package that you could assemble on your own from separate vendors. In another scenario, a writer might be able to manage his or her own website, e-mail accounts and marketing but might suck at graphic arts, in which case they might hire a vendor for cover art but not require the web support services that are sometimes included in a prepackaged vanity press deals.
    It may be true that the Penguin name could add some credibility to the services offered by ASI but the consumer of publishing services can’t be swayed by advertising, celebrities or other gimmicks. You have to shop hard.

    BTW. I don’t use the term ‘vanity press’ in a negative context. I’m not sure what the official literary industry definition is technically but to me the term ‘vanity press’ means a company that provides packages of complete self publishing services. This makes it different from the term ‘self-publishing’.
    I know we’ve all seen many vanity press scams but I don’t particularly hold that against the business model of a vanity press.

  11. Guest

    “Authors increasingly are willing to pay for self-publishing if the publisher plays a big role in distribution, marketing and promoting the title via social media.”

    As wary as I am of this, for various reasons, I welcome it as well, at least in theory. If this model holds, then there might be a chance writers can once again return to their primary title as writers, period, and not have to worry (as much) about promotion and schmoozing or wasting time chatting on Twitter when they ought to be writing their book, not chatting with 14-year-old Bieber-ites who don’t have time or interest to read anything beyond 140 characters anyway. Also, it seems it could be beneficial to the multitude of writers who are introverts and/or generally uncomfortable with meeting with and talking to people, myself included.

    I have often wondered why few if any (quality?) options exist for this, author PR delegated like it is for a company, if the new publishing model encourages — if not requires — writers to “think like a business” — you’re the brand, and your book is the product. Well, CocaCola has a PR team encouraging consumers that Coke is It, and to compete with Pepsi. But Coke has billions of dollars in its coffers, while individual people usually hope to just break even with their weekly paychecks (and even those are dwindling as the economy worsens).

    As of now, paid-for options for writers include editing, design, and technical services such as managing and coding a website (so that the author looks “professional” rather than just slapping his/her name on Blogspot or WordPress). But I have yet to see anything in terms of promotion; that’s the writer’s responsibility, and some people just don’t like the banal idiocy of Facebook or Twitter or are painfully shy and would rather self-immolate than venture outside the writer’s cave. I am a writer (not yet an “author”) who falls into both categories. I vowed never to waste any time promoting or yakking on Twitter because I just don’t see the point in forcing myself into a nervous breakdown to be a shameless shill; I’m not a circus performer and have no desire to be Lady Gaga, who is certainly a brilliant self-marketer, simply because she is an exhibitionist with an almost pathological fondness of public sexual kink. Not my cup of tea, no thank you.

    But if I could “outsource” this whole idea of reader “engagement” and at least minimize my personal interaction with the public, and still have a commercially viable product, you bet I’d sign up for Penguin/ASI in a nano-heartbeat. To have the marketing AND technical aspects (at least mostly) delegated or outsourced leaving me more time to write and none to blog/Tweet/post cat videos (etc.), would be a great gift from the literary gods. Somewhere, J.D. Salinger is smiling knowing that “phoniness” need not be shamelessness if it allows one more time to live a Salinger lifestyle and simply write. Or to borrow from Virginia “Lone” Woolf, it’d be great not to have to maintain a chat room of one’s own.

  12. Alan Rinzler

    Guest,

    Thanks for the candid and heartfelt comment but unfortunately, no one can provide the necessary marketing for a book these days as well as the author. The services offered by any large traditional publisher or self-publishing vendor don’t work. During my long tenure in traditional commercial publishing we finally realized that and joined the other Big-Six publishers in stipulating contractually that an author have a website, a blog, and engage in online social networking. It’s really the best way to sell books, and no one else can do it for you.

    My solution is to consider self-marketing as an extension of the creative process. Authors from Charles Dickens and Mark Twain to Ernest Hemingway, T.S. Elliot, Graham Greene, Virginia Woolf and E.M. Forester each promoted their own work in their own inimitable way by writing about it.

    You care about your work, obviously, and want people to read it. Well, readers want to hear from you so they can understand why they should read it. And who would be better than you to speak with honesty, authenticity, and candor about why you wrote it, what it means to you, what you hope the reader will appreciate, enjoy, be inspired by, and generally takeaway from the experience.

    Such self-marketing doesn’t require leaving your home, needn’t take more than a few hours a week, and doesn’t detract in any way from your integrity or literary discipline.

    Consider this. Any aspiring author ignores self-marketing at their peril these days.

  13. Sue Lange

    I agree in part with you Alan, but I’m not so sure a website, blog, and facebook account are the powerful sales tools everyone thinks they are. It’s hard to tell what exactly sells a book these days. Certainly an author’s presence on the Internet helps, but many websites, blogs, and twitter streams exist in a vacuum. An author can pontificate all day long, but if she doesn’t have any readers of her blog, no one’s going to go buy her book.

  14. Simon

    I agree with Lexi. The carrot ASI are dangling might be attractive to some, but the horse has already left the barn (forgive the analogy, please). The people who will be attracted to it are those with the least ability to “fend for themselves”; believing perhaps that ASI is going to eb their savior. Note the above idea that somehow ASI are going to market your book or you as an author.

    As you correctly point out, Alan; marketing is very much in the author’s domain – thirty minutes to an hour a day is all it takes – and you’re allowed days off the world doesn’t stop spinning. So what would you get from the deal? Nothing except less money.

    For those who feel that self-publishing is too much – hold out for a traditional publishing deal.

    For those that can handle it; write a great book, hire an editor, hire a cover artist and publish it.

    Whichever you choose, have fun.

  15. Cynthia Washburn

    I used one of Author Solutions subsidiaries, iUniverse, for my first novel. I was a total newbie and didn’t have a clue how everything worked from formatting to editing to covers. iUniverse did what they contracted to do and what I paid $1000 for. It didn’t take too long for me to realize that I could do or pay others much less to do the same things. I can see, that for some, it is convenient or more practical to pay a company that packages the whole thing. But, I must object to two things with iUniverse. They pay me a royalty of 20% which does not compare favourably with Amazon’s 70%. They wanted to charge me $350. to fix 4 typos when I now know that this is something that takes 10 minutes to do and re-upload the file. I moved on from iUniverse and haven’t looked back.

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  17. Alyne deWinter

    I have a story about this. Being impatient with sending out queries, etc. and needing to learn more about craft, I signed up with a supportive self-publishing company. I was able to get some very good help with editorial evaluations, one included, one at extra cost. It took me another three years and a close friend who had once been a professional editor, for this book, now called Mara: Book One of The Roses of the Moon trilogy, in good enough shape to send into the pipeline.

    My fee to this company was supposed to cover the cover. The design they came up with was cute but so radically wrong for my book that I am convinced they did not even read the blurb they put on the back! So i have to hire a cover artist myself for the cover I want. Now come proofs. My fee covers only 50 errors – they call them ‘free’ — and I have to pay $100 for every next 25. This being a book of over 100,000 words, well you can guess.

    I live below the poverty line so I can have time to write. So I haven’t got money to throw around. With all this Kindle stuff coming along, I thought at least if i market well enough, I can make some money there. I was told initially – in 2009, and again this year, that I had full digital rights to my book. I looked at the contract and discovered that this is not true. This company expects to receive 50%! Plus I only get 10% royalty on my print books and they are unlikely to be carried by brick and mortar bookshops as was stated in the original contract that they potentially would be.

    How can a company that I have paid over $1000 to help with my book, who has invested nothing in my book and has given me no advance on sales they need to recuperate, expect any royalties from the sales of my book? On what basis are they entitled to that?

    There was a clause allowing me to remove my book from this company, which I have done. I didn’t have another $300 to pay them to fix typos when I can do it for free and put this book on Kindle and Create Space for 70% royalties. I have to buy the cover anyway. I have to do the marketing anyway.

    So, before you consider using one of these at this point in the evolution of Indie Publishing, consider that they will expect a chunk of your royalties on top of all their fees and charges.
    Good business model? I don’t think so.

    I will also say that after 5 and more years of working on the novels I am finally ready to release, that Indie Publishing appeals to me a great deal. My friends who are traditionally published are not selling that well and had to wait at least 18 months for their books to come out once they were accepted for publication. Its wonderful to have that platform, but I am too impatient and feel very excited about releasing my first full length novel to Kindle

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