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You are here: Home / Introduction to Self-Publishing / What do you think about the purchase of Author Solutions?

What do you think about the purchase of Author Solutions?

Gen. Douglas MacArthur paves the way for the purchase of Author Solutions by Penguin Books

By Ron Pramschufer, President – Self Publishing, Inc– Turning Authors into Publishers

I held off answering this question for a bit until I could develop a solid opinion. At this point I’m not even sure if the check has cleared and Penguin isn’t showing any of their cards. The way I see it, this could either be a really good move for self-publishing authors or a very bad one.

The first question that has to be popping into my regular readers’ minds has to be “How could this possibly be good? Ron, you’ve been trashing the vanity press industry for years.” The last few Author House (Solutions or whatever) moves have involved venture capital firms, not publishers. The sole purpose of these business custodians was to make money… period. If they had to lie… fine. Deceive…. fine. Sell authors a bunch of expensive services that they didn’t need…. no big deal. Pretend they were a US company at the same time they were laying off most of their US based employees in favor of establishing a huge operation in the Philippines…that’s business. Enter Penguin.

For this sale to be good for authors, the first thing Penguin MUST do is to load the Board of Directors with publishing people and get rid of the deception. I haven’t seen this happen yet. Kevin Weiss, the ex-IBM suit is still listed as President and Chief Executive Officer. The first time I met Mr. Weiss was at his first Book Expo America and he told me “I know absolutely nothing about publishing”. This was probably good for a venture capital firm because their goal was to turn the place into a money machine, not a publisher.

The problem with getting rid of the deception and selling useless services, is they would probably be out of business in a few years. I saw this happen one other time back when I was selling printing to New York publishers. My major customer was a mid-sized children’s book publisher. His main competitor was a place out there in the hinterlands somewhere. On many occasions my customer used to say “XYZ can do it for this, or XYZ is doing that, or XYZ is buying it for this.” My answer to each of these was always the same. “Ed, they can’t be. Somebody is blowing smoke in people’s faces.” One day Ed tells me, “Ron, XYZ just got bought by super New York City publisher ABC.” My reply was, “I hope they have some money left… I have a bridge I’d like to sell them… all they bought was smoke and mirrors.” Within a fairly short period of time that “smoke and mirrors” division completely evaporated because it was part of a real publisher. Penguin is a real publisher.

Keep your eye on the email “specials” from the “New” Author House, IUniverse, XLibris, Westbow or any of the other Author Solution brands. If the “Buy one, get one free” ads continue, it’s probably not a good sign for the author.

Let’s look real quick at the numbers. Back in March of this year, Author Solutions put up a “For Sale” sign in Publishers Weekly. In an article by Jim Milliot in the March 7th edition, the Author Solutions finances were pretty clearly laid out.

quiz-homeThe gross sales for ASI were $100 million dollars. Out of that, $1.7 million was paid out in royalties. Think about that one for a long, long time.

No matter what you think you are going to pay, their stated first hit on the credit card is $1375. This goes right along with that “How much is your $14.95 muffler?” article a few issues back. No matter what you think you are going to pay, you will be paying that much on your “First” order, which, by the way, doesn’t include any books. Their stated “Life time value” of you, the author, is $5000. A quick calculation using their stats has you spending $5000 from which you will earn $59 in royalties. Great return, huh?

Another interesting number that they made public was the fact that out of their 1565 employees, 1215 are located in that great publishing Mecca, The Philippines. This location “not only handles production but sales and marketing as well”. To read the complete Publishers Weekly article, go to http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/50952-with-sales-of-almost–100-million-author-solutions-looks-for-a-buyer.html

I almost forgot to tell you that the added bonus, of course, is you actually own nothing of any importance once you have spent this $5000. The ISBN is owned by Author Solutions as are the files used to print your book. If you decide to go someplace else, you have to start from scratch.

Even with all the deception and the primarily offshore operation Author Solutions only made 4%… not exactly a huge number. Time will tell whether this move was good for Penguin or the authors, or both, or none.

If the company is reorganized as a true boot camp/testing ground for traditional publishing, it’s a good deal for the author. I’m not sure if a legit service like this is a 100 million dollar division of a major book publisher. It’s probably more like a $3-5 million dollar business. I’m not sure that a $3-5 million business is worth the 100 million plus that Penguin paid but that’s their business.

If Penguin continues the current vanity press model…it will be very bad for authors.

Keep your eye on the ads and remember….if it’s too good to be true… it probably is.

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Filed Under: Introduction to Self-Publishing, Opinion, Vanity Presses Tagged With: book printing, ISBN, Marketing, Naked Emperors, self publishing success, Vanity Press Publishing

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Michael Heath

My name is Michael Heath and I am the author of four novels and one non-fiction book. I have been both traditionally and self-published, so when I speak with you I have the knowledge, experience and appreciation for the questions and concerns you will have. Books are my passion and I never get tired of talking to authors about their projects. Authors who desire the same book quality (trade quality) as those produced by the big publishers, but still want to retain their publishing rights, should use Self-Publishing, Inc. I make this statement not only as an employee, but as a customer.

I grew up on the Jersey Shore which-surprise, surprise-is the setting for my novels. In the summers as a teenager I worked at three different fish packing plants so that I would have money for college. The fish plants are all gone, but I still have my University of South Carolina education … Go Gamecocks! Now my summer weekends are spent beaching and boating. I have also been known to enjoy a couple Coronas at the end of those warm days. Autumns are for falling leaves and football and I enjoy watching both. As a longtime NY Jet fan, I can tell you that on most Sundays it is easier to watch the trees shed their foliage.

It would be great to have the opportunity to discuss publishing your book. I hope to hear from you soon.

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Direct: 212-616-4206

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About Ron Pramschufer

Ron Pramschufer started in the printing business in 1969 and the publishing business in 1973. On the print side, he worked all over the printing plant including the pressroom, bindery, warehouse, production office, estimating and finally out into sales. Read More

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