At IfBookThen earlier this year Molly Barton global digital director at Penguin USA who co-founded Book Country, an online community for writers, said the next stage in that site's development would be to introduce "services" that the writers could buy, for example editorial, or design services. She also told me that Penguin was looking to take the site international, including a UK launch.
Well, $116m (£74m) later, with the acquisition of Author Solutions Inc Penguin has done just that, and with knobs on.
The numbers put out buy ASI are immediately impressive. ASI has generated about $100m of revenues, growing at an average annual rate of 12% over the past three years, with its sales stemming primarily from services to authors. The company has worked with 150,000 authors to publish, market and distribute 190,000 books, with approximately 1,600 staff located mainly in Bloomington, Indiana and Cebu City, the Philippines.
In the UK, through ASI subsidiary Author House UK, you can buy B/W packages from £500 to £10,000. There is a package that will "guarantee" your book will get in bookshops, even, reputedly, Waterstones (that will come as interesting news to some publishers who are struggling to get their titles into the James Daunt-run chain, but that is another story).
Some of these offers feel a touch close to old-style vanity publishing. But in its own FAQs, Author House says it is not a scam. "More than 40,000 happy authors would say 'no'", the company says. Judge for yourselves. On Author House's UK site, its current bestseller is Divine Artistry, which sits at 331,503th position in the Kindle list, has no reviews on the Amazon site, and no ratings. As a physical edition, it sits at 1,554,405 on the paperback list. The book was published in 2009.
It is probably unfair to paint the overall ASI group with its UK offshoot. ASI consolidated its UK operation two years ago because it was losing money, and is now run out of Bloomington in the US. But from the conference call held today we learn that two-thirds of Author Solutions' revenue comes from selling to authors, rather than selling their books. There may be good reasons for that: the services may be good, and the book sales may take place outside of the ASI infrastructure. Either way I'm struggling to think of a prominent self-published author who has gone the AIS route, certainly not in the league of Amanda Hocking, or Barry Eisler, but Authorshouse.com does provide a list of notable authors here. ASI also provides services to publishers, including developing white-label self-publishing lists, such as Hay House's Balboa Press.
There is a clear win for Penguin here, as Penguin c.e.o. John Makinson says in the press release: "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.”
He also said: "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. No-one has captured this opportunity as successfully as Author Solutions, which has rapidly built a position of world leadership on a platform of outstanding customer support and tailor-made publishing services."
In the conference call Makinson also stressed that the deal was a good deal for Penguin "as it is", without needing to think through how it could develop either company. "This is a company on a very considerable growth trajectory," he said.
Book Country is not mentioned in the press release, and Makinson admitted that it had not even had the chance to think through how the two could be matched. But if Penguin can build on that emerging platform, and grow its services to authors, and more authors at that, then the two could become a significant competitor to Amazon's Kindle self-publishing programme. Or that of Barnes & Noble, or the more recently introduced Kobo Writing Life.
There is a change sweeping over publishing, and you'd expect Penguin to be in the vanguard, as it was with paperback publishing in the 20s.
But there is also a huge risk of reputational damage for the Penguin brand. The very essence of a publisher is in taking editorial decisions and risking money on the author's behalf. Manifestly, ASI drives in the opposite direction. In the conference call, Makinson said that they will be careful in the early days about how they "associate the brands".
Other publishers are headed along the same route aswell, of course. HarperCollins launched Authonomy years ago, and has tapped into a rich seam of budding authors as a result. Bloomsbury's A&C Black offers editorial services and workshops through its Writers & Artists Yearbook brand.
But none has been so bold as this. And none brings with it the same potential risk - and upside.
There has been lots of talk about innovation recently and of publishers just not being disruptive enough. Whatever the merits of this particular deal, Penguin has surely changed that conversation for good. As Kevin Weiss, chief executive of ASI, said on the conference call, "there is greater opportunity in working together to change the industry, rather than having change imposed on it" from the outside.
Recent blog posts
- Your Book Is Watching You
- Don't curb your enthusiasm
- A note to what has been lost
- Trial and marginalisation
- Orna Ross, the Pudding Would Like a Word — @Porter_Anderson
- Book industry: stop moaning and be creative | @tom_chalmers
- What comes next: the workshop
- Author Solutions and Penguin Random House: The Real Deal?
- Do Publishers Need a Bigger Boat?
- Is publishing about to come face to face with the corridor of mirrors that is Alt Lit?
- Indie authors are meeting industry standards
6 days 16 hours ago
- "A debate or three"
1 week 8 hours ago
- My what a storm in a teacup
1 week 14 hours ago
- Thanks for this gracious comeback, Orna
1 week 17 hours ago
- "HOW do we innovate?" is the key question
1 week 17 hours ago
- Gosh Porter, I am surprised
1 week 22 hours ago
- Thanks, everyone, for your comments...
1 week 4 days ago
- Poor customer service not poor PR
1 week 5 days ago
1 week 5 days ago
- Censoring comments
1 week 5 days ago