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Author Solutions and Friends: The Inside Story

29 April 2015

From David Gaughran:

Author Solutions has forged partnerships with a long list of famous names in publishing – from Simon & Schuster and Hay House to Barnes & Noble and Reader’s Digest.

Recent disclosures in various lawsuits, along with information sent to me by a Penguin Random House source, detail for the very first time exactly how these partnerships work and the damage they are causing.

Since a second suit was filed at the end of March, Author Solutions is now facing two class actions, with the new complaint alleging unjust enrichment and exploitation of seniors on top of the usual claims of fraud and deceptive practices. It also has a wonderfully precise summary of Author Solutions’ operations:

Author Solutions operates more like a telemarketing company whose customer base is the Authors themselves. In other words, unlike a traditional publisher, Author Solutions makes money from its Authors, not for them. It does so by selling books back to its Authors, not to a general readership, and by selling its Authors expensive publishing, editing, and marketing services (“Services”) that are effectively worthless.

Indeed.

. . . .

Despite Author Solutions’ mounting legal troubles, and an unending stream of complaints against the company from both its own customers and a whole host of writers’ organizations and campaigners, companies are still queuing up to partner with Author Solutions.

Penguin Random House – its corporate parent – has shown no inclination towards reforming any of the deceptive and misleading practices of Author Solutions, or addressing any of the long-standing issues its customers face, handily summarized by Emily Suess as:

  • improperly reporting royalty information
  • non-payment of royalties
  • breach of contract
  • predatory and harassing sales calls
  • excessive markups on review and advertising services
  • failure to deliver marketing services as promised
  • telling customers their add-ons will only cost hundreds of dollars and then charging their credit cards thousands of dollars
  • ignoring customer complaints
  • shaming and banning customers who go public with their stories.

Instead of making any attempt to tackle that list, Penguin Random House has focused oninternational expansion of Author Solutions, a process which has also seen the re-introduction of practices which had previously been banished from the industry, like reading fees.

. . . .

Below is a partial list of the publishing companies which have partnered with Author Solutions to create their own in-house “self-publishing service,” but it gives you an idea of just how many supposedly respectable publishers are willing to profit from exploiting inexperienced writers.

The name of the respective service – or what Author Solutions refers to as a “Partner Imprint” – is in brackets.

  • Simon & Schuster (Archway Publishing)
  • Lulu
  • Harlequin (DelleArte Press) – partnership terminated 2015
  • Hay House (Balboa US, Balboa Australia)
  • Barnes & Noble (Nook Press Author Services)
  • Crossbooks (LifeWay) – partnership terminated 2014
  • Penguin (Partridge India, Partridge Singapore, Partridge Africa)
  • HarperCollins/Thomas Nelson/Zondervan (Westbow Press)
  • Random House (MeGustaEscribir)
  • Writer’s Digest (Abbott Press) – partnership terminated 2014

Some of these companies go to great lengths to hide the Author Solutions connection (Lulu, Barnes & Noble, and Crossbooks being pretty famous examples), and customers of these platforms often aren’t aware that services are being fulfilled by Author Solutions – yet another reason, if one is needed, why victims shouldn’t be blamed.

. . . .

Author Solutions pitches its services to publishers as a way of monetizing the slush pile, offering what it calls “white-label services” to these organizations – which essentially means that Author Solutions will provide the entire infrastructure for their “self-publishing service” and operate it on their behalf too.

. . . .

These relationships are crucial to Author Solutions, as it doesn’t get organic referrals – i.e. for obvious reasons, writers aren’t recommending its services and Author Solutions has severe problems with customer retention.

Aside from providing a false veneer of respectability to Author Solutions’ operations, the only role that the partnering publisher plays is to provide “leads” to Author Solutions, and then sit back and collect the royalty checks. In short, these publishers are pimping out their brand as bait for the Author Solutions scam.

. . . .

The relevant points regarding partners are:

  • Partner Imprints provide identical services, but often with higher prices. For example, the exact same book review package – Kirkus Premium – costs $5,999 from iUniverse and $6,999 from Archway.
  • These higher prices are necessary to cover, in part, the royalty payment to partners.
  • The balance is made up via higher quotas assigned to sales reps responsible for Partner Imprints.

. . . .

The sales force employed by Author Solutions is considerable. Most (approximately 80%) are based in the Philippines, despite deliberately giving the impression they are based in the US. Also, they aren’t identified as sales reps to Author Solutions customers, instead they are dubbed “Marketing Consultants,” “Book Consultants,” or “Publishing Consultants.”

Publishing Consultants are the first to deal with authors, advising them which publishing package to purchase. The only way that Author Solutions measures the performance of Publishing Consultants is the total dollar value of packages sold, so these sales reps are only incentivized to sell the most expensive package possible. If the customer can’t afford a given package, a payment plan is offered.

. . . .

Book Consultants are introduced to Author Solutions customers as the people who will help fulfill the “free” order of books that comes with their publishing packages, but their true role is to convince the author to place an additional order for further copies of their books, beyond the small amount that comes free with some of the publishing packages. From Author Solutions own figures released when looking for a buyer in 2012, we know that two thirds of its revenue comes from selling publishing and marketing packages, and one third from selling books. What wasn’t known until the depositions of Author Solutions executives were made public is that the vast majority of those book sales are authors purchasing their own books.

. . . .

According to a source at Penguin Random House, Author Solutions employs 594 sales reps in its Philippines office, and 138 in its US office, making a total of 732 staff members whose primary role is to sell products to its own customers.

This is in stark contrast to the amount of people dedicated to actually providing basic services to its customers – services which Author Solutions has a duty to provide.

. . . .

A recurring complaint from Author Solutions customers is that the company fails to fulfill purchased services, and also fails to fulfill basic services included in the publishing packages (allegations which are repeated in the class actions).

An example should illustrate why these complaints are so common. A frequent claim is that royalty payments are often delayed, incomplete, or wholly inaccurate – a situation further compounded by abysmal customer service when complaints are made.

You might imagine that calculating the respective royalties for the 180,000 authors and 225,000 titles which Author Solutions has published is a tricky task, especially given that these titles are distributed in several different formats to a large list of retail outlets, many of whom operate in different territories and currencies and pay out a different percentage based on a whole range of factors, including price.

This is how many staff Author Solutions employs to calculate royalties for all those authors and titles: 1.

That’s not a typo, there is one single person to calculate royalties for 180,000 authors and 225,000 titles. One person! And 732 sales reps with aggressive quotas to sell worthless crap like “web optimized” press releases for $1,299, YouTube advertising packages for $4,099, and Hollywood pitching services for $17,999.

. . . .

Staff turnover is a problem in general at Author Solutions, but particularly for the position of the poor person who has to calculate royalties for 225,000 books from 180,000 authors. I’m told that it’s lucky if this staff member can get through two payment quarters without quitting in sheer frustration – which means that a new person has to be regularly trained in, and is always playing catch-up.

. . . .

Among those refusing to comment was Publishers Weekly and I suspect its partnership with Author Solutions runs far deeper than simply allowing it to re-sell blocks of advertising.

. . . .

Obviously, having a financially lucrative partnership with Author Solutions acts as a strong disincentive [for Publishers Weekly] to run an exposé of its shady practices, but there are other factors in play. Author Solutions is owned by the largest trade publisher in the world and Penguin Random House’s advertising spend is considerable.

Penguin Random House has also been actively suppressing the Author Solutions story. One investigation I have knowledge of was supposed to be published in April 2014, but the editor in question decided to kill the story at the last moment.

Link to the rest at Let’s Get Digital and thanks to John and others for the tip.

Here’s a link to David Gaughran’s books

Big Publishing, David Gaughran

51 Comments to “Author Solutions and Friends: The Inside Story”

  1. The information David’s found is astonishing.

  2. Read the whole thing this morning and yeah, shocking stuff even for these crooks. David Gaughran deserves a truckload of pie and bourbon for being such a tireless champion of indies.

    • No, no, no. Don’t give an Irishman bourbon. It would be Irish whiskey (Jamieson’s) all the way.

  3. This is amazing. I saw this earlier today and reblogged it on my website.

    While researching it, I found these “photobooth” images from the Author Solutions International Sales’ Christmas party from 2013 (link to Facebook gallery). Held at Cebu City in the Philippines. At least they chose a literary theme.

    • goodness, they all look so very very young. Meaning, this must be entry level and not paid well for them?

      • It is a Filipino call center. It probably is not a high-pay call center, since lying is a high turnover job.

        And the constant A/C tends to make Filipinos sick and get neck cramps, so it is better to work at a high pay call center; but of course it is still decent pay at most call centers by Filipino standards.

    • At least they chose a literary theme.

      2013 is the release year of The Great Gatsby feature film. So not so much, perhaps.

  4. Does this country have a DoJ or not?

    If it weren’t David saying all this, and I hadn’t been reading it for literally years now, if would sound like a very bad conspiracy.

    The fact that it is real is disgusting.

    Talk about scams.

  5. I dumped Lulu the day they announced, with great fanfare, how they were partnering with Author Solutions to give their authors “Exclusive packages”.

    And I was like, since when does getting shafted from the rear classify as “exclusive packaging”?

    • I just barely stopped myself from taking that last phrase and running with it down the dark alleys of my sense of humor.

    • That makes me glad I never went with Lulu. I used to like them.

    • I had been planning on using Lulu to produce a dozen or so hard cover copies of my upcoming book to give away as gifts.
      Then I heard about the Lulu/AS partnership.
      I’ll be using Lightning Source instead.

  6. Why would anyone be dumb enough to vanity publish?

    • Because they seriously don’t know any better. In calling myself an author/editor in everyday life, I’ve encountered more people who’ve gone the vanity press route because they thought that was how publishing in general worked than I have people who actually understand how the business works. I’ve had outright arguments with people who insisted how things “really” worked, because that was how it worked for them (or their cousin, etc.).

    • Wise decisions often take a back seat to ego.

      I’ve run across people, well off and retired, who think nothing of dropping five grand to have someone make their dreams come true. Really, it’s just a very expensive pet project. They finally get that book out and that’s all that matters to them. And the idea of hiring cover artists, editors, etc on their own and making their own decisions that lead to self-publishing? Never gonna happen with this crowd. Taking control of your art is scary. Much easier to hand your baby off to “the professionals.”

      Also, people still associate prestige with any route that can be in any way associated with a big publisher, as in: “I submitted my manuscript to Penguin and they didn’t say No! They’re sending my book to their publishing partner!”

      And the story just gets sadder and sadder.

      • I met a guy not too long ago who was a pretty well experienced writer. He had done editing and proofing for scores of writers he knew, had also been a professional editor in the past, worked at a university press and had been with several legitimate agents but never landed a publishing deal. He was interested in indie pub but didn’t know if he wanted to go all in with it and abandon the traditional path. He honestly admitted to still wanting to be validated. He knew about indie pub, had a few shorts up (mostly worked on other peoples stuff though) and had visited JAK’s blog before but didn’t care for his tone. Through further discussion I learned that he had never heard of KB, TPV, DWS or KKR and certainly had never heard of D. Gaughran.

        I bought up those blogs and websites mainly because he was considering going with an Author Solutions affiliate. He has heard that they weren’t the same old vanity pub, things were different now and were new and improved (which I’ll agree to. Only scummier) and that it was a good way to get started with one of the “Bigs”.

    • A member of our critique group went with one of their subsidiaries catering to (preying on) the Christian book market. Got taken for $8000.+ and was proud she was a published author. Worse: she took out a loan to pay for it.

      Our critique group has about 12-20 active members but she did not consult the group for advice beforehand or tell any of us what she was doing, despite that being one of the purposes of the group.

      Some people are just blinded by their desire to be published. Even smart people do stupid things.

      • Robert Forrester

        The costs astound me; it’s more than the average advances you’ll get from a traditional publisher. I honestly don’t know how anybody thinks they’ll ever get a return on this investment. What is the thinking behind all this – my book is a potential bestseller and I’ll make bank if I only get the right marketing/production package? Or is it pure vanity – to be a ‘published author’, with no thought about a ROI?

        • Lack of homework skills.

          Lots of people go through life by “seat of pants” decision making without bothering to research or analyze the big ones.
          Makes them easy prey for slick pitches. (C.f., Maddoff, Bernie, also, “industry standard contract”.)

          The BPHs have long encountered these folks in their slush piles and, as pointed out above, finally realized that non-critical thinkers were an exploitable resource; abundant and right at hand. Only modest amounts of snake oil needed to fleece those sheep.

  7. Let’s face it, Penguin Random House was the first big publisher to figure out their gate-keeping/nurturing/control of writers was going to fall apart with this dang internet thingy and companies like Amazon cutting out them, the middle man. So they did the one thing they could, they bought up a shyster whose only claim to fame is ripping off writers even worse than Penguin Random House had been able to do. And others are climbing aboard the ‘Author Solutions Express’ which is fueled by the hopes and dreams of writers who haven’t noticed that nasty smoke bellowing from their author mill …

    Not strange bedfellows at all — though I see a day soon when they’ll be busy rearranging the deck chairs as this to sinks.

  8. They monetized the slush pile. From a sleazy business point of view it was genius. Even if the class actions result in a huge fine they’ll still come out on the plus side.

    All we can do is point out their scam and hope it snares as few aspiring authors as possible. David does us all a huge service by devoting his time to this. I’ll be buying a few more books of his and passing them out I think.

    • They monetized the slush pile. From a . . . business point of view it was genius.

      I saw that, too. Some VP got a bonus for turning a cost center into a profit center.

    • From a business POV of view, it makes total sense that they would go this route. They had a market that didn’t know any better or was ill-formed yet still wanted the product (although that market is probably dwindling now). They exist in a culture that still thinks major corporations are honorable and reputable. What could go wrong?

    • The Scott Meredith Agency and their magazines did it first, and that was back in the Fifties or before.

      • The Scott Meredith Literary Agency was still actively fleecing victims in the 1980’s.

  9. Let’s just look at these numbers for a moment…

    732 salesmen, so let’s call it at least 800 people altogether. Even offshore, payroll probably averages at least $20,000, so, say, $1.5 million for HR.

    They actually do buy some of the services they sell, so there are other expenses, but that’s covered by the author so they’re not out of pocket on it. At 250,000 titles, how much do they have to make off of each title just to cover payroll? Anything over $4/title/year is direct profit, of which some percentage goes to their partners.

    So, they can sell anything they want to, and the host of salespeople is covered.

    The big vulnerability is volume. If most sales are intra-customer, than reducing the customers has a leveraged negative impact on them. Keep spreading the news…

    • $20,000 works out to $10 per hour for the average full-time job, which is above minimum wage in most of the U.S., let alone the Philippines. But you lost a 0 somewhere along the line, because 732 x $20,000 is $14.6 million.

      Looking at the other side of the equation, though, if each of those 180,000 authors “only” bought $1000 worth of “Services,” that’s $180 million! I suspect the average is much higher. Whatever they’re paying their sales force, it pales in comparison to what they’re raking in.

      • From Author Solutions’ own figures – released when looking for a buyer in 2012 – the average customer spend is $5,000. And remember that virtually all Author Solutions customers only publish one book with them (for obvious reasons).

        • @ David

          Obviously, ASI cares not one whit about any repeat business. And why should they? The supply of naive one-time wannabe “authors” is inexhaustible and continuously self-renewing. A cash cow that keeps regenerating more beef no matter how much it’s harvested.

          Yes, it’s a sad situation, but it’s reality. Far too many people make decisions based on emotion, yearning, and hope, rather than research, rationality, and analysis.

          And thank you, David, for all the hard work you’ve done to expose ASI. Even though it must be frustrating to see them continue to prosper, you’ve no doubt saved many from being suckered and having their money sucked by ASI and its PRH grifter parent.

  10. Phyllis Humphrey

    Thank you, David. Ive bought your books and recommend them to newbie authors as the substitute to ASI. Furthermore, I crossed those publishers – especially PRH – off my list. I’m even tempted to complain to authors who still publish with PRH and scold them for having anything to do with such an unethical company. Doesn’t the Bible warn people about the worship of money?

  11. David,

    Exactly what does the AS partner do? What specific actions does he take?

    Thanks

    • Hi Terence, I’m not sure what you’re asking. I talked about the different kinds of partners and their various roles in the piece. Let know what you are looking for specifically, and I’ll do my best to answer.

      • For example, do they simply forward a name and address, and then share in any revenue derived from that referral?

        Do they fund and manage the collection of potential clients for their imprint, or is that completely handled by AS?

        I guess I’m looking for the lower limit on their effort. How little can they do to get payment from AS?

        Alternatively, what is the most they would do?

        I see a possible path where publishers can make a huge return on a trivial investment of time and money. If we set aside the moral and ethical questions, I’m looking for how little they can do to get paid by AS.

        • David,

          Behind my question is speculation about competition.

          In general, one way a dominant firm can deal with competition and potential price pressure is by inviting potential competitors to join at prevailing prices.

          So, one can ask if a potential competitor is better off fully entering the market and offering real competition, or joining with the dominant firm and sharing the rewards of higher prices.

  12. This needs to be shortlisted for a Pulizter. Seriously.

    • Stephen Gradijan

      According to wikipedia: The Pulitzer Prize is an award for achievements in newspaper and online journalism, literature, and musical composition in the United States.

      He is Irish and lives in the Czech republic according to his amazon bio. I don’t know where his blog is considered to be domiciled, but it looks like he doesn’t meet the US-centric requirements.

      Edit* It occurs to me that perhaps his blog is domiciled in the US. At a minimum that would be logical for him for libel reasons. In the US the burden of proof is on the accused, while in lots of other countries the burden of proof is on the accuser.

      • @ Stephen

        Uh, I think you’ve got accused and accuser reversed here. In the US, the burden of proof is on the plaintiff. “So, sue me!” is a viable strategy here. Not so in the UK, I understand.

  13. Let’s hope these sainted publishing bigwigs get nailed in court.

  14. monetized the mush pile… mush-a-pied, the money pile, more likely– meaning flat out smoke and mirrors.

    There’s an old fellow named, let me think, lol, Im old too but not as old as he is… he’s a telly-preacher… ah, Swindoll, maybe Charles first name, who runs a ‘christian’ publishing co JUST LIKE Author Solutions. Wonder if he is also part of AS.

    And Hay House the new age joint partnered with author solutions? I never knew. That’s low for a company that supposedly prides themselves on ‘spirituality’ and living ‘the balanced life of ethics, etc’, no?

  15. I find it disgusting in particular that Hay House which should be worthy of respect and Penguin which, when I was published by them was worthy of respect are both involved up to the eyebrows with Author Solutions. I wonder if Louise Hay knows?????

    • This is the publishing industry. They are all very nice and polite and “worthy of respect” – unless there is a dollar to be made.

      • David, I just want to say thank you for keeping an eye on AS. You are great.
        When I have shared the blog post on my facebook page, FB showed me a link to: https://emilysuess.wordpress.com/ It’s some interesting reading, too bad that the blog isn’t active anymore.

    • Louise Hay is a shrewd old woman who has given Reid Tracy, her ceo, a substantial share of Hay House. I wouldnt ever see Hay as naive or Tracy either. Very shrewd, both.

    • Christine, I have wondered that, as well.

      Personally, it taints everything Hay House does, for me.

  16. I have a friend who dreams of getting books published. And she somehow got on Balboa Press’ target list (yes, the Hay House one). The one thing that kept her from signing up was the cost. They still call her at least twice a week.

    When I told her what I spend on one book I self-publish, she almost fainted. She had no idea it could be so much less. (Less than a 10th of what she was quoted.)

    She’s smart. She knows advetising. But she didn’t know where to look for better information on self-publishing. She used to be in New York circles, and maybe that’s what drew her to publishing houses.

    I’m just glad I could talk to her about that. One more saved, I hope.

  17. David Gaughran’s post needs to be shared over and over again. These “self-publishing” services from Big Name publishers are just horrible. In my day job, I work as a publicist and recently worked on a publicity project for a woman who contracted to have her book published by Westbow. She paid a total of over $10,000 to have her book lightly edited, printed with errors on the cover twice, and then given no PR push whatsoever.

    These scams aren’t just attracting naive little old ladies. My client was a college professor and licensed counselor and the nonfiction book she’d written had a lot of merit. She could almost certainly have sold her book to a small university press, and while it would not have made a significant profit for her, she would not be out a small fortune. She chose to “self-publish” because she thought the process would be faster and that she’d have more control over finished product. She trusted that as a division of Thomas Nelson/Zondervan, Westbow must be “legitimate” and that the fees they charged her were simply the normal expenses of the business. In fact, they had her convinced it would be much MORE expensive if she tried to go it alone. When she found out how little it cost me to self-publish my own books, she cried.

    I can’t tell you how angry these “self-publishing” cons make me, particularly since they’re being perpetrated by huge mainstream publishers who have no reason to do this. Surely it will only hurt their own image in the end?

  18. The way these companies work is horrifying. So many people get caught up in these sorts of things because they don’t know any better, and with trad pub pushing it, everything seems on the up and up.

    Good on David for keeping on these stories. Maybe some folks will find his blog and be saved from signing up for these “services”.

  19. A few weeks ago I went to the LA Book Fair held on the USC campus grounds, sponsored by LA Times. It attracts a big crowd, which is good. Well, Author Solutions (A.S.) had several tents, big publicity. It also gave the writers who published with them the ‘opportunity’ to have a table in a booth, for a few hours, and give their book(s) away for free to potential readers. The authors signed the copies as well. What a fantastic perk? Not.
    On the surface, getting a table even for a few hours in a $1,000 both with thousand of readers roaming the grounds seems to be a good deal. Maybe, if you’d sell your books, but this was all for freebies. So what’s bad about this? The authors were paying for the tables in the tent, a prorated cost I hope, and they also paid for the paper books they were giving away. Author Solutions probably told the authors that this was a promotional opportunity worth every penny. I used to think that way, but I wised up since then.
    I picked up a free book from a first time author, a vampire book. This author paid enough to A.S. for that table so they made a profit on her. A.S. printed her books, and she paid for them as well. More profit for A.S. I guesstimate that she may have paid $2,000 for the whole affair to gain audience. If she gave 500 to 700 books away, those books were claimed by A.S. as books ‘sold’ by her. And she probably was thrilled to spend $2,000 to have hundreds of readers read her book.
    The reality is completely different. I read the first few pages of her book and she was definitely a beginner. I doubt that she would have many people read it to the end. What’s worst, this was her first book, even if the readers liked her book there were no other similar books to buy from her. Who would remember her name in a month from now? You give books away for free as lost leaders to sell your other books. This was just a lost opportunity and loss of money.
    Author Solutions should know better than to take advantage of a naive first time author.

    • “Author Solutions should know better than to take advantage of a naive first time author.”

      That’s the only type they ‘can’ take advantage of — those that don’t know any better …

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