The Case Against Author Solutions, Part I by David Gaughran

If you are unfamiliar with the writings of David Gaughran, you should remedy that omission at once.

I have been a fan of his work in the digital arena since he first published Let’s Get Digital a few years ago. His follow up book, Let’s Get Visible, is also a work every Indie author should study. Please take a  moment to visit David’s author page on Amazon and check out his body of work.

David Gaughran
David Gaughran

However, the topic today is a recent post of David’s entitled The Case Against Author Solutions Part I.  The blog ran initially on David’s site (click here to see the blog on his site.) I ran across it on Thursday of this last week, and contacted David about running it on Venture Galleries. He was kind enough to grant me permission to run it in its entirety.

So without further ado, here is David’s blog.

The Case Against Author Solutions, Part 1: The Numbers

Posted on June 3, 2014, by 

authorsolutionsPRH

 

The more you study an operation like Author Solutions, the more it resembles a two-bit Internet scam, except on a colossal scale.

Internet scammers work on percentages. They know that only a tiny fraction of people will get hoodwinked so they flood the world’s inboxes with spammy junk.

While reputable self-publishing services can rely on author referrals and word-of-mouth, Author Solutions is forced to take a different approach. According to figures released by Author Solutions itself when it was looking for a buyer in 2012, it spent a whopping $11.9m on customer acquisition in 2011 alone.

This money is spent on:

I could fill ten posts on the various deceptive ways that Author Solutions gets customers, but the idea should be clear enough. The sum of all these efforts is an impressive number of leads: in 2011, Author Solutions managed to capture the phone numbers and email addresses of 475,000 writers.

Some complain that prospective customers of Author Solutions should do more research –caveat emptor and all that. This is a little unfair for three reasons.

  1. Quote from Phillips "All our marketing is permission based... and our website is very clear that we offer a range of imprints so we are not trying to deliberately confuse anyone."From an article by Alison Flood which will appear in the summer issue of The Author – the UK Society of Authors quarterly journal. Read it here.The deceptive practices outlined above.
  2. Author Solutions keeps launching new brands (20 at last count) with similar prices and practices, but without the internet baggage. This makes a mockery of Author Solutions CEO Andrew Phillips’ recent claim that “we are not trying to deliberately confuse anybody” (pictured right, and more thoroughly debunked here).
  3. Finally, it appears that most prospective customers do actually research the company thoroughly and step away. Out of the 475,000 leads, Author Solutions only converted approximately 5% into customers.

Now you can see why Author Solutions needs to adopt the spamming business model. It knows that if a prospective customer starts googling thoroughly, it is going to lose them – so it must work on a giant scale. And this is probably why they spend so much on Google ads and SEO – it certainly doesn’t want people scrolling through those search results and reading the horrific experiences that customers have had (and the class action the company is facing).

Author Solutions also needs to aggressively pursue new business because its existing customers don’t come back for more. According to figures released by CEO Andrew Phillips, Author Solutions and its subsidiaries have published 225,000 titles by 180,000 authors – an average of 1.25 titles per author. The lack of repeat business is in stark contrast to someone like Smashwords which has 310,168 titles from approximately 80,000 authors – an average of around 3.88 per author.

While it’s heartening to know that the writing community is reaching many prospective Author Solutions customers with its warnings, that 5% is still a significant (and lucrative) return.

Author Solutions sold 27,500 publishing packages in 2011 and, in the information sent out to attract a buyer in 2012, Author Solutions forecasted that the number of publishing packages sold to authors would increase to 30,700 in 2012, and to a staggering 49,015 in 2015.

These packages are widely considered to be massively overpriced compared to competing services but where Author Solutions really makes its money is in aggressively upselling a range of additional services to authors – not included in those expensive packages they first purchase. Most packages don’t even include editing, and this is the first area where sales consultants try and hit their internal targets (claimed in the class action to be $5,000 per customer).

When these sales consultants contact authors, they invariably claim they are calling from Bloomington, Indiana. I should note however that approximately 78% of its staff is actually based in Cebu, Philippines – including the sales and marketing departments. The actual location of Author Solutions staff is important for a number of reasons, not least ascertaining the English ability and editing qualifications of staff working on these books.

The class action goes into voluminous detail about numerous and repeated errors that were made at every stage with the plaintiffs’ manuscripts – and this tallies exactly with complaints I have received. I should also note that Author Solutions is currently looking for a copy editor for its office in the Philippines to edit customer manuscripts. It doesn’t require applicants to have an editing qualification of any sort, or even that English is their first language, merely a “strong background in English grammar” and “above-average reading comprehension skills.”

When customers come nearer to publication, sales consultants pivot to pushing various marketing packages. This is a small, but representative, sample:

If there is one thing that Author Solutions is actually competent at, it’s flogging these “services” to its customers. Again by its own figures, Author Solutions convinces its customers to spend an average of $5,000 each on publishing and marketing their book – several multiples of what it should cost.

I previously reported that Author Solutions made around $300,000 from selling book signing packages for the Toronto Word On The Street Festival in 2012, made over $500,000 from selling similar packages for the 2012 Miami Book Fair, and made over $900,000 from selling packages to sign copies at the 2012 LA Times Festival of Books.

I should note that these packages don’t include travel or accommodation costs. Authors receive some copies of their book to sign, and an hour signing slot. That’s it. To show how overpriced these packages are, an author could have purchased their own booth, for the entire duration of the Miami Book Fair, for just $1,000.

Author Solutions is constantly adding new marketing services, and is equally good at selling those. From its own figures released in 2012, Author Solutions generated $1.7m in 2011 by selling television advertising to its customers – a service only launched that year. Another new service that year was the launch of pitching services to “Hollywood executives.”

That brought in a whopping $3.5m from just 300 authors. According to Author Solutions, only 2 of those authors were actually successful in selling an option. In other words, Author Solutions convinced these writers to pay an average of $11,666 to pitch these “Hollywood executives” with a success rate of just 0.66%. How much those 2 authors made isn’t mentioned (nor are the “production companies” they sold rights to), but I should note that they could easily have earned less than they spent.

Author Solutions uses high-pressure tactics and emotional button-pushing to sell these wholly unsuitable, completely ineffective, and hugely overpriced marketing services to these inexperienced writers. The papers filed in the class action suit mirror the hundreds of complaints that I’ve received and read in this regard also.

The way it works is this. Just before Author Solutions publishes a customer’s book, it contacts them to tell them that they have been awarded a special designation by their editors, such as a “Rising Star” Award or “Editor’s Choice” Award.

As Author Solutions customers are generally inexperienced (it explicitly targets new writers), they don’t understand the meaninglessness of such an award, and it plays on their own doubts and fears about their work, and their desire for recognition. Which makes it easy for Author Solutions when it makes the receipt of such an award contingent on purchasing additional services.

The plaintiffs’ Second Amended Complaint in the class action goes into specific detail on this:

98. On June 2, 2011, Foster was informed that she had also received the Rising Star designation.

99. In a June 21, 2011 email, the Rising Star Board indicated that “[i]f you purchased marketing services or your marketing plan was based on services offered by iUniverse and you decide to cancel or do not purchase mentioned services indicated in your Rising Star Marketing Survey or to your Marketing Consultant, the Rising Star distinction will be removed from your title.” This email was the first time Foster was made aware of additional requirements to participate in the Rising Star program.

100. Foster’s Marketing Consultant confirmed that she was required to purchase a Marketing Package, and Foster purchased a marketing package for $3,999.00, since she did not wish to lose her Rising Star designation and she wanted to market her book aggressively.

I can also confirm that similar tactics were used by Author Solutions to push a whole range of overpriced and unsuitable marketing services on inexperienced authors in the complaints I have received.

Fleecing authors is an extremely lucrative business. Author Solutions generated revenue of $99.8m in 2011, and projected that would increase to $179.6m by 2015. A full 63% of this revenue – $62.87m – came from selling services to writers, pretty much an even split between publishing services and marketing services. By contrast, e-book sales only generated $1.3m. Let’s be very clear about what Author Solutions is: a very slick operation at squeezing money out of writers, and a terrible way to publish your book.

The numbers in the above paragraph come from a memorandum (reported here, first paragraph) circulated in early 2012 by its then owner Bertram Capital. That memorandum also contained all the reported information about the television advertising and Hollywood pitching packages.

And this was the information that must have convinced Penguin to purchase the company for $116m in July 2012. At the time, the writing community expressed shock at that move, given Author Solutions’ well-known history, and the long-standing warnings from watchdog bodies like Writer Beware.

Some expressed hope that Penguin would clean house, but all it has done is aggressively expand Author Solutions’ operations, with new imprints targeting Spain, Malaysia, India, and South Africa, as well as new white-label self-publishing services for huge companies like Simon & Schuster.

It was clear that Penguin knew exactly what it was purchasing. Companies don’t splash out $116m without doing a thorough check. John Makinson (Chairman and CEO of Penguin at the time), when announcing the purchase said, “We’re looking to upsize not downsize. There are no plans for layoffs, this is an opportunity for growth.”

Penguin’s name also lends credibility to Author Solutions, and its sales consultants have dangled the prospect of Penguin picking up customers’ books. One writer who published with Xlibris (an Author Solutions company) relayed the following:

They told me that with Penguin buying them they could, basically, guarantee that Penguin would look at my book and because it was so good (she’d read the first couple of pages) they would definitely pick it up.

Needless to say, Penguin did no such thing.

The Penguin Random House connection has more recently been used to flog those terrible services described above. In this email from an AuthorHouse consultant (another Author Solutions company) to a customer, AuthorHouse is described as the “self-publishing wing” of Penguin Random House, and that this corporate relationship has enabled them to now offer YouTube advertising (at a price to this customer of $3,400).

Penguin Random House Author Solutions Email

In my next Author Solutions post – The Case Against Author Solutions, Part 2: The Partners – I will have new information on the various partnerships that it has built up with supposedly respectable companies in the publishing world, and I’ll share how the fight against Author Solutions is finally turning the tide.

But before I go, let me share some further quotes from John Makinson – now Chairman of Penguin Random House since the two companies merged in July 2013. Here’s more of what he had to say about Author Solutions when gleefully announcing the purchase:

“We spent time getting to know the people at Author Solutions and their sophisticated operation,” Makinson said“They have skills that can help us at Penguin.”

 

[Again, my thanks to David for allowing me to run this article, SW]

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  • Caleb Pirtle

    Stephen, they prey among us, both the large and the small.

    • Beginning authors are often desperate for recognition – ANY recognition. I briefly considered things like that myself – way back.

      But the one thing I was always sure of: in (traditional) publishing money was supposed to flow TO the author, not in the other direction.

      It helps to be a cheapskate. And a skeptic.

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