The quick and the dead

Earlier this summer, a pre-merger Penguin announced that it had agreed to acquire Author Solutions, one of the larger firms in the self-publishing market. At the time of the deal, Penguin’s John Makinson observed:

“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.”

While I understand how a traditional publisher might use a self-publisher as a kind of farm team, mixing a trade business with an author-facing model is a risky move. An established business tries to get the new one to follow the trade model, while the author market asks what value the established player brings to the party.

Both of these things had already happened to Penguin with the launch of BookCountry. Rather than compete as a self-publishing service, BookCountry tried to fill Penguin’s existing pipeline with self-published eBooks. To make that happen, it had to take a 30% cut of the 70% margin companies like Amazon were already offering these self-published authors.

Over a year ago, reaction was swift and direct. Author David Gaughran told paidContent’s Laura Hazard Owen “There is no justification for taking an ongoing fee in the form of 30 percent of the author’s royalties. That is, quite simply, gouging.”

So I found myself scratching my head again when Simon & Schuster announced last month that it had partnered with Author Solutions to market pretty much what BookCountry offered in 2011. Announcing Archway, the new imprint, CEO Carolyn Reidy said:

“Self-publishing has become a viable and popular route to publication for many authors, and increasingly a source of content for traditional publishers, including Simon & Schuster. We’re excited that we’ll be able to help more authors find their own path to publication and at the same time create a more direct connection to those self-published authors ready to make the leap to traditional publishing.”

Sounds familiar, doesn’t it?

In a post that appeared the day after the annoucement, romance writer Nadia Lee put it quite plainly: “No matter how S&S tries its best to package it as 'self-publishing' it is a vanity publishing venture, designed specifically to make profit by taking money from authors, not selling books to readers.”

This is going to keep happening, because trade publishing and self-publishing are two different businesses. Nestle a self-publishing unit inside a trade publishing business and it will try to make money by selling authors access to … the trade. If it can’t do that, it will charge fees that are seen as “taking money from authors.”

This is the nature of disruptive change. You have to fund the very businesses that may kill you, and you have to manage them as two different businesses. Synergy rarely exists; competition almost always does.

Splitting businesses and running them separately is a model that Indigo got right when it created (and later sold) Kobo. Publishers that buy and build self-publishing imprints inside traditional businesses are likely to find that neither the traditional nor the disruptive models succeed.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.