Author Solutions and Friends: The Inside Story Bewares

ASandfriendsweboptAuthor 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.

You may not have heard about this second class action as most of the media felt it wasn’t worth reporting – even the trade press like Publishers Weekly and The Bookseller – but you can peruse the complaint here (PDF).

(Note: the lawyers representing the plaintiffs in both class actions are still looking to hear from anyone who has published with Author Solutions. You can do that here.)

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 on international 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.

Author Solutions “Partner Imprints”

If you haven’t encountered it before, the list of companies which Author Solutions has partnered with is pretty shocking. Some of these relationships are listed on the Author Solutions website, but others are hidden – even from customers using those services.

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.

In addition, Author Solutions customers often don"t know that all these imprints are being run by the same company, along with a large collection of its own in-house imprints – which Author Solutions refers to as “Core Imprints” – such as iUniverse, Trafford, Palibrio, AuthorHouse, BookTango, WordClay, and Xlibris (a partial list).

The damage these partnerships have caused goes far beyond customer confusion. Let’s take a closer look at how they work.

How Publishing Partnerships Work

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.

ASPublisher

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.

MotionToCertify2

In March, a whole cache of documents was released into the public domain as part of the discovery process in the original class action against Author Solutions – primarily depositions of Author Solutions executives. (You can read those here and here – both PDFs.)

Mick Rooney has been patiently going through the documents and transcribing them (Part 1, Part 2, Part 3). It"s really eye-opening stuff, especially regarding how these partnerships with publishers work.

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.

Author Solutions Internal Quotas Revealed

Author Solutions’ sales reps have tough internal quotas that they have to meet every month. Their performance is not measured in things like customer satisfaction, or whether the marketing packages sold to customers actually have any effect in improving book sales. Instead, they are measured purely on the dollar value of products they upsell to customers – regardless of the quality of the book, the suitability of the customer, their ability to pay (Author Solutions offers payment plans), or the expected result.

In fairness to Author Solutions, these marketing services would be ineffective for any self-publisher – something which seems to be clear to everyone except for Author Solutions. If the depositions are anything to go by, it seems that Author Solutions’ defense is going to be that these marketing services aren’t designed to increase book sales, so they never checked whether they actually have that effect.

(I’m not kidding, that was the line pedaled by successive executives in the depositions. Of course, even if you take this claim at face value, this is not how these marketing packages are pitched to authors.)

The quota numbers were redacted from the depositions when they were made public, but I can reveal them for the first time – courtesy of a Penguin Random House source. The figures below are in US dollars, and these are monthly targets.

  • Publishing Consultant, Core Imprint: $20,000
  • Publishing Consultant, Partner Imprint: $40,000
  • Marketing Consultant, Partner Imprint: $60,000
  • Book Consultant: $75,000

You will notice straight away that sales reps working for the Partner Imprints have much higher targets – and this is to cover the royalty the partner receives for each product sold. In practice, this means that sales reps working for Simon & Schuster’s Archway imprint will have to sell much more crap, at higher prices, and writers using Archway will be subjected to even more squeeze. (Thanks, Simon & Schuster!)

The rest requires a little explanation.

Publishing, Marketing & Book “Consultants”

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. Publishing Consultants can (and do) also sell marketing packages, but their primary focus is on selling the most expensive publishing package they can. Publishing Consultants for Partner Imprints are expected to sell $40,000 worth of packages every month.

The next batch of sales reps that an author will deal with are the Marketing Consultants, and this usually happens when the book moves to the design stage. Again, the only metric Author Solutions cares about is the total dollar value of marketing packages sold, and the target for Marketing Consultants is $60,000 a month.

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. Book Consultants have very aggressive targets here – a staggering $75,000 a month.

Despite being called Publishing Consultants, Marketing Consultants, and Book Consultants, these employees are sales reps, usually with no experience in publishing, marketing, or book production. The complaint in the second class action has more on that:

Author Solutions aggressively sells publishing and marketing services (“Services”) to its Authors through a large sales force of telemarketers, largely based in the Philippines, who introduce themselves as the Author’s personal “Publishing Consultant” or “Marketing Consultant.” This has the deceptive effect of leading Authors to believe that the “consultant” has a background in publishing or marketing and has the requisite skills to guide the Author through the publishing process. In fact, these “consultants” are simply commissioned sales people with aggressive quotas who are not required to have any publishing or marketing experience. Author Solutions never discloses this fact to Authors.

AS Sales Rep adTo illustrate the point, on the right is a recent job posting by Author Solutions for sales reps, which you can click to increase the size.

Note that experience in marketing, publishing, or book production isn’t a requirement for applicants, but being “money-driven” is.

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.

The Power of One

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.

I have spoken with a number of former Author Solutions employees over the last few months and they all shared similar observations. As long as sales reps are hitting their quotas, they are treated well by Author Solutions – rewarded with commissions, trips, expensive dinners, and, when the end of the month approaches, they are provided with breakfast, lunch, and dinner so they can meet their quotas.

But if sales reps don"t meet their quotas, it"s a different story.

One former employee told me that the sales reps had “an insanely high turnover rate” and that “watching one of them escorted from the office became a weekly event.” Still, they are treated better than the staff who actually work on the books – after the sales rep has moved onto the next “victim” (the actual word used by one former employee).

Production/design staff are, in general, poorly paid and badly treated. Not only do they have unrealistic targets and don"t feel they can devote the necessary time to produce quality books, they also have to clean up the mess created by the reps – who often promise things the production teams can"t deliver (anything to hit that quota, I guess).

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.

Howdy, Partner!

Aside from publishing partners, there are all sorts of other partnerships which Author Solutions has created. For example, Penguin-owned Book Country has a Lulu-like deal with Author Solutions which allows it to upsell worthless packages to BookCountry users, and the Authors Guild has a long-standing partnership with iUniverse, an in-house Author Solutions imprint.

In addition to that, all sorts of companies provide products to Author Solutions which are then re-sold at a crazy mark-up – usually advertising space, but often other things like book signings at literary events, or book display services at industry conferences. Again, this is only a partial list, but these companies/events/conferences include:

  • The Guardian Weekly
  • Baker & Taylor
  • Miami Book Fair International
  • New York Times
  • Women of Faith Conferences
  • The Bookseller (relationship terminated in 2014)
  • Kirkus
  • The Combined Book Exhibit
  • Word On The Street Festival Toronto
  • Publishers Weekly
  • International Christian Retail Show
  • Library Journal
  • MindBodySpirit Festivals
  • ForeWord
  • LA Times Festival of Books
  • Bowker (relationship terminated in 2013/4)
  • New York Review of Books
  • Hay House “I Can Do It!” Conferences
  • Alfred Hitchcock Mystery Magazine
  • Reader"s Digest
  • Bay Area Book Festival
  • Clarion
  • AARP National Event & Expo
  • London Review of Books
  • Ingram
  • Ellery Queen Mystery Monthly
  • Tucson Festival of Books

Together with the partners listed up top, it"s clear that Author Solutions has developed relationships with a staggering list of publishing companies, conferences/events, and media organizations.

These partnerships don"t provide any real value to Author Solutions customers. Their true role is to deliver fresh meat to Author Solutions, and to expand the range of worthless products they can upsell. And the media links in particular seem to have protected Author Solutions from any criticism in the press.

The Curious Case of the Penguin Omerta

I"ve contacted most of the companies/events on this list at various points over the last few years of campaigning. Only one – The Bookseller – decided to take action and terminate its relationship with Author Solutions. The rest either refused to comment, or defended their partnership.

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. It would be interesting to know if they have similar partnership arrangements in place to the publishers mentioned up top, and receive royalties from sales of these ad packs.

And you wonder why it’s so hard to get them to cover the Author Solutions story.

Obviously, having a financially lucrative partnership with Author Solutions acts as a strong disincentive 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. And if you don’t believe that Penguin Random House would pressure the media into dropping such stories, then you really need to learn a little history.

The final twist in this particular story will test the reader’s credulity. The CEO of Penguin Random House – Markus Dohle – will receive a PEN Award next week for, among other things, “resisting censorship” and “promoting reverence for the written word.”

The Executive Director of PEN, Suzanne Nossel said the following:

Penguin Random House has been among PEN’s most stalwart supporters, with a history of resisting censorship and promoting reverence for the written word. Markus Dohle’s passionate leadership has helped galvanize an industry amid transformation, bringing energy and vision that are fueling reinvention in a dynamic and fertile new era of literary creativity.

I think they shortchanged him a bit. I would have gone for a statue.


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