Wednesday, September 19, 2007

New Model Army of Self-Publishers

The news that Author House and were merging was not entirely unexpected, but it is interesting to me that the publishing community basically ignored the event. While it was reported in Publisher’s Lunch and Publisher’s Weekly, the report in PW focused on the question of job cuts which may reflect a limited interest in the strategic ramifications this segment poses to mainstream publishers. Led by, this publishing segment is exploding and the last thing being considered will be job cuts. Just look at the capabilities on offer at Lulu. Author House and iUniverse complement each other: A number of years ago, made the strategic choice to add an extensive selection of professional editorial services to their suite of services, which surpass the service offered by Author House (and others in the market). Tactically, I think the two companies will slot together like jigsaw pieces.

Random House has a relationship with Xlibris and is alone among the major publishing houses in building formal relationships with the self-publishing marketplace. I would expect other major publishers to jump into this space, in the short-term, through acquisition. The leverage these companies achieve over their technology, employees and fixed expenses, the processes they have established and the market they have built make these companies appealing. Ironically, there is a ‘democratization of access’ underway in publishing, which to date, most “publishers” have not participated in; but, this will change as traditional publishers look to the self-publisher market as a natural product extension.

In the case of Author House and, they each produce over 5,000 titles per year with total staff of approximately 100. In terms of titles per month and titles per employee, they shame a traditional large publisher. Everyone will argue that the quality of the content produced by self-publishers is poor, but this is no more true than the statement that all content produced by traditional publishers is exemplary. How often has a traditional publisher invested significantly in a title’s success only to watch it sell 300 copies? For the self-publisher—with an author pays model, no inventory and no promotion expense—there is only upside if a title takes off unexpectedly (and sells 300 copies).

I am not suggesting that the self-publishing business model will be adopted anytime soon by a major publishing house, but there are lessons to be learned from the success that the self-publishing industry has built in the last 10 years. Enabling technology has produced this ‘democratization of access’ and, while it is hard to imagine that there is that much content to produce, the numbers prove the case. Lulu is producing 4,000 new titles per week for a total of 300,000 newly released titles, Author House has over 30,000 authors and 40,000 titles, and iUniverse says they have sold over 5mm books.

Amazon has invested in this area (B&N is getting out via and I see some convergence between the traditional publishing model and self-publishing. The content quality issue is irrelevant: Firstly because good content will always find its market and Secondly, because quality in the self-publishing segment depends not on the content but the service the author received. Get ready to see traditional publishers adopt some of the practices of the self-publishing industry.


Mike Shatzkin said...

I don't often disagree with you, but the comment that good content always finds its market is well wide of the mark. And while the employees per title math is quite interesting, since publishers have far more people helping the content (good and bad) find its market than it does creating or shaping the content, one can question how far the comparison takes you.

But that comment does not detract from an interesting and insightful post. Indeed, the lines between author-paid and publisher-paid are going to be blurring. And the more efficient processes engineered by the author service companies will, indeed, find their way into the mainstream. At least in part.

Anonymous said...

I think you are right. Further consolidation of the POD industry is inevitable. Now that Amazon has launched CreateSpace (which is essentially a "lulu-killer" - and Bob Young hasn't been able to pull of an IPO yet, Lulu may be looking for some salvation, since there is no chance they are currently profitable, given their business model. Random House's "relationship" with Xlibris is nothing but lip-service, the two entities operate completely separately of one another, but there's little doubt that name-dropping a big publisher name on Xlibris' POD site helps from a marketing point of view.

PODdy Mouth