Pearson acquires authoring solutions from self-publishing vendors for $116 million
In a move dating back to last year’s launch of Book Country, Penguin’s writing community and self-publishing business, Pearson acquired Author Solutions Inc., one of the world’s largest self-publishing companies. -publishing in the world, for 116 million dollars with Bertram Capital. . In a conference call from ASI’s headquarters in Bloomington, Indiana, Penguin CEO John Makinson and ASI CEO Kevin Weiss said the deal marks the “mainstreaming” of self-publishing, will provide Penguin with “evolving” data and self-publishing expertise. and provides opportunities for global growth and wider distribution to selected ASI authors through Penguin’s channels.
Last year, Penguin was the first conventional publisher to launch its own self-publishing service, Book Country, and they followed that historic venture with the acquisition of Author Solutions, a self-publishing company with about 1,600 employees, sales just under $100. million in 2011 and which has published nearly 200,000 books by more than 150,000 authors in paper and e-book format. The company has a net profit of $4.2 million a year. Author Solutions also partners with around six other houses, including Thomas Nelson and Hay House, to provide ‘white label’ self-publishing services. Makinson and Weiss said these ASI partnerships will continue. This winter, Bertram Capital began looking for a buyer for ASI.
Responding to questions from the offices of Author Solutions, Makinson said “there is no other acquisition like this with ladder systems behind it.” Makinson also said there would be no layoffs. “We are looking to increase our workforce, not reduce it. There are no redundancy plans, this is an opportunity for growth,” he said. Weiss said they wouldn’t change the name of Author Solutions, “the brand won’t change but we have time and we’ll decide what makes sense.”
Citing his own launch of Book Country, Makinson said Penguin is watching the self-publishing market “with growing respect and admiration”, noting that “we are trying to keep pace”. Makinson said, “It became more professional and added more value for writers and readers.” Makinson pointed to the growing number of self-published writers like EL James and Amanda Hocking, “self-publishing is growing and converging with traditional publishing. It’s a big market and it’s not uncommon for self-published titles are on bestseller lists.
Weiss will report to Makinson, who said the two “want to develop a comprehensive strategy and quickly identify new opportunities” in the self-publishing category. “We would like the people of Hudson Street [Penguin headquarters] visit Bloomington and learn, but we’re just in the early stages,” Makinson said. Weiss also broke down Author Solutions’ revenue, noting that of the approximately $100 million the company generated last year, 1/3 came from publishing services, 1/3 from marketing services and 1/ 3 distribution or sales of books to consumers. Author Solutions represents an almost conventional form of self-publishing that requires a fee, unlike the rise of free e-book self-publishing sites like Lulu.com, Amazon.com and others. When asked if Author Solutions could compete, Weiss pointed out that ASI has its own free services, noting Wordplay, a “lulu-like system”, noting that “we are competing more than ever with free options and I don’t see any cannibalization of our market. We haven’t seen any pricing pressure so far. Every writer has different needs.
Makinson cited ASI’s expertise in “managing data analytics, online marketing and user-generated content,” while Weiss said, “Penguin handles distribution and conservation”. Makinson said, “At first we didn’t understand rich consumer data, but now we’re in the data analytics business and ASI will give us a big boost with data analytics and marketing. on line. We access real scale, hundreds of thousands of clients and authors, and the ability to analyze in a large database.
And while Weiss said ASI hopes to be able to move selected self-published authors to Penguin lists, he stressed that “there is no commitment” on this point from Penguin. Asked if there were any concerns about the acquisition of a self-publishing company hurting Penguin’s reputation for editorial selectivity, Makinson said, “There is no worry. Penguin is associated with selection and editorial standards and although Author Solutions uses different filters, they allow more writers to find more readers. We will work to ensure our audiences know what they are getting.
Weiss and Makinson also pointed out that Author Solutions will continue to partner with other publishers, offering “white-label” self-publishing capacity for hire. “We didn’t want to sever our partnerships,” Wiess said, explaining that “we separate all of our businesses with large fences from other footprints and don’t mix leads. We have the security of our data and give the assurance to our partners that it is separated from our other footprints. We do not share information with our parents.
Weiss likened the acquisition to the impact of IBM’s entry into the personal computer market in the early 1980s, “it’s like that, a stamp of approval for the self-publishing industry “. Makinson said, “We’ve spent time getting to know the folks at ASI and how sophisticated they operate. They have skills that can help us at Penguin. They are moving globally and we can support that. It’s a natural convergence that expands our publishing and gives readers more choice. As Kevin says, now is the best time to be an author.
