PhotobucketThis past year has seen significant and well-publicized developments for self-published authors. It’s probably not necessary to point out what the high-profile success stories are, but in case you need a reminder:

  • JA Konrath. Formerly a midlist author with a New York house, now a successful self-publishing author on Kindle, who earned at least $42,000 in January 2011 alone. [Read more here.]
  • Amanda Hocking. Started out self-publishing on Kindle, now selling 100,000 e-books per month, and considering a 7-figure deal with a New York house. [Read more here.]
  • Barry Eisler. New York Times bestseller, soon to be self-publishing on Kindle instead of taking a $500K deal from St. Martin’s. [Read more here.]

Guess what? Not a single one of these authors used (or will use) a fee-based self-publishing service. They’re also not depending on print sales or distribution. They are earning significant dollars from low-priced e-books that move in high quantities. You can read more about the mass-market e-book phenomenon from Mike Shatzkin. And if you think these 3 authors are the exception to the rule, then read this post from JA Konrath.

A lot of ink—real ink and electronic ink—has been spilled on whether publishing will die, or books will die, or agents will die, etc.

But what about the impact on fee-based self-publishing services? I’m thinking specifically of the ones that focus on print-on-demand books.

Let’s discuss the history of these services first.

Print-on-demand (POD) became popular in the early 2000s, because it made self-publishing more affordable and accessible than ever before. Print-on-demand technology allows books to be printed one at a time, only after an order is placed, avoiding the necessity for an author to pay big bucks for a traditional print run that probably sits unsold in a warehouse somewhere.

In a publishing landscape without e-books, a POD service can make a lot of sense. The costs are low for everyone since there’s no print run to pay for, and most inexperienced or new authors have no interest in learning to produce a print book on their own. A self-pub service package makes the headaches go away, and for not a lot of money, usually less than $1,000. (That $1,000 won’t get you a well-edited, well-designed, or well-marketed book, but I’m strictly addressing the friction of, cost of, and access to production/distribution.)

Right now, Author Solutions is the biggest self-publishing/POD service company in the world. Over the last decade, they’ve bought up the most significant competitors, such as iUniverse, Xlibris, and Trafford. Their growth has been astronomical and reported on by outlets such as the New York Times, Wall Street Journal, and Inc. magazine.

To keep growing their business, they’ve been soliciting and establishing partnerships with traditional publishers, to set up new self-publishing brands that they exclusively service, such as Harlequin’s Horizons and Thomas Nelson’s West Bow. They’ve also started an author education arm.

But this is appearing more and more like a huge scramble to squeeze a few more profitable dollars out of a service that is no longer needed, that is incredibly overpriced when compared to the new and growing competition, and has less to recommend it with each passing day, as more success stories come from the e-publishing realm where author royalties are in the 70-85% range. (An author typically earns less than half that percentage for royalties on a POD book.)

Furthermore, the cat’s out of the bag when it comes to the “value” of the package services you get from a fee-based company. Take David Carnoy of CNET, for instance, who plainly says:

Buy as little as possible … Self-publishing outfits are in the game to make money. And since they’re probably not going to sell a lot of your books, they make money by selling you services with nice margins. … Personally, I’d never work with BookSurge’s in-house editors, copy editors, and in-house design people. That doesn’t mean they’re bad at what they do. But if you can, it’s better to hire your own people and work directly with them. Ideally, you should be able to meet with an editor, copy editor, and graphic designer in person—and they all should have experience in book publishing.

Undoubtedly, service companies like AuthorSolutions can and will respond to this post by touting a range of success stories, and showing off beautiful books they’ve produced, but for how long can that save their revenue? What new or established author would pay for a service package when they read about the success of an Amanda Hocking or a JA Konrath, who have done exceptionally well without such help?

The answer is: No informed author.

That’s why today’s fee-based self-publishing company will be forced to change its service, the value of its service, and/or the price of its service—or otherwise become irrelevant (and die). Just how fast such services decline depends somewhat on how quickly e-books become the preferred format for a majority of readers.

Services like Author Solutions have reaped enormous profits from charging hundreds or thousands of dollars for their services, because until now, there wasn’t a viable or cheaper alternative for an author who wasn’t interested in learning the ropes of the publishing business.

We’re now reaching the point where fee-based services can stay alive only by banking on the ignorance of authors—not that they haven’t done so, to some extent, up until now!

But they can’t continue to charge the same amount for the same service that has decreasing value over time, not when Smashwords, PubIt, and Kindle charge zero. Not when Amazon’s CreateSpace offers POD services for next to nothing. Not when an author can now, more easily than ever, find and hire quality help.

There will always be some level of demand for full-service, fee-based publishing companies. But it’s now a mature business that has seen its peak, and that will sharply decline. Given the transformational changes taking place throughout the industry, very desirable industry professionals (agents, editors, many others) will find ways to offer high-quality services that can make a perceptible difference to an indie author’s book marketing and sales. And let’s not forget Amazon, Google, and Apple. And other tech-driven start-ups like Smashwords, Blurb, BookBaby …

See what I mean?

Want more insights on the self-publishing issue? Here are a few posts to get you started:

I’ll also be pontificating on the whole future of publishing in my own self-published e-book, to release on April 1, for $1.99. Stay updated here, or subscribe to my “3 Happy Things” newsletter.

Photo courtesy Flickr’s aussiegall

About Jane Friedman

Jane Friedman is the co-founder and publisher of Scratch, a quarterly magazine focused on the intersection of writing and money. She teaches digital publishing and media at the University of Virginia and is a full-time publishing consultant. Find out more at her website.