http://indiereader.com/2012/07/pengu...iting-writers/
Penguin’s New Business Model: Exploiting Writers
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What does Author Solutions bring to the table? Well, for starters, around $100m in annual revenue. Roughly two-thirds of that money comes from the sale of services to writers, and only one-third from the royalties generated by the sale of their books.
Pause for a moment and consider that statistic. Penguin isn’t purchasing a company which provides real value to writers. They are purchasing an operation skilled at milking writers.
. . . .
For example, Author House will provide you with a “web-optimized press release” for the bargain price of $1,199. In case it isn’t obvious, you would likely receive greater promotional value from setting fire to that money on YouTube.
. . . .
Before they leave the clutches of Author Solutions, however, writers are subjected to never-ending phone calls hawking a string of overpriced, useless services, including the press releases described above. As such, the average customer spends around $5,000 over their “lifetime” with the company,but only sells 150 books.
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