Just as Thomas Nelson did about a month ago, Harlequin has announced it is partnering with Author Solutions, Inc. (ASI) to form a self-published books imprint. This new imprint is called Harlequin Horizons (HH), and according to a Harlequin press release:

Through this strategic alliance; all sales, marketing, publishing, distribution, and book-selling services will be fulfilled by ASI; but Harlequin Horizons will exist as a division of Harlequin Enterprises Limited. Harlequin will monitor sales of books published through the self publisher for possible pick up by its traditional imprints.

So in other words, they’re basically just lending the Harlequin name to ASI for use in providing the same services it already provides via such vanity and subsidy outfits as AuthorHouse, AuthorHouse UK, Inkubook, iUniverse, Trafford, Wordclay and Xlibris. Some of these outfits have raised both hackles and eyebrows over at Writer Beware!

Right in its press release announcement, Harlequin makes it clear that their involvement here is strictly limited to lending their name and monitoring sales, every other aspect of the publishing process for HH, from editing to marketing, will be handled by ASI. But wait, that’s not entirely true. There is one other area where Harlequin will be involved in the HH process: “acquisitions”.

First, Harlequin will refer authors whose manuscripts they reject to HH. Second, Harlequin will monitor sales of HH titles with an eye to re-publishing any big sellers under the Harlequin imprint.

This new HH imprint clearly has the potential to earn Harlequin a lot of money, given that they will be taking a cut of ASI’s proceeds on every HH publishing package and service bought by self-publishing authors. Given that HH standard publishing packages range in price from US$599 to $1599, and HH “VIP” publishing packages run from US$2299 to $3499, there’s most definitely gold in them thar hills.

Compare these rates (and services) to those on offer from Xlibris, iUniverse, Author House or any of the other subsidy/vanity outfits working with ASI, and you can easily see there’s nothing special or unique about HH. The services and pricing offered are on par with what you’d get going through any of ASI’s other outlets for self-publishing, and since ASI is actually handling the pre-publishing work, publishing, distribution and even marketing (assuming the author elects to pay for these services), you’re getting the same product as well. The only difference with HH is its affiliation with Harlequin and the implied promise that self-publishing through HH gives your book higher visibility among Harlequin editors—which carries the implied promise that your self-published HH book is more likely to be picked up by Harlequin for regular acquisition. While I’ve always warned indie authors away from subsidy and vanity publishing, I have an even greater concern with this new wrinkle. 

For those of you who are wondering why I advise against working with a subsidy or vanity press, the reasons are numerous but primarily boil down to an economic argument. Such outfits are notorious for their high-priced “publishing packages” which bundle together all manner of services plus one to two dozen “free” author copies of the finished book, depending on the package selected. Very often, the author must sign away some or all of her publication rights to the vanity/subsidy outfit for a set period of time as well.

The bundled packages are bad news because you’re limited to working with their staff editors and designers (as opposed to hiring your own individually, to ensure their skills and working styles mesh well with your project), they typically include (and charge for) services you don’t want or need, and also typically overcharge for products and services you can obtain on your own at a fraction of the cost, or even for no cost at all. For example, as of this writing it costs $35 to register a U.S. copyright online; HH/ASI charges $204 for this same service. That’s a 583% markup, and all HH/ASI is doing is taking information you provide them for filling out the form, then filling out the form for you. Why not just provide your information to the U.S. Copyright Office directly and save yourself a fast $169?

You can bet you’re overpaying for virtually every service offered by HH/ASI, because there are two layers of middlemen with their hands out: ASI and HH. Even if you’re the type of author who would rather pay someone else to get your book ready for print, published, distributed and marketed, does it really make sense to pay both the actual service provider and a “services packager” like HH, iUniverse, Xlibris, etc.?

Here’s where my second major objection to the Harlequin deal comes about: self-publishing authors are being led to believe that they’re actually getting something of value in exchange for paying the HH layer of middlemen, and they believe that “something” is greater visibility, a greater chance of having their self-published book plucked out of the great unwashed masses of self-pubbed books for the full Harlequin treatment. But here again, they’re paying for something they can already get for free.

If your self-published book is selling in great enough numbers to garner the attention of a mainstream publisher, it doesn’t matter how, or through whom, you self-published. The mainstream will want to acquire the rights to your book. Having published via HH doesn’t make this outcome any more likely than if you’d self-published through Lulu, Createspace, Lightning Source or elsewhere.

You may be protesting that per the quoted press release, “Harlequin will monitor sales of books published through the self publisher for possible pick up by its traditional imprints,” but this is a paper tiger at best. Among the likely thousands of titles to be released under the HH imprint, perhaps the top 10% in terms of sales would merit further attention from Harlequin staff, and even then, only if the top 10% are selling more than a couple hundred copies a year.

You could publish via any author or publishing services provider, save yourself a LOT of money by being a smart shopper and not paying for services you don’t need or for which you’d be overcharged by HH/ASI, then invest some of your savings in the distribution, marketing and promotion options that make sense for you and your book, and sell as many (or more!) copies as you could sell of the same book published under the HH imprint. Self-published books that sell well attract publisher attention regardless of who published the book, or how.

If it’s really worth an extra 500% in fees to get an HH logo on the spine of your book, knock yourself out. But I’d argue that if that’s your position, you’re not a very savvy self-publisher.

UPDATE: THIS JUST IN (to me, anyway) – yet another reason not to go with HH is this: in addition to all the upfront fees you must pay for HH to publish your book, they also intend to keep 50% of your net royalty on every copy sold (scroll down to comment #18, in which Harlequin Digital Director Malle Vallik says so)!! 50% of gross would be exorbitant since the standard bookseller cut is 40% of the retail price, but 50% of net is simply beyond the pale. And if you’re handing over 50% of your net royalty AFTER paying HH hundreds or thousands of dollars for its services, that’s just financial rape. Without even buying you dinner first.

Just in case that comment #18 from Harlequin Digital Director Malle Vallik on Dear Author should become unavailable at some point in the future, I’m copying and pasting it here:

1. Will rejected submissions to Harlequin indeed be “informed” that they can “opt-in” to Horizons? How do you assuage the stated concerns that this is a predatory process?

Malle: A writer receiving a standard reject letter will find a line included about self publishing. The writer, if she wants, can then contact HH. The writer will never be cold-called or contacted unless she has opted in.

2. Will Harlequin Horizons hold the ISBNs and pay out royalties from the sales, if any? How does this differ from the “vanity press” model? How does it compare to the “self-publishing” model, in which the author holds the ISBNs and keeps all money from any sales?

Malle: The content is completely owned by the author. Royalties are 50% net from both eBooks and print. [emphasis added]

3. If an author chooses to go to Horizons for a “keepsake” or a “gift”, what does Horizons offer (except for the Harlequin name) to distinguish it from much much cheaper services such as Lulu?

Malle: It is any writer’s choice as to what self-publishing option she choses to purchase or if she wants to self-publish at all.

4. If an author chooses to go to Horizons, do they lose “first publication” rights? How will that affect any effort to gain an agent or traditional publisher with their “bound copy”?

Malle: I’m not sure I completely understand this question. The author owns her content. How would she lost first publication rights? She has published it herself. Whether she is giving it away as gifts or marketing it, is up to her. Yup, clearly I don’t get your question.

This post, from Mike Shatzkin, originally appeared on the Idealog blog on 11/14/09, and is reprinted here in its entirety with his permission.

I had a lunch conversation this week with three successful literary agents, who will remain anonymous for this post. They wanted to talk about the panel we’re having at Digital Book World called “The Changing Author-Agent Relationship: How Will It Affect the Business Model?”

That panel was born when I engaged an agent last summer with my observations about digital change and tried to recruit her to join a panel discussion about it. “Suppose you work with an author to develop her manuscript so your creative input becomes part of the work. Then you can’t sell it, or you get only a token offer for it, and the author wants to self-publish. Shouldn’t you, or any agent in that spot, be entitled to something in that case?”

The agent, sensing quickly that I was going to a model of “author pays agent for consulting help” said, “I can’t participate in a conversation like that. We have a canon of ethics in the AAR, and that might well run afoul of it.”

As it turns out, the canon of ethics of the AAR only explicitly prohibits agents from charging “reading fees” to prospective clients. Other charges are explictly permitted, such as for xeroxing and messengers. And others, such as consulting on self-publishing options, aren’t mentioned.

But, still, the question of whether the business model needs to change remains. The kind of book advances that agents have made a living on for years are diminishing in number. And now that self-publishing is legitimately part of the commercial continuum, authors have a right to expect that their career business manager, which an agent is, will employ it, or suggest that they do, when it makes sense. And agents will have a right to expect to be paid for that.

Of course, that’s not what these three successful working agents do. Their business assets are their personal knowledge of and relationships with acquiring editors; their ability to shape a writer’s concept and proposal into a commercial book; their knowledge of the ins and outs of book contracts and publishers’ accounting procedures. Exploring and keeping up with the various print and electronic self-publishing options: starting with Author Solutions and Smashwords, but including many others including our client Bookmasters, lulu.com, and many others, is a fulltime job in itself. (There’s a string started on Brantley’s list today by Joe Esposito who noticed announcements for four new self-publishing startups in his email in the past few days.) And searching out the authors with the money to self-publish, let alone to pay for advice on how to do it effectively, is also not what the successful agent in the current marketplace does.

I had spoken at a Writer’s Digest conference two months ago and told aspiring writers “get an agent” but also, “make sure the agent knows about the self-publishing options.” These very professional and desirable agents did not. But they agreed that when ten or thirty or fifty times a year a project they’d developed goes off for self-publishing, they’ll want to have a way to monetize that. We agreed that the likely solution will be an alliance with somebody who perhaps positioned themselves more as a “consultant” to aspiring authors. There is no shortage of such people.

The conversation turned to contract terms, particularly regarding ebooks. The agents asked me: “don’t the big trade publishers see that the strategy of paying authors half or less of what many ebook publishers will pay on digital book royalties isn’t sustainable? that we’ll end up splitting those deals?” I told them that I had raised this point with Big Six CEOs and they all said, “we won’t buy print-only; never happen.” The big publishers are counting on the authors’ (and agents’) desire for the advance to keep them locked into the current model. (Richard Curtis made this same point in a recent eReads post.) It is clear that the idea of splitting off ebooks from print contracts is one that these agents have been thinking about for a while. The relative attraction of the advance goes down as the level of ebook sales on which you’re taking half or less of what you could get goes up.

We also spent a little time discussing “verticals” and my theory that power is moving from “control of IP to control of eyeballs.” In the past week, I’ve had two conversations with Hay House executives (they’re on the Digital Book World program too) about their business. To somebody with a trade orientation, it’s pretty phenomenal. They run between 30 and 100 live events a year for their community. They have over 1 million email addresses that drive the sales of all their books. One of the agents said he had an author for whom he sold a book to one of the Big Six houses and they sold twelve thousand copies. He sold the next title to Hay House and they sold two hundred thousand. How long will the Big Six houses be able to compete for big-potential books in Hay House’s sweet spot (mind-body-spirit), advances or no advances?

One of the agents at lunch does a lot with juveniles. “Do I have to worry about this ebook thing much?” that agent asked. Soon you will, I said. After lunch I was working with my frequent collaborator Ted Hill on a proposal we’re making for another conference on digital tipping points. One we were talking about is “when does the publishing house have editors shift their focus from developing a print book with an author, with the ebook as afterthought, to developing the best possible digital product, with the print book coming out of it?” That gave me an answer for that agent: you better have somebody on your team now who can see the digital book possibilities in every idea before you peddle it. Now that you’ve made me think about it, I realize that if you’re not fully exploring the creative possibilities for digital products for every kids book you develop, you’re already missing the boat.