Jane Friedman makes this very interesting point:
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.)
Basically, the main thing that an Author Solutions POD company offers is book design – the cover and the interior. Otherwise you could just take a pre-designed book and sign up with CreateSpace for free. As recently as 2006, when I self-published my first novel, print was the way to go, and maybe you’d get sales for an ebook. Now it’s entirely the other way around. It’s good to have print available if someone wants it, but the majority of sales are more than likely going to be for an ebook. So once you have your cover/interior you can take it to CreateSpace/Kindle/and Smashwords and you’re done. There’s no reason to pay the $600+ for an Author Solutions company that’s going to take the bulk of the profits from whatever sales you might have. It makes the for-pay POD company look as staid as traditional publishing itself.
This is not to say Author Solutions is valueless – $600 isn’t a terrible deal for a book cover and interior. But really, you can hire a designer at Lulu independently. And eventually the learning curve for Photoshop won’t be as high. Friedman goes on:
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.
The “vanity” part of vanity publishing was in large part due to paying your own way to publish. But if you’re paying nothing, and potentially making a lot of money in return, it’s hard to consider this “vain.” So hopefully vanity houses can offer some more valuable services in the future – a one-package deal of book cover design/interior design/ebook formatting/and editing. Mix that with a reasonable royalty rate (if any) and there are still customers who would like a one-stop place to do all that, just as it’s more convenient for a traditional publisher to do all that work. They just have to take down the price a lot when they’re competing with free.