The Indie Ebook Revolution

Writing for Change

San FranciscoNovember 13, 2010

Mark Coker Founder, Smashwords

My Background

About me

• Founder of Smashwords

• Free ebook publishing and distribution platform for indie authors

• We distribute ebooks to multiple major retailers (Apple, Sony, B&N, Kobo, etc.)

• Author of…

How Smashwords Works

• UPLOAD

• Author/publisher uploads a Microsoft Word file, formatted to our Style Guide

• CONVERT

• We automatically convert to 9 ebook formats

• PUBLISH

• Ready for immediate sale online

• DISTRIBUTE

• Distribute to major retailers

• GET PAID

• Authors/publishers receive 85% of net

Indie ebooks published at Smashwords

140

6,000

24,000

0

5000

10000

15000

20000

25000

2008 2009 2010 (Nov)

A REVOLUTION IS UPON US

CHANGE IS AFOOT

ooh,pretty!

BOOKS ARE ENDANGERED

WE MUST SAVE BOOKS

Books are Precious

• Long form content essential for

• deep dive knowledge immersion

• entertainment

• Books are vessels for cultural preservation

• Noah’s ark

• Promotes cross-cultural understanding

TECHNOLOGY IS COLLIDING WITH PUBLISHING

Technology Represents the Means by Which Consumer Desires are Realized

Things Touched by Technology Usually Become Faster, Smaller, Cheaper

Books are in Jeopardy

• In a world of faster, smaller, cheaper, print books have lost ground

• Expensive

• Unaffordable to vast majority of world’s literate population

• Unavailable, inaccessible to global market

• Archaic rights practices limit distribution

• Geographic limitations of print distribution

BIG PUBLISHERS ARE MAKING THE PROBLEM WORSE

UNTIL RECENTLY, BIG PUBLISHERS HAD A MONOPOLY ON THE PRINTING PRESSES AND

DISTRIBUTION TO BOOKSTORES

Publishers were the deciders

• Publishers controlled:

• Who got published

• Who got distributed

• What readers could read

IT WAS A SWEET RACKET FOR PUBLISHERS

Readers wanted books

Publishers controlled the supply

$

$

$

$$ $

$

$

$

BUT THEN THE INTERNET HAPPENED

… THE RULES CHANGED FOREVER

TRADITIONAL PUBLISHERS ILL-EQUIPPED TO SAVE BOOKS

uh oh!

They’re too slow

• 12-18 month release cycles

… their expenses are too high

… they’re exposed to too much risk

• Pay author advances

• Can’t predict demand

• many books fail and don’t earn out

• Broken supply chain

• 30%+ of printed books returned to publisher unsold

• Amazon is eating publishers for lunch

• Vertically integrated from authors to readers

Publishers try to mitigate risk by giving bean counters increased influence

… bean counters make poor decisions in the name of risk mitigation

• Adopt author-unfriendly policies

• Acquire fewer books from unproven authors

• Paying lower advances

• Require authors to assume more editing, marketing responsibility

• Adopt customer-unfriendly policies

• Favor “commercial” books

• Scarcity tactics to maintain higher prices

• Limit worldwide distribution

WE NOW LIVE IN A WORLD OF UNLIMITED ABUNDANCEAND CONSUMER CHOICE

YET THE BUSINESS OF BOOK PUBLISHING HAS CHANGED

LITTLE IN DECADES

(change is afoot)

Readers Demand Abundance and Freedom of Choice

• Customer drivers:

• Price

• Convenience

• Selection

• What Wal-Mart did to small town businesses, what B&N and Borders did to indie book stores, what Amazon is doing to B&M bookstores, what the Internet will now do to publishing

• Don’t blame Wal-Mart, B&N or Amazon – they’re only providing what customers want

• Books, bookstores, publishers and authors must now compete against unlimited abundance

TO SAVE BOOKS, WE MUST CHANGE BOOKS

AND CHANGE PUBLISHING

How to Save Books

• To save books, we must leverage technology to make books:

• Smaller, faster, cheaper

• More available

• More discoverable

• More accessible

• More compelling than alternative content options

The Better Book is Here

• It’s called an ebook

• Same book, only better

• Smaller, faster, cheaper

• More available

• More discoverable

• More accessible

• More functional

Ebooks as a percentage of US wholesale trade market

Source: Association of American Publishers, publishers.org

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2002 2003 2004 2005 2006 2007 2008 2009 2010

As an author, the power to save books is in your hands

Indie Authors + Ebooks + New eBook Supply Chain Will Save Books

Indie Ebook Authors Have Opportunity to Better Serve the New Customer

Requirements

• Benefits of indie ebooks

• faster release cycles

• instant access to global market

• democratized distribution

• closer to customers

• lower expenses

• no paper!

• never go out of print

• can offer lower cost, higher profit books

The Economics of Indie Ebooks Will Drive Increased Indie Authorship

• Higher profits than traditional

• 70-100% net for indie e- vs. 5-25% traditional

• Price ebooks for less yet still make more per copy than traditionally pubbed print authors

• $8 indie ebook earns over $6.00, vs <$.40 trad MMP

• $.99 indie ebook earns more than $8.00 trad MMP

• Lower price = reach more readers = more sales at higher profits per sale

MMP=Mass market paperback, aka “pocket book” in some countries

My Predictions:

Ebook sales dollar volume will exceed print within 5 years

Ebook unit volume will exceed print within 3 years

Summary

• Books are essential to the future of mankind

• We must save books by changing books and changing publishing

• Books face increased competition from alternative, lower cost sources for entertainment and knowledge

• Indie ebooks can make books more available and more accessible to more people

• Thanks to ebooks, opportunity to connect readers with books has never been greater

Thank you for listening!

Q&A

Where to find Mark Coker:

Web: www.smashwords.com

Blog: blog.smashwords.com

HuffPo: huffingtonpost.com/mark-coker

Twitter: @markcoker

Email: first initial second initial

@smashwords.com