Where the eyeballs are going: An interview with Smashwords founder Mark Coker

Are you tired of hearing that it’s never been more difficult to get your book published? Do you want to get published today and reach a potentially huge international audience? Are you sick of doom-and-gloom assessments of the publishing industry? Do you find interminable lists of rhetorical questions irritating? Then perhaps it’s time for me to shut up, and give the floor to Smashwords founder, and self-publishing guru, Mark Coker. According to Mark ‘There’s never been a better time to be a writer.’ And that’s what we like to hear.

For a long time, self-publishing has been seen as the pariah at the publishing party, with the dubious practices and poor production values of vanity publishers largely to blame. This has all changed. The recent phenomenal commercial success of a number of self-published authors (one in particular, who shall not be named here…) has done much to change that perception, as has the emergence of Smashwords.

After launching in 2008, Smashwords turned the self-publishing industry on its head by offering authors free access to digital self-publishing and distribution services. The Smashwords business model is based on the idea that authors should retain complete control over their works, and that they should receive the lion’s share of all royalties. Oh yeah, and Smashwords only makes money if your book sells. Nice.

Speakeasy recently caught up with Mark Coker. He offered a fascinating entrée into the dynamic world of digital self-publishing, explaining to us why ‘The future of digital self-publishing is the future of publishing.’ Read on to find out more.

Speakeasy: There has long been a stigma attached to self-publishing. Do you think this has changed, or is in the process of changing? Why?

Mark Coker (MC): Four years ago when I started Smashwords, there was a definite stigma associated with self-publishing.  Self-publishing was viewed as the option of last resort for failed authors who couldn’t get a traditional book deal.  Today, the stigma is disappearing.  Here in the US, people who scoff at self-published authors reveal themselves as out of touch dinosaurs.   Self-publishing is gaining increased respect and credibility in the publishing industry thanks to the enormous commercial success of many indie authors.

The other week, four Smashwords authors hit the New York Times bestseller list in the same week.  The naysayers can’t argue with the success of self-published authors.  Something very profound is happening now in self-publishing.  Although industry-watchers realise something is happening, most don’t truly grok the significance.  Self-published authors are learning to become professional publishers.

Speak to any self-published author, and you’ll understand why self-publishing, and specifically ebook self-publishing, is the future of publishing.

Agents no longer discourage self-publishing, and many agents are now actively supporting the self-publishing efforts of their clients.  Agents and publishers are scouring the best-seller lists of major retailers as the slush pile loses its luster.  Agents and publishers are beginning to realise that consumers are the best curators of books worth publishing.

Within the next couple years, I think the stigmas will flip.  It’ll be common for us to hear industry observers speaking about limitations and drawbacks of traditional publishing, and the rising stigma of traditional publishing.

Writers are beginning to realise they don’t need the blessing of a publisher to become a published author.  They’re asking what publishers can do for them that the authors cannot do for themselves.  Authors are also starting to realise that there can be significant disadvantages to working with a publisher.  Publishers can actually harm an author’s ability to reach readers, because publishers are over-charging consumers, paying low royalties, and are slow to get the product to market.

A few years ago, authors had no choice but to work with a publisher.  Publishers controlled the printing press, they controlled the all-important access to bookstores, and they controlled the knowledge to professionally publish.  Without a publisher, you couldn’t reach readers.

Today, thanks to ebook publishing and distribution platforms such as Smashwords, the printing press is available to all authors at no cost, and the distribution to ebook stores is fully democratised.  At Smashwords, we’re doing our part to promote best practices, because we believe knowledge in the hands of authors is power.  Our mission is to shift the power in publishing from publishers to authors.  A few months ago, I published The Secrets to Ebook Publishing Success, a free ebook that identifies 28 best practices of the most commercially successful ebook authors.

Here in the US, ebooks will account for approximately 30% of the book market in 2012, up from approximately 19% in 2011, 8% in 2010, 3% in 2009, and 1% in 2010.  Australia has already entered its exponential growth phase, though I think Australia will actually enjoy a faster exponential ramp than did the US, because the price disparity between Australian print books and ebooks is so much more dramatic.

Within the next three to five years, ebooks are likely to account for over 50% of the book market revenue in Australia, New Zealand, the UK, Canada and the US.  Since ebooks cost dramatically less than print books, the revenue market share numbers dramatically understate the massive shift to e-reading from paper reading.  By this coming January, I think more books will be downloaded and read digitally than print books here in the US, if it isn’t happening already.  Unit volume is a forward indicator of where the market is shifting, because it measures where the eyeballs are going.  If you want to learn which authors are building the biggest platforms the fastest, look no further than indie authors.

This rapid shift to ebooks will have profound implications for publishers.   As ebooks rise, publishers lose their primacy.  The publishing and distribution of ebooks is democratised, and their prior grip on authors diminishes.

I think most writers today still aspire to be traditionally published, but the percentage of those in this category is declining rapidly.  Today, an increasing number of authors are choosing self-publishing as the option of first choice.  Many of our authors are starting to turn their back on traditional publishers. Many indie authors don’t even bother pitching their books to agents or publishers because they’re taking their books directly to readers.

Speakeasy: At what point in the pursuit of publication, and why, should an author consider publishing with Smashwords?

MC: I’m obviously biased, but I think most writers are well-served to pursue an indie-first publishing strategy, and to leverage Smashwords as a distribution partner.  We’re the world’s largest distributor of self-published ebooks.  We were the first to open up major ebook retailers to self-published ebooks.  We’re working with over 45,000 authors around the globe who collectively published 150,000 ebooks with us.

Although services like Smashwords make ebook publishing and distribution fast, free and easy, we don’t make it easy to write a great book readers will want to read.  This is the responsibility of the author.  Many self-published authors make the mistake of rushing their book to market before the book has been properly edited and proofed, and before they’ve developed a professional-quality cover image.

If an author is unwilling or unable to assume these basic publisher responsibilities of publishing a quality book, self-publishing may not be right for them.

Speakeasy: What do you think indie ebook publishing is capable of that mainstream publishing is not?

MC: Self-published ebook authors enjoy faster time-to-market (minutes or days with indie vs. 12-18 months with traditional), greater creative freedom, direct feedback from readers, retention of all rights, dramatically higher royalty rates (indie ebook authors earn 60-80% list, vs. 12-17% list for traditional authors), instant access to global markets (it’s not uncommon for an Aussie author to sell their rights to a London or NY publisher, only to have the book never published in Australia), the ability to reach more readers by offering lower-cost ebooks, and they never go out of print.

However, I still think some mainstream publishers have a bright future.  Not all authors want to assume the responsibility of becoming their own publisher.  The very best publishers add value to the benefit of authors and readers.  Great publishers can take a good book and make it great.  Great publishers can produce, package and promote books in such a way that they reach commercial success.  If a publisher can do a great job of publishing, distribution, marketing and sales so the author can spend their time focused on what they do best – writing.  Unfortunately, most publishers are unable to do a great job for every author they represent.  Many authors already handle the majority of their post-publication marketing, for example.

The challenge for those authors who aspire to partner with a great publisher is that not all publishers are great, and most publishers fail to live up to the expectations of authors.  Ultimately, even great publishers won’t know the full market potential of a book until readers see it.

Speakeasy: Does Smashwords offer any kind of editorial services? If not, how are standards of quality maintained? What kind of editorial process do you recommend for authors prior to submission with Smashwords?

MC: When I first started working on the Smashwords business plan seven years ago, I decided Smashwords would not sell services to authors.  We have competitors that earn over two-thirds of their income by selling services and publishing packages to authors, and I think that’s wrong.  I think the money should flow in the other direction – to authors.  I want Smashwords to be in the business of selling our authors’ books.  We only earn income from commissions, so if our books don’t sell, we’re out of business.  We pay our authors.

We don’t provide editorial services, and we don’t make editorial judgments about our books, though we do hold our authors accountable to certain standards of quality as described in our Smashwords Style Guide.  We prohibit illegal books, or books that are poorly formatted, or books that aren’t complete.  All books are reviewed for quality formatting by our vetting team before we approve them for distribution to our retailers.

Although we don’t provide paid services, I do encourage authors to hire professionals for low-cost tasks they can’t or shouldn’t perform on their own.  Unless you’re a professional book cover designer, you should hire a cover designer.  Good covers are affordable, ranging from $50 to $200.  If you can afford a professional editor, hire one, but keep in mind that quality editing can cost several thousand dollars. Also keep in mind that most self-published books DO NOT sell well, so if you spend a lot of money, you may not earn it back.  If you can’t afford a professional editor, barter for editing services.  Offer to edit a fellow writer’s book if they’ll edit your book.  Involve beta readers in your pre-publication process. Definitely hire someone to proofread your book before you publish, or barter for the same with fellow writers. Few problems will turn a reader off faster than a book filled with typographical errors.

Speakeasy: With nearly 150,000 ebooks available through Smashwords, how can authors make themselves stand out?

MC: The nearly 150,000 ebooks at Smashwords represent only a small fraction of the hundreds of thousands of ebooks now on the market, and they’re all competing for a limited number of eyeballs.  It’s important to recognise that although we operate a small ebook store at Smashwords.com, our primary business is ebook distribution.  Nearly 90% of our sales come from our retail distribution network, where we distribute to the Apple iBookstore, Barnes & Noble, Sony, the Diesel eBookstore, Kobo, PageFoundry, Baker & Taylor, and more on the way.  Once a book gets out into distribution, it’s competing against hundreds of thousands of other titles.

It’s not as difficult as one might think to stand out in the crowd.  The secret is to write a super-fabulous book that generates reader word-of-mouth, and to make your book discoverable by readers.  In my most recent ebook, The Secrets To Ebook Publishing Success, I devoted a several chapters to issues related to discoverability and visibility.

Here are some important discoverability tips:

1. Maximise the availability of your book by distributing to as many retailers as possible. If your book isn’t fully distributed to every retailer, fewer readers will find it.
2. Create a high-quality ebook cover image. Ebook covers are not expensive, so don’t skimp.  The cover image is the first impression your book makes on a reader.  The cover image should be as good, or better, than what the traditional publishers are putting out.  The cover should be genre-appropriate. A romance cover should look different than a thriller, or a mystery.  A good cover image makes a promise to the reader.  It contains visual cues that tell the reader, ‘this book delivers what you’re looking for’.
3. Choose your title carefully. Like a good cover image, a good title should be genre-appropriate, catchy and intriguing, and true to the nature of the book.
4. Create a compelling book description. Your book description is your marketing copy.  Help the reader realise your book is for them.
5. Leverage viral catalysts. I devote an entire chapter to Viral Catalysts in my Secrets ebook.  A viral catalyst is something that helps make your book more available, more accessible and more enjoyable to readers.  Examples of viral catalysts include a compelling cover image, a fair price, proper categorisation, a great story well-edited, and quality formatting.  Each of the above four items are viral catalysts, and there are many more.

Speakeasy: What tips do you have for writers who are trying to establish their own brands and expand their online presence? Can you offer any examples of writers who do it particularly well?

MC: First, the moment you decide you’re going to write a book, starting working to build your platform. Your platform, simply put, is your ability to reach readers, or to reach people who can help you reach readers.  Start by networking with fellow authors.  Your fellow authors are your partners, not your competitors.  Share information.  Help your fellow authors become successful, because when the day comes that you’re releasing your book, they can help open doors for you.  Definitely take advantage of social media tools such as Twitter, Facebook and LinkedIn, but use these tools in a way that is natural and comfortable to you.  Don’t build followings simply so you can spam them with solicitations for your book.  Instead, contribute to these social networks by sharing useful information, or by adding to intelligent conversations.

Avoid negativity.  Authors who adopt a, ‘I complain, therefore I am’ online persona will harm their relationships with fellow writers, and turn off prospective readers and partners.  People might fear you, but they won’t like you.  You want people to like you, because underneath the technology patina of social media lies real people forming real opinions about you.

Price low, and leverage free.  A few months ago, we analysed millions of dollars of sales data from about 50,000 of our titles aggregated from the multiple retailers to which we distribute.  We wanted to understand at which price an author sells the most copies, and at which price they earn the most money.  We found that books priced at FREE generated about 100 times more downloads than priced books.  Among prices, we found $0.99 USD generates more unit sales than other price points, and higher prices lead to lower unit sales.  But when we analysed the author’s overall net income for these price points, we found that $2.99 to $5.99 appeared to be the sweet spot for the big earners.  We found that a $2.99 ebook earns the author slightly more money than a $9.99 ebook, but earns four times as many unit sales.  $2.99 earns the author more than $10+, but earns six times more unit sales.  If an author is given the choice to earn equal or greater income selling books at $2.99 vs. $9.99, which price point is the best for the author?  Obviously, $2.99.  The author earns more, but most importantly, they earn four times as many readers.

This means lower-priced authors are building platforms faster than higher priced authors. The implications of this dynamic are profound.   It means that traditionally published authors, who are seeing publishers price their books at $9.99 and above, are severely disadvantaged compared to indie authors who are underpricing them, reaching more readers, and earning the same or greater profits per book sold.  Once all authors begin to grok this, more of them will turn their backs on publishers.

Finally, for more tips, read my free ebook, The Smashwords Book Marketing Guide.  I identify over 30 platform-building tips, all free to implement.  As I recommend in the book, do the easiest things first.

If you want to see which writers are building platforms the fastest, take a look at the retailer best-seller lists.  We routinely have multiple Smashwords authors in the top 20 and top 40 bestsellers at the Apple iBookstore and Barnes & Noble.  These authors are building tremendous platforms, very quickly.  They’re doing it by writing great books that market themselves on the wings of reader word-of-mouth.  They’re pricing aggressively, usually $3.99 USD and below, and their books have professional-quality ebook cover images that scream, ‘this book was published by a professional!’

Speakeasy: The publishing industry is obviously in a state of flux right now; what does this mean for digital self-publishing, in particular the future of indie publishing?

MC: A couple years ago, authors were beholden to publishers.  Publishers decided which writers would become published authors, and which books readers would have an opportunity to read.

Now, thanks to the rise of ebooks, the availability of free self-publishing and distribution tools, and the know-how of publishing best-practices available to all, the tables are turning.  Publishers are beholden to authors.  The power in the industry is shifting to writers.  They now have options they never had before.  Writers now have the power to decide when their manuscript is ready for publication.  They have the power to publish today, and can reach readers today.  They have the power to bypass agents and publishers completely, because agents and publishers are no longer the gatekeepers that decide which books are worthy of publications.  Writers decide what gets published, and readers decide what gets read.  This new future of publishing is here today, it’s flourishing and all these major trends work to the author’s benefit.

When I first started talking about these concepts four years ago, people thought my ideas were ‘pie in the sky.’  Now these ideas are becoming more mainstream.

What’s not yet accepted or fully understood is the profound change self-publishing will have on the future of publishing.  Traditional publishing has seen self-publishing nibble around the edges of its business, but it hasn’t experienced the full frontal assault that will inevitably arise as more authors turn their backs on traditional publishers.  So far, traditional publishers have seen some of the best authors simply dip their toes in the self-publishing waters with out-of-print, reverted rights books, or books they couldn’t sell to publishers.  They haven’t yet experienced wide-scale abandonment.  That day will come if traditional publishers don’t quickly change their practices.

I think the large traditional publishers are going to have a tough time in the next few years.  They’re overpricing their books, and they’re paying per-unit royalty rates that are one-third to one-quarter what authors can earn self-publishing.  At the moment, the fate of big publishers is very much tied to print.  If brick-and-mortar bookstores continue their global decline, and if print continues to fall out of favor as a reading format in favor of screen-reading, then book publishing will become dominated by ebook publishing, and with ebooks the printing press and distribution are democratised and available to all.  Publishers will be hard-pressed to justify their low royalties and high prices in a world dominated by ebooks, and dominated by customer expectations for lower prices.

If publishers want to survive, they’ll need to develop self-publishing initiatives, or partner with or acquire the companies that can bring them that competency.  I think we saw the first step in that direction last month when Pearson, based in the UK, acquired Author Solutions (I blogged about it here).  Although I think Pearson will come to view that acquisition as a mistake (Author Solutions is not representative of the future of self-publishing, in my opinion), the acquisition will open the eyes of the other big publishers and force them to develop self-publishing strategies as well.

Publishers need to lower prices, cut expenses, and develop new service offerings for authors.  To make their royalties more competitive, they’ll need to ask their authors to assume more risk up front so the publisher can take less risk.  This will mean lower book advances.

The future of digital self-publishing is the future of publishing.  In the future, most authors will self-publish, and the most commercially successful authors will straddle both worlds of self-publishing and traditional publishing.  Traditional publishing and self-publishing will begin to blend closer together.  Self-publishers will adopt the best practices of traditional publishers and improve upon them, while traditional publishers will restructure their businesses to be more inclusive of the self-publishers.

Above all, readers will decide what gets read.

Speakeasy: What do you think the success of Smashwords says about the changes in the publishing industry and the reading public? Have you identified ways in which writers might be able to work this to their advantage?

MC: Smashwords retailers will sell over $15 million worth of Smashwords ebooks this year to the reading public.  Our authors’ books are hitting all the bestseller lists.  This tells me self-published authors are writing great books, and readers are embracing the combination of high-quality and lower prices.  There’s never been a better time to be a writer.  When you examine all the converging trends in publishing today – reading moving to screens, the rise of ebooks, democratised publishing and distribution, and the decline of traditional brick and mortar – all of these trends benefit writers.  Writers decide if they will self-publish, or if they’ll work with a traditional publisher, or if they’ll straddle both worlds.

My advice to writers is to get out there and publish.  Take chances.  Experiment with pricing.  Listen to your readers.  Get your books listed at every retailer.  Study the best practices of the most successful indie ebook authors (read my ebook, The Secrets to Ebook Publishing Success!), emulate the best practices, and then improve upon them.  Remember that the best marketing you can do is to write a quality book that markets itself on the wings of reader word-of-mouth.

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Julian Thumm is a freelance editor and writer. He has degrees from The University of Queensland and The University of Adelaide. He has worked with the Australian Journal of Communication, The University of Queensland Press, and Corporate Communication International through The City University of New York. He is currently based in Brisbane.