Q&A: Mark Coker of Smashwords

“Authors who begin cultivating their online readership today are the ones who will be most successful five years from now.”

Mark Coker is the founder and CEO of Smashwords, an e-publishing service that recently entered into an agreement with the creators of the popular iPhone e-book reading app Stanza. Here, Coker offers up his take on where publishing is headed and what every author needs to know about creating an e-book.

Why did you develop Smashwords and what are your goals for the site?
My goal is to create a new kind of publisher, one that better serves the needs of authors and readers. Within minutes of uploading a manuscript, the author is published into nine e-book formats, readable on any e-reading device and ready for immediate sale. They gain immediate exposure to thousands of readers on Smashwords and to over a million iPhone and iPod touch users, where our books are listed in the native Stanza catalog.

We’re entering an exciting era in book publishing. Digitally delivered e-books are on the rise, and print is on the decline. Old models and practices are crumbling, and new models are emerging.

The business of publishing is about to become atomized into a billion tiny bits. We’ll see fewer physical shelves and more digital shelves, and these shelves will be scattered in unexpected places. The catalysts for this change are economics, digital content delivery and the growth of independent publishing (both in the form of self-publishing and indie publishing).

Digital books are cheaper to produce and purchase. Digital books shatter geographic boundaries by allowing authors, books and culture to reach an broader worldwide market.  Smashwords authors can price their e-books at lower cost to the consumer, yet still make greater profit per copy than in print. A $3 book on Smashwords makes the author a per unit margin of $2.22—six times higher than the 35 cent five percent royalty on a $7 mass market paperback.

Over the next few years I think we’ll see dramatic changes in publishing as the dual impact of e-books and independent publishing are felt. The traditional author-to-consumer supply chain of author—agent—publisher—printer—shipper—bookstore—consumer will evolve into a more efficient form. If you occupy the part of the chain prior to the printer,  you have a bright future. I envision the power center will shift from the publisher to the author, and the supply chain will shrink with fewer toll-taking intermediaries standing between the author and the reader.

E-books today still represent under one percent of overall book industry sales, so it’s too early to tell if e-books will boost or cannibalize print sales. It’s also too early to write off print. For publishers already struggling to keep the lights on in this traditionally razor-thin margin business, however, even the slightest sustained drop in print sales and cash flow could threaten players with high cost structures and weak balance sheets.

Mainstream publishers will become more risk averse in their acquisitions, which will have the effect of orphaning otherwise deserving authors. Norman Savage, for example, was an author on the verge of a book deal with FS&G, then the market crashed, his champions lost their jobs and he lost the deal. He publishes on Smashwords now.

Smashwords offers multiple formats for e-books. Which is the most popular now and have you noticed any one format gaining prominence?
EPUB is definitely the most popular format and is getting stronger, largely because it’s an open industry format supported on Stanza and other desktop readers. Our data also shows the importance of publishing an e-book in multiple formats. Although EPUB is our No. 1 format, two thirds of the reading is still happening with the other formats.

Can you tell us about your partnership with Stanza?
In January we announced a distribution deal with Lexcycle, makers of the popular Stanza e-reading app for the iPhone and iPod Touch. Smashwords books are listed in the native Stanza catalog for instant sampling and purchase. For the self-published author, or the indie publisher, this offers exposure to Stanza’s 1.3 million users. Within seconds of a book being published at Smashwords, it’s in Stanza.

Like all our publishing services, we don’t charge authors and publishers to appear in Stanza. We take 15 percent of net, and the author/publisher receives 85 percent.

Do you expect the iPhone (or smart phones in general) to become a primary delivery vehicle for e-books?
The number of people reading on smart phones will dwarf the number reading on dedicated e-reading devices. Already, using Stanza as an example, here’s an app that has been around less time than the Kindle, yet in a short time has amassed an e-book-reading audience two to three times larger than the Kindle.

There are three factors driving the adoption of e-books on smart phones: 1. People already own and carry billions of phones so as e-reading devices, they’re essentially free, convenient, portable and already wirelessly connected. 2. The screen technology and e-reading apps have evolved to the point where the reading experience is pleasurable. 3. Apps such as Stanza are being ported to other phones, so we’ve only just scratched the surface of the growth we’ll see in the next year or two.

I don’t think the growth of cell phone e-books will come at the expense of the dedicated e-reading devices like the Kindle or Sony Reader. You might read off the iPhone while you stand in line at the grocery store, or off the Sony Reader when you’re reading in bed.

The dedicated devices use E-Ink screens. E-Ink screens are easier on the eyes for extended reading because the digital ink is reflective (ambient light bounces off the E-Ink to the eye, just like paper, versus having radiant light of a conventional screen aimed at the eye).

Also don’t forget on-screen reading on desktop and laptop computers. The same advantages that apply to cell phones apply to your computer screen. Ten years ago, conventional wisdom held that people would never give up their newspapers in favor of online news and blogs. We know what happened there.

What would you most like to say to writers who are interested in creating their own e-books?
If you’re a self-published author or indie publisher, or if you own the digital rights to your out of print books, there’s absolutely no reason not to publish at Smashwords. Our services are free. The author/publisher determines the price and sampling percentage, retains all rights, and receives 85 percent of the net proceeds.

We’re still at the very beginning of the first inning of the e-book game. Authors who begin cultivating their online readership today are the ones who will be most successful five years from now. It’s the same reason why the early bloggers from 10 years ago have some of the largest audiences today, and the first Twitterers of two or three years ago now have the most followers. E-book sales are growing at over 60 percent per year, and this rate of growth will probably persist or accelerate in the next five years.

We caution our authors to keep their sales expectations realistic. Although e-books are well-suited to word of mouth viral marketing, e-books aren’t easy to sell. Many of the same marketing challenges that apply to selling print books apply to e-books.

We don’t advise our authors to pursue e-book-only publishing strategies. Since 99 percent of all books sales are still in print, you should also publish in print. Let the readers choose how they want to buy your book.

What do you think about the idea of creating and marketing an e-book?

-Maria Schneider

Tagged as: e-books