Mark Coker Founder, Smashwords

Literary Agents Will Write the Next Chapter of the Ebook Revolution

SEVEN MACRO TRENDS FACING PUBLISHING

(and what they mean for agents, publishers, authors and books)

TREND 1

Brick and Mortar in Decline

Decline of Brick and Mortar

• Book buying moving to online

• Instant discovery, sampling and purchase

• Satisfies three most important consumer drivers:

• Unlimited selection

• Convenience

• Low price

TREND 2

Content Explosion

Content Explosion

• Books face increased competition

• Hundreds of thousands of books released each year

• new traditionally published titles

• zombie books – out of print books coming back to life as POD books and ebooks

• explosion of self-published books

• Alternative non-book Internet content, much of it FREE

• blogs, wikipedia, social media, games, video

TREND 3

Reading Moving to Screens

Reading Moving to Screens

• Screen-reading offers more pleasurable reading experience than paper

• click-click-click discover-sample-buy-read

• custom font sizes

• reflowable text

• hyperlinks

• portability

• (… and screen reading will get better, faster, cheaper each year)

TREND 4

Ebooks to Surpass Print Books

Ebooks to Surpass Print

• Ebooks will surpass print faster than most realize

• on revenue basis, ebooks will surpass print within four years

• on unit consumption basis, will surpass within two years

• for most indie authors, the crossover has already happened: ebook sales surpass print by a wide margin

TREND 5

Publishers Losing Primacy

Publishers Lose Primacy

• Big Publishing no longer controls the printing press and access to distribution

• The tools for publishing & distribution are now free and democratized

• Authors earn 50-70% list vs. 5-17%

• Indie ebook authors scaling best-seller charts, opening eyes of fellow authors to commercial viability and credibility of indie ebooks

The Problem with Big Publishing

• Authors & agents face diminished opportunity with traditional publishers

• Advances declining

• Tougher to sell great books from great authors if publishers don’t perceive commercial potential

• Rear view publishing: Publishers acquire today what was selling yesterday

• Slo-Mo publishing: 12-18 months production cycle

• Publishers forcing authors/agents to assume roles once the responsibility of publishers

• Editing

• Platform building

• Post-pub marketing

Why Big Publishing is Broken

• Good books forced out of print too early

• High expense structures force publishers to over-price books

• Publishers can’t reliably predict which books have commercial merit

• readers, NOT publishers, decide this

• Legacy business models based on print

• Publishers lack long tail strategy

• Can’t take risk on every author

• Print in decline, exacerbated by decline of brick & mortar

• Publishers milking the rise of ebooks with over-priced books

What’s Next for Big Publishing

• Big Publishing ill-prepared to weather coming storm

• Further consolidation likely

• Rate of author defections to increase

• Authors will assert greater demands for royalties, services, rights, results

• Publishers that survive are those who do for authors what authors cannot do for themselves

• The gulf between the capabilities of publishers and authrors is shrinking, thanks to technology

TREND 6

The Rise of Indie Ebooks

The Indie Ebook Game Changer

• Indie ebooks can out-compete Big Publisher ebooks

• Democratized access to distribution (Smashwords!)

• Favorable economics

• Low to near-zero production cost

• 50-80% royalty rates

• Ability to price books lower to expand audience and sales volume, yet net higher per-unit royalties (virtuous flywheel)

TREND 7

Agents Writing the Next Chapter of the Ebook

Revolution

Why Agents are Introducing Indie eBook Publishing Services

• Agents realize their wagons are hitched to a sick horse (Big Publishing)

• Agents, long the trusted commercial enablers of an author’s success, must find new opportunities to serve authors as Big Publishing gravy train fades

• More difficult to sell high quality works

• Advances declining

• Legacy business practices built on scarcity (high prices, windowing, DRM, geographic rights restrictions) backfire in new world that demands abundance and instant availability

• To survive and thrive, agents must wean themselves from the teat of publisher advances

Understanding the Indie Ebook Opportunity for

Agents and their Clients

The Agent Opportunity

• Agents have access to treasure trove of underutilized assets

• trusted relationships with world’s most commercially viable authors and estates

• reverted-rights works

• unpublished works

• previously rejected by publishers

• shorts not suitable for print

• Future stream of author production

Great Authors Need Great Agents

• Agents can do for authors what authors cannot do for themselves

• Agents help authors exploit full spectrum of commercial opportunity

• Traditional publishing

• Self-publishing (a.k.a “indie”)

• Dramatic adaptation (film, TV, plays)

• Translation

• Merchandising/licensing

• Agents can help authors get their books produced and distributed

• Agents help authors focus on what they do best: WRITING!

Not All Authors Want to become Publishers

• Smarter time management: Most authors would rather focus on writing and revision rather than publisher responsibilities of…

• Final editing and proofing

• Cover design

• Production

• Sales & marketing

• Distribution

• Accounts receivable

• And more…

The Publishing Services Spectrum

• There’s a vast middle ground of services opportunity between full service publishers and DIY

• What can fill void?

Agents to Fill Publishing Services Void

• Agents expand client service capability with new e-publishing options

• Help authors release indie ebooks

• Manage service provider relationships for …

• Professional editing

• Cover design

• Ebook formatting

• Ebook distribution

• Marketing and publicity

• Manage back office

• A/P, A/R, payments

Do Agents Earn their 15%?

• Yes!

• No author has ever failed because an agent took 15%

• Many authors have failed because they didn’t have an agent

• Graham/Coker* equity equation

• 1/(1-n) where n = .15

• agent earns their keep when they increase author’s commercial outcome by 17.5% or more

*Adapted from Paul Graham’s equity equation.

Can Traditional Publishing and Indie Publishing Co-exist?

• YES

• One option does not preclude the other

• Mutually complementary

• Indie ebooks as farm league for traditional crossover

• Authors can play in both worlds

• Traditional authors can continue building platform by self-pubbing shorts and other indie works between Big Publishing releases

• Often, the indie opportunity is more lucrative than the traditional opportunity

• Agents can help clients make best decision

Conflict of Interest for Agents to Facilitate Publishing Services?

• NO

• Agent’s job is to maximize commercial opportunity for author clients

• To ignore indie publishing option would constitute conflict of interest

• Agent’s interests fully aligned with author’s interest

• Earns 15%, regardless of publishing channel: what’s most profitable for client is most profitable for agent

• Agent takes greater risk by passing up the bird-in-hand of publisher advances

• The indie option gives agent more negotiating leverage with publishers and rights acquirers

Strength in Numbers: How Agents Can Leverage their List to Drive

Unique Value for all Clients

• Special agency-wide promotions – Leverage strength in numbers to execute coordinated promotional campaigns with marketing participation and backing by all your authors.

• List building – Build opt-in email lists for client fans by author and genre. Offer Smashwords coupons as exclusive enticement and benefit for mailing list subscription. Advertise agency email lists and author-specific lists at end of each client’s ebook.

• Build the net – A single ebook is a fish hook in the ocean. Multiple ebooks, connected by cross-promoting hyperlinks, becomes a net. Use the last page of every ebook to promote other books by this author, other books by similar client authors

• Sampling – Each ebook should contain sample chapters of other books by the same author, or similar agency authors

• More marketing ideas – Download the free Smashwords Book Marketing Guide

Smashwords + Agents

Let’s Work Together!

[many agents have already partnered with Smashwords]

Smashwords Makes it

Fast, Free, and Easy

to Publish and Distribute Ebooks

Smashwords Facts

• The leading ebook publishing and distribution platform for indie authors

• 65,000 ebooks published at Smashwords by 25,000+ authors, publishers and agents

• 6,800+ titles released in last 30 days (8/5/11)

• Worldwide, supportive community of fellow Smashwords authors/publishers/agents

• International distribution

• Profitable and growing

• Technology leader with focus on continuous technology improvement

0100002000030000400005000060000700008000090000

2008 2009 2010 2011

Indie ebooks published at Smashwords

140

6,000

28,500

90,000 (est)

Smashwords Service Offering

• The leading ebook publishing and distribution platform for indie authors

• Free ebook conversion to nine formats

• Aggregated payments and reporting

• Centralized metadata management

• 85% net back to agent

• Exclusive marketing tools

• Coupons

• Co-branded ebook store

• Social media enabled

• Distribution to major retailers

Smashwords Distribution to Major Retailers, Mobile App Platforms

How to Get Started on Smashwords

• Sign up for a free account at www.smashwords.com

• Format your books to the Smashwords Style Guide

• DIY, or email list@smashwords.com for “Mark’s List” of low-cost freelance formatters and cover designers

• Upload and start selling in minutes

Smashwords Ebook Publishing Resources

• Resources

• How to Publish and Distribute with Smashwords

• Smashwords FAQ and glossary of ebook publishing terms

• Smashwords Style Guide (how to format an ebook, over 100,000 copies downloaded)

• Smashwords Book Marketing Guide (how to market any book)

• The Seven Secrets to Ebook Publishing Success (best practices of most successful indie authors)

Other Smashwords Presentations on Slideshare

• Recent Smashwords Slideshare Presentations

• The Seven Secrets to Ebook Publishing Success (BAIPA presentation May 14, 2011)

• Crash Course in Indie Ebook Publishing (Bay Area Travel Writers Assoc., May 21, 2011)]\

• The Indie Ebook Revolution – How Authors Can Save Books from Irrelevance (Writing for Change, Nov. 13, 2010)

• The Free Speech Movement Meets Big Publishing (American Society of Journalists and Authors, Berkeley, CA May 15, 2011)

• The Uprising in Book Publishing (March 2, 2011)

• View complete Smashwords collection here.

Let’s work together

Connect with Mark Coker:

Web: www.smashwords.com

Blog: blog.smashwords.com

HuffPo: huffingtonpost.com/mark-coker

Facebook: facebook.com/markcoker

Twitter: @markcoker

Email: first initial second initial @ smashwords.com