The Seven Secrets to Ebook Publishing Success

BAIPAMay 14, 2011

Mark Coker Founder, Smashwords

My Backstory

The Problem with Big Publishing

• Ossified business practices have changed little in 50 years

• Backward looking acquisitions

• Books acquired based on perceived commercial potential

• Manhattan sky rise rents add no value to a book

• Requiring authors to take on publisher responsibilities (editing, marketing)

• Unable to take a risk on every deserving author

• Readers shut out

My Answer to the Problem: Smashwords

• Ebook publishing and distribution platform

• Free ebook publishing tools for authors and publishers

• Ebook conversion, publishing and distribution

• Marketing tools

• Distribute to Apple, Sony, B&N, Kobo, ScrollMotion, Diesel, etc.

• 85% net back to author/publisher

How Smashwords Works

• UPLOAD

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

• Free conversion to 9 ebook formats

• Ready for immediate sale online

• DISTRIBUTE

• Distribution to major retailers

• GET PAID

• Authors/publishers receive 85% of net = 60% list from major retailers

0

1000020000300004000050000600007000080000

2008 2009 2010 2011

Indie ebooks published at Smashwords

1406,000

28,500

75,000 (est)

THREE BIG TRENDS RESHAPING THE RULES OF PUBLISHING

(and what it means to you)

TREND ONE

Bookselling moving to the Web

Bookselling moves to the Web

• Superior book buying experience

• Customer drivers:

• Price

• Convenience

• Selection

• Self-published books (P- & E-) displayed side by side with traditional books

• Big publishers lose primacy

• If brick & mortar disappears, publishers lose key value proposition: exclusive access to distribution and readers

Percentage of book purchases made online vs B&M, P- and E-

Brick &Mortar

Web

Today?

TREND TWO

Authors Become Publishers

Authors becoming publishers

• The power in publishing is shifting to authors

• Free and low cost self-publishing allows authors to bypass publishers

• Democratized access to distribution

• Favorable economics for indies

• reap up to 100% of retail price, vs. 5-17%

• More professional authors will go indie

• Mass exodus imminent?

Number of books published indie vs. traditional

Indie books

Today?

New trad. books

TREND THREE:

As Reading Moves to Screens, Ebooks Will Overtake print

Reading moving to screens

Ebooks as a percentage of US wholesale trade market

Source: Association of American Publishers, publishers.org

0

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2

3

4

5

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8

9

2002 2004 2006 2008 2010

Ebooks to overtake print

Print books

Ebooks

Today?

Ebooks replacing print faster than most realize

• In January 2011, Sourcebooks earned 35% of revenue from ebooks

• Jan-Feb 2011 vs Jan-Feb 2010

• E-Books increased by 169.4% while all categories combined of print trade books declined by 24.8% (Source: AAP press release, April 14, 2011)

• Ebook unit market share even higher

• Some best-selling indies selling 1,000 e- for every p-

Why ebooks are hot

• Screens can offer better reading experience than paper

•Changeable font size A A A A

• Portable and compact

• Ebooks offer better purchasing experience

• Huge selection

• Convenient sampling and purchasing

• Lower cost than print

Indie Authors and Small Presses Have Opportunity to Out-Publish Big

Publishers

• Asymmetric competition

• field tilted in indie’s favor

• Smaller indie authors/publishers

• democratized distribution

• instant access to global market

• lower expenses

• closer to customers

• never go out of print

• earn more per book

Indie ebook economics will drive revolution

• Higher profits than traditional

• Earn 60-100% list price for indie e- vs. 5-17% traditional

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

• $8 indie ebook earns ~ $5.00, vs <$.40 trad MMP

• $.99 indie ebook earns $.60 - $.70

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

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

How to produce and publish an ebook

Planning your move to ebooks

• Forget (some of) what you know

• Don’t try to make e- look like p-

• Ebooks consumed differently than print

• Less = more with ebooks

• Liberate text from complex formatting and layout

• Design for reflowability, small screens

Ebook devices (and customers) shape shift text

• Example of Smashwords novel, All Good Things Die in L.A. by Anhoni Patel

• iPhone, using the Stanza reader. User-selected options: Font: Verdana; Background pattern: Stone carving; text color: Dark Violet; Font size: larger than normal

Multi-format important

• PDF does not = ebook any more

• Multi-format lets customer enjoy your book their way

• Top 4: EPUB, MOBI/PRC, PDF, HTML

• Expands your selling & distribution options

How to Create an Ebook

• Preparation

• Most books originate in Word or other word processor

• Anticipate the shape shift

• Simplify formatting and layout, see Smashwords Style Guide at http://www.smashwords.com/books/view/52

• Conversion Options

• Automated (e.g. Smashwords, Amazon)

• Direct from book layout software (e.g. save as PDF, EPUB)

• DIY conversion tools (Google ‘ebook conversion tools’)

• Hire ebook formatter/designer/coder (Complex books)

Pricing

Pricing

• Determine objective

• Maximize readers, profits or both?

• Price lower than print

• Low price is marketing tool

• Non-fiction supports higher prices than fiction

• Price is not sole determining factor

• High prices may encourage piracy

Distribution

Ebook retailers want indie ebooks

Mobile apps

Content Distribution Options

Direct to customer

Direct to retailer Distributor Publisher

Pros High margin, direct contact with readers, retain all rights

Good margin, exposure to millions of readers, real time reporting, retain rights

Good margin, time-savings, access to multiple retailers , aggregated reporting and analytics, retain rights, priority support

Advance, access to B&M retail, editing and revision, marketing and promotion, prestige

Cons Customer service burden, credit card processing fees, tough to attract traffic

Time consuming to manage multiple relationships, not all retailers offer direct option, distributors may offer higher margins

Delayed reported from retailers (1-4 weeks), takes 7.5-10% commission on retail price

Low royalties, reporting delayed up to six months, limited distribution, Lose rights, can go out of print quickly

The Seven Secrets to Indie Ebook Publishing Success

(how to participate in the ebook revolution)

Secret #1

#1 Write a Great Book

• With the power to publish comes the responsibility to be a great publisher

• Honor your reader with a great book

• Be fanatical about quality

• Edit, revise, edit, revise, repeat

• Leverage beta readers

• Invest in a great cover image

Would You Buy This Book?

Professional Covers Not Expensive (this was $45)

Secret Two

#2 Write Another Great Book

• Build a backlist

• Each new book offers the opportunity to market your backlist

• The best-selling authors/publishers on Smashwords offer deep backlists

• Build trust with your reader

Secret Three

#3 Maximize Distribution

• If your book is not available, it’s not discoverable

• Retailers invest millions of dollars to attract readers to your book

• Consider using a distributor to get your book sold in as many ebook stores as possible *

• spend your time writing, producing, marketing

* Smashwords is a distributor, so of course I believe this

Ebook retailers want indie ebooks

Mobile apps

Secret Four

#4 Give (some of) Your Books away for Free

• The most misunderstood, most underutilized market development tool

• If you have a deep backlist, offer at least one book for free

• Eliminates financial risk for first-time readers

• The highest grossing authors/publishers at Smashwords offer at least one free book

Additional resource: Read FREE, by Chris Anderson

Secret Five

#5 Patience is a Virtue

• Ebooks can develop differently

• Trad. print books – big sell-in, then yanked from shelves, then sales go to near zero

• Ebooks – can start small and grow slowly before breakout

• Ebooks are immortal

• Never go out of print

• Think of each book and each retailer as an asset that will yield income over the long term

• Each retailer listing is a seedling, nourish it

Secret Six

#6 Trust Your Readers and Partners

• If you practice paranoia, you and your books might as well live in a cave

• Trust your readers

• DRM is counterproductive

• If you don’t trust your readers to honor your copyright, you’ll reach fewer paid readers

• Trust your supply chain partners

• If you limit distribution due to lack of trust, you’ll limit your success

Secret Seven

#7 Marketing Starts Yesterday

• Marketing starts before you write your book

• Cultivate your social network

• Contribute, share ideas, support your fellow writers and publishers

• Don’t spam your network

• Your social network will help you reach first readers

• Your readers are your sales force

• Give them tools to market your books for you

• Network your books with hyperlinks

Resource: Smashwords Book Marketing Guide

BONUS Secret Eight

Secret #8 Architect for Virality

• Secrets #1 - #7 help maximize virality

• Books have always been a word of mouth business

• Your readers determine your success

• It’s all about word of mouth (and mouse)

• Understand the power of your “first reader”

The Viral Dream

First reader

More Readers

Viral Decay, The Reality

First reader

Readers

Negative Virality

First reader

This booksucks!!!!

= Last reader

How to Architect for Virality

• Implement the Seven

• Eliminate friction that limits

• availability

• sampling

• purchasing

• enjoyment

Additional resource: Read The Viral Loop by Adam Penenberg

The 7 8 Secrets to Ebook Publishing Success

1. Write a great book

2. Write another great book

3. Maximize distribution

4. Give (some of) your books away for FREE

5. Trust your readers and partners

6. Have patience

7. Marketing starts yesterday

8. Architect for virality

Visit the Smashwords Blog, 9/16/2010 for the 7 Secrets to Failure: http://blog.smashwords.com/2010/09/seven-secrets-to-ebook-publishing.html

Summary

• With great change comes great risk

• Leverage change to your advantage

• Power of publishing is shifting to authors and small publishers

• Readers determine your success

• Opportunity to reach readers has never been greater

Ebook Publishing Resources

• Smashwords Style Guide (how to format an ebook)

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

• Mark’s List – Low cost formatters, cover designers list@smashwords.com

Thank you for listening!

Q&A

Connect with Mark Coker:

Web: www.smashwords.com

Blog: blog.smashwords.com

HuffPo: huffingtonpost.com/mark-coker

Twitter: @markcoker

Email: first initial second initial at

smashwords.com