Thursday, June 30, 2011

Agents Entering E-Publishing Services Arena

Back in December, I predicted the next chapter in the indie ebook revolution would be written by literary agents.

It's starting to happen, but like any new idea the early agency and author adopters may face vilification before they're recognized as heroes.

Some critics claim that agents-as-publishing-service-provider creates a conflict of interest. Hogwash. Agents owe it to their clients to consider all opportunities to connect an author's books with readers.

Some indie authors have piled on Joe Konrath for his decision to allow Dystel & Goderich Literary Management (DGLM) to manage the e-publishing of his forthcoming title, Timecaster Supersymmetry. At least one anonymous poster claimed Joe is a hypocrite for abandoning the indie ethos he has so effectively championed for several years.

His detractors miss the point. Joe's not a hypocrite. He's a smart business person.

The power of publishing is shifting to authors, and authors have the flexibility to enter into myriad business relationships of different shades and colors. Now is the time to experiment and take chances.

The author is running a business. The most successful authors are great writers who make smart business decisions. I often see talented authors undermining their success with poor business decisions grounded in fear and uncertainty (I touched on this last year in my post, the Seven Secrets to Ebook Publishing Failure). Joe's critics succumb to the FUD.

Smart businesspeople realize that just because they can do something on their own, doesn't mean they should do it on their own. Smart businesspeople align with business partners that add value.

Consider everything involved in getting a book from a writer's brain to the eyeballs of readers.

There's research, writing, revising, more revising, editing, proofing, book production, cover design, pre-pub marketing, sales, distribution, post-sales marketing, retailing and fulfillment.

These essential inputs are services. At one far end of the spectrum, the indie can go 100% Do-it-yourself and perform all the services on their own. At the other extreme end of the spectrum is the full-service traditional publisher.

Between these two extremes lies a vast middle ground where indies can avail themselves of the value-added capabilities of service providers like agents.

Literary agencies have an opportunity to do for authors what some authors don't want to do on their own. The trend also means agents now have the ability to engage at a deeper level with all their clients.

Some of the commenters on Joe's post questioned the value of agents' e-publishing ventures. In response, Barry Eisler poked fun at the DIY-extremists:
I just wanna say that real self-published authors write their books longhand using quills they've made and inks they've concocted from materials culled from the forest floor, on parchment they've pounded out with their own fists from trees they've felled with their own neolithic tools, and sell these books by hand in the public square, which they reach shoeless and on foot, eating roots and berries they gather along the way. Anything else is corruption, sabotage, and hypocrisy! Fight the man, people!
I'm surprised by the number of writers so quick to pass up opportunities in favor of jealously guarding that X%. Some writers have a near-allergic aversion to allowing any intermediary to profit from their book.

The Equity Equation

There's a simple analysis any author can perform when deciding whether or not to cede that XX% to an agent, a distributor, a retailer, a publisher or whomever.

Paul Graham, the venture capitalist, published an elegantly simple formula in 2007 called The Equity Equation that entrepreneurs can use to determine the benefit they must receive to justify giving XX% of their company to an investor.

The formula works equally well for authors. When Joe gives DGLM 15%, it's easy to determine the minimum amount of value-add DGLM must provide for Joe's decision to be a smart one.

Using the formula of 1/(1-n) where n = .15, we see that if DGLM's involvement can increase Joe's results 17.5% above what he'd otherwise accomplish on his own, then Joe's ahead in this partnership. Good agents can earn their entire keep with a single phone call, and great agents work that magic continuously for the lifetime of the relationship.

Top tier agencies like DGLM are successful because they're expert at delivering multiples of that 17.5% for their clients.

Joe gains not only from DGLM's investment of time, money, smarts, connections and enthusiasm, but he also gains time to produce more writing.

I'm reminded of a pearl of wisdom from my mom:
If you plant a $15 tree in a $5 hole, you get a $5 tree.
The writer's book (or the writer's career) is the tree, and the hole is the environment you create to establish roots and acquire the life-sustaining nourishment of readers and sales.

If a quality service provider is willing to invest alongside an author and fertilize the effort, the author is penny-wise and pound foolish not to consider the options.

Should agents provide indie ebook publishing services to their clients? Definitively yes. They'd be irresponsible not to.

A growing number of literary agents are beginning to use Smashwords for their clients' ebook distribution. This is good news for all indies.

Monday, June 27, 2011

E-Reading Device Ownership Surging, Says Pew Research

The percentage of U.S. adults who own a dedicated e-reading device is surging, according to new data released today by Pew Research.

According to Pew, for the month of May 2011, e-reader ownership grew to 12 percent, up from six percent six months ago.

Tablet ownership grew from five percent to eight percent in the same period.

Pew found interesting overlap among those who own both a dedicated e-reading device and a multi-function tablet. Three percent of US adults own both.

While at first glance that may seem insignificant, that three percent means 25 percent of dedicated e-reading device owners also own a tablet.

Five percent of consumers own a tablet but not a dedicated e-reader. This means 37.5 percent of tablet owners also own an e-reader.

Bottom line, reading is quickly moving to screens. I wouldn't be surprised if come January Pew shows e-reading device ownership reaches or surpasses 20 percent. We'll probably also see the lines of distinction between tablets and e-readers blur over the next six months as e-reading devices adopt more multi-function features.

To access their full report, click here.

Tuesday, June 21, 2011

Conversations on the Future of Publishing

Michael Wolf, the Vice President of Research at GigaOm, today released a podcast interview with me. You can access it here at his podcast site, Elitzr.

It was a wide-ranging conversation. We talked about our progress at Smashwords; best practices of the most successful indie authors; why a great book is an author's single most important marketing tool; ebooks as apps; how the power of publishing is shifting to indie authors and small publishers; the future of Big Publishers; the changing attitudes toward self-publishing; and what's next for Smashwords.

My thanks to Michael Wolf for helping to shine a bright light on indie ebook revolution.

What Can Big Publishers Learn from Self-Publishers?

This Thursday at 10am Pacific, I'm participating in a free O'Reilly webcast titled, What Traditional Publishers Can Learn from Self-Publishers.

Fellow panelists include Chad Jennings of Blurb, Pete Nikolai of Thomas Nelson Publishers, and Bob Young of Lulu. Click here to register and learn more.

The panel is led by the amazing Joe Wikert, General Manager and Publisher at O'Reilly Media. Joe also writes the Publishing 2020 blog. A bit of trivia: Back in early 2008, Joe was among the first three people to receive an advance sneak peak of the Smashwords platform pre-launch. The other two were David Rothman, the founding editor of Teleread, and Eoin Purcell in Ireland.

REPLAY AVAILABLE: Click here to listen to the archived replay until September 22, 2011.

Saturday, June 4, 2011

Three Year Retrospective, and a Look Ahead

Last month we celebrated our three year anniversary.

I thought it would be fun to share some traffic data in the form of a picture that tells 2.2 billion words.

At left is a chart showing weekly traffic to the web site since May 2008.

If you look carefully (click to expand the image), you'll see it's tough to discern the blips for most of 2008. Those were the early days when we were little more than a curiosity.

Back in 2008, self-publishing didn't command much respect. It was seen as the publishing option of last resort for failed authors. It wasn't uncommon back then for me to receive emails from previously print-published authors who'd write, "Do you think I'm nuts? There's no way I'm going to allow my work to appear alongside these amateurs." I don't receive those emails anymore.

I founded Smashwords with the firm conviction there's a vast human potential trapped inside the minds and fingertips of unpublished writers. I thought if we could provide the enabling tools to help writers unleash their potential upon the world - to be judged by readers - that great things could happen.

Today, great things are happening. Indie authors are inching up the best-seller lists, and their success inspires the next wave to go indie. Yet commercial success and the promise or potential thereof is not the primary driver for the indie revolution. Writers write for reasons different than publishers publish.

More writers will write, more will publish, and more will bypass publishers to connect directly to readers. Big Publishers will become an afterthought in the minds of tomorrow's indie author.

The publishing industry has no clue what's about to happen. Talk to any Smashwords author or publisher, especially those who were once worked with New York, and they'll tell you where things are headed.

A forest fire is about to consume the dead wood, and out of the ashes will spring forth a new and vibrant publishing ecosystem offering unprecedented diversity of literary riches more magnificent than anything ever imagined. This is inevitable. In fact, it's already happening at Smashwords and our retail distribution partners Apple, Sony, Barnes & Noble, Kobo and Diesel.

It's what happens when writers are given the freedom to publish on their own terms, and readers are given the freedom to read what they like. It represents the inevitable progression of human intention enabled by the Internet revolution.

The genie of human potential has escaped the bottle. You, my dear indie author or publisher, will write the next chapter.