Wednesday, December 31, 2014

Smashwords Year in Review 2014 and Plans for 2015

Each year I provide Smashwords authors and publishers a review of our progress in the year as well as hints of our plans for the coming year.  So here goes.

2014 marked another exciting year for Smashwords as we create new ebook distribution tools and capabilities that give our authors and publishers a competitive advantage in the marketplace. 

If you’re new to Smashwords, a brief introduction to Smashwords is in order. 

I founded Smashwords in 2008 to empower writers to become professional self-publishers.  I wanted to transfer the power of publishing from publishers to authors.  Back in 2008, large publishers controlled the printing press, the knowledge of professional publishing, and the all-important access to retail distribution.  Publishers had the power to determine your fate as an author.  No more.  I wanted to make authors the captains of their own destiny.

Over the last six going on seven years, Smashwords introduced our free ebook printing press, Meatgrinder, which made it possible for any writer anywhere to publish an ebook in minutes; we opened distribution for the first time to major retailers and library partners that were previously inaccessible to self-published authors; we developed sophisticated yet easy-to-use publishing tools that help writers and small indie presses publish with pride and professionalism; we worked to actively educate our authors and publishers how to leverage best practices to publish with greater success; and we’ve been fierce (but friendly!) advocates for the rights and long term interests of the indie author community.

We exist to serve our authors and publishers, and we serve you by developing tools and relationships that help you publish faster, smarter and more effectively. Our time-saving tools help you spend more time writing and producing and less time managing multiple upload platforms.

In the years since we launched, Smashwords has grown to become the world’s largest distributor of self-published books.  To the extent we’ve been successful is entirely thanks to the continued support of the authors, publishers and retailers we serve.  You’re running a business, and we realize you work with Smashwords by choice, not by necessity.  Through continuous improvement of everything we do, we will always work to earn and deserve your continued business, trust and partnership.

So let’s take a look at our progress for the year.

Among our service milestones for the year:
  • New distribution channels - We added new distribution partners including OverDrive, the world’s largest ebook supplier serving over 20,000 public libraries, and Txtr, a European retailer.  New partners Oyster and Scribd were brought fully online.
  • Faster distributions - Working in close partnership with all our retail partners, Smashwords dramatically increased the speed and reliability of our distribution systems in 2014.  We’re now shipping multiple times daily to most of our retailers, and near-real time to iBooks, where, for example, and it’s not uncommon for authors to upload a book to Smashwords and see it appear at iBooks the same day.  Faster distributions of new titles and metadata updates give our authors more control over their publishing.
  • Faster sales reporting - We improved the speed of sales reporting.  In May, we introduced our Daily Sales tool which provides next-day and same-day sales reporting from iBooks, Barnes & Noble, OverDrive and Kobo.
  • Added EPUB 3 support - Smashwords now accepts EPUB3 files as part of our Smashwords Direct feature.  EPUB3 gives authors and publishers greater language support and text layout options, including right to left reading and vertical reading.
  • We helped more authors realize their full potential - Smashwords authors bring us their talent, and we give them tools to help realize the full potential of their talent.  Multiple Smashwords authors hit retailer bestseller lists in 2015 as well as national lists such as New York Times and USA Today, aided in part by the power of Smashwords preorders to iBooks, Barnes & Noble and Kobo, and also supported by enhanced metadata tools such as Smashwords Series Manager which improves series discoverability at retailers.
  • Diversification pays off - Our broad distribution network helped authors and publishers diversify their exposure to an industry-wide slowdown in ebook retailing.  Strong merchandising support for Smashwords authors by our wonderful colleagues at iBooks combined with sales growth from new distribution partners FlipKart, OverDrive; Oyster and Scribd helped many Smashwords authors and publishers have a great year.
  • Diversification pays off again - Authors who fully distributed their titles with Smashwords were partially insulated from the dramatic sales drops many Amazon authors reported following the introduction of Kindle Unlimited.  If you know indie authors who only upload to Amazon, invite them to diversify their distribution with Smashwords.
Among our business milestones for the year:
  • Title growth - The Smashwords catalog grew to 336,400 titles, up 60,300 titles or 22% during the year from 276,100 at the end of 2013. 
  • Word count - Smashwords helped indie authors and small independent presses publish over 2.5 billion words in 2015, up 26% to over 12 billion words!
  • Author growth - Smashwords now serves over 100,000 indie authors and small independent presses around the globe.
  • Profitability - For the fourth year in a row, Smashwords maintained profitability.  Profitability is important to our authors and publishers because it allows us to reinvest in the development of new tools and capabilities to serve our authors and publishers.  We continue to achieve this profitability by aligning our interests 100% with the interests of our authors, publishers, retailers and readers.  Unlike many competing self-publishing services organizations, we don’t employ sales people and we don’t sell services or publishing packages.  We only make money if we help our authors and publishers sell books.
  • 26 team members to serve you - We end the year with a team of 26 full-time professionals, up from 23 in 2013, 19 in 2012, 13 in 2011 and 3 in 2010.  This year we made significant investments in technology, distribution systems and finance.
  • Independence - Smashwords remains entirely self-funded without the assistance or interference of outside investors.
  • ALLi Award - The Alliance of Independent Authors (ALLi) named Smashwords its service provider of the year, in recognition for the depth and breadth of our distribution capabilities, our advocacy for authors and our relentless commitment to continuous service improvement to empower the success of indie authors worldwide.
  • INC 500 - INC Magazine named Smashwords to its INC 500 list of America’s fastest growing private companies.  They named Smashwords the #1 fastest-growing media company.  Full credit for this accomplishment goes to Smashwords authors and publishers!
  • Bowker survey - Bowker, in their annual survey of self-publishing services, named Smashwords the #1 producer of ebooks in the U.S.  View the report here (opens a PDF)
  • Forbes America's Most Promising Companies - Forbes Magazine, for the second year running, named Smashwords to its list of America’s Top 100 Most Promising Companies.
Despite our accomplishments in 2014, we’re not finished pushing the envelope.  We still feel like we've only scratched the surface of what's possible.  Our roadmap for 2015 and beyond is exciting.

Here are some hints to our direction.  In 2015, our authors and publishers can expect to see continuous improvements across every part of our business, including:
  • New distribution and merchandising tools that make your books more discoverable and desirable by readers
  • New price management tools that give our authors and publishers more granular control over pricing in multiple currencies and territories
  • New retailer additions to the Smashwords distribution network serving retailers and libraries
  • Improved, more intuitive sales reporting
  • An upgraded Meatgrinder to improve the ease and capabilities of our flagship ebook conversion tool
  • Improved search for the Smashwords retail store
  • ... and some fun surprises that will set the stage for even greater things to come.
On behalf of the entire team at Smashwords I want to thank you for your continued trust, partnership and inspiration.  We’re looking forward to serving you in 2015!

23 comments:

Anna Erishkigal said...

Thanks for a productive 2014 to you Mark and all the helper-elves at Smashwords and hoping for an even MORE productive 2015!

Linda Pendleton said...

Sorry, Mark. All the years I've had books at Amazon Kindle and some with Smashwords, I have never received a "nastygram" from Amazon as you referred to in your email.

"Since no author enjoys receiving Amazon's nastygram price match emails, you have an decisions you might make. If you choose to leave your Smashwords prices as they are (i.e., you choose to eat the VAT hit), you can click to your Amazon Dashboard and lower your prices at Amazon to quell Amazon's price-matching robots. Or, you choose to opt in to the Smashwords VAT Manager tool, we'll adjust you prices so they approximate Amazon's new adjusted prices. Your choice."

Carla Krae said...

Linda, plenty of authors HAVE received an e-mail from Amazon when a price elsewhere dropped below the Amazon price. It's against Amazon's TOS to have any price be lower than Amazon's. They price match free books only because they do not allow 0.00 to be chosen as a price in KDP.

I've had Amazon discontinue a title of mine in the past because a retailer didn't update a price and I wasn't aware until it was too late for Amazon's deadline - which is usually only 3 days.

Stephen Leather said...

I'm with Carla, Linda. I've received dozens of nastygrams from Amazon over the last few years. And yes, they are nasty. They are often quite unfair too because you don't always have control over what other platforms are charging. I am expecting a lot more over the next few days as I have 30+ titles up and won't be tracking all their prices. I'll wait for nastygram to arrive and then change the price. :-)

Inkstain said...

We were quite discouraged after two years of repeated requests that your team flatly ruled out adding the category "international mystery and crime' to the search engine. Amazon has had it for years.

'No more categories' was their written response.

Hope this can finally be addressed, as it is now a basic global funnel (viz Scandinavian noir, etc) for readers who have moved beyond English, cat mysteries, historicals, and American police yarns. You want to be a global player? At least give 'international' a try!

Please spend more attention on areas beyond the obvious genre moneyspinners romance, scifi and fantasy.

Apart from this big disappointment, thanks for improving your service and the wise words on avoiding exclusivity. We have seen sales move higher.

Claudy Conn said...

Okay, I agree about upcoming sales as I know I have personally seen a tremendous drop in sales.
Only one thing I disagree with. I think we (authors) have to spend time marketing because we do need to keep our backlists and 'name' in the limelight to create new readers in a market where so many new indie authors are publishing.
Going to just go with the flow and keep on writing. :)

Peter, petrabooks.ca said...

Satisfied Smashwords publisher with a couple of suggestions.
(1) improve your keyword search of books. We have a children's book about the 1969 Woodstock Music Festival up but it doesn't come up with the word "woodstock".
(2) allow readers on the main page to sort by price more effectively e.g. $4.99 -$9.99 or greater-than-$9.99.

Pauline Christou said...

I look forward to spending another year with Smashwords and seeing what improvements you have in store for us. Although I have had more sales from Amazon, I will never put all my eggs in the Amazon basket. I often use my promotional vouchers to encourage readers to buy through Smashwords or consider other retailers.

I think Amazon has scored an own goal with Kindle Unlimited. This will hopefully make authors change their minds about going exclusive.

Claudy Conn I don't think Mark was suggesting we don't spend any time marketing our books. But perhaps we should spend much less time promoting and more time writing. I know this from experience, too much promotion can make you look spammy. Take a look at some author's Twitter or Facebook timelines. People don't go on Social network sites to be sold to all the time. Yes, keep on writing, that is your best promtional tool.

Pat Donovan said...

my predictions? Three leaks, one bucket.

golbal monoculture + cascade attacks.

indie lawsuits against resellers... anything that hits a screen can be copied... and resold.
brit laws on 'orphan' (ie: unknown authors) allow scrapers to have a field day.
third world markets, while tiny.. (want a copy of shriek re-dubbed into PC Persian tirades?)

we have already had censorship scandels rumble thru. THAT's almost normal. free speech isn't, unfortunately.

the third leak is slow sale.
reporting methods there, mostly.
expect a lot of corporate oopsie's.
sharks prirannha and vermin.

Maria said...

Happy New Year to Mark and the entire Smashword's team--especially Angela H. and Samsang who answer my help tickets promptly and professionally!!!

Thanks for negotiating deals with all the retailers. My favorite addition this year has been SCRIBD and overdrive. I love SCRIBD so much, I'm planning a subscription giveaway this week on the blog with author Margaret Lake.

Y'all ROCK! Here's to a great New Year and continued partnership!!!

Maria Schneider
www.BearMountainBooks.com


Laraine Anne Barker said...

Don't you get thoroughly fed up with greedy governments that get more from your books than you do? At least in New Zealand this tax gets called something far more appropriate than VAT: GST, which (whether our ghastly Tory Prime Minister likes it or not) is universally known as Grab Snatch Take.

joleenenaylor said...

Thanks Mark and the rest of the Smashwords gang for all you've done this year!

I have also received the amazon nastygrams in the past, though here's a funny one. I have a book free on smashwords, B&N etc. and have notified amazon multiple times about it. Their reply? "We determine your price"... um... okay... so even though I notified you multiple times (both used the "report" feature and finally sent them a direct message through "contact us") They are choosing to break their own ToS? It's craziness.

Looking forward to 2015, though I think as per mark's previous post sales are only going to get harder from here on out.

Bill Kendrick said...

@peter Thanks for letting us know. I noticed our search indexer had a hiccup. Your book's coming up (top of the list, even!) now. https://www.smashwords.com/books/search?query=woodstock Happy New Year!

Inkstain said...

You have time to fix 'Woodstock' in the index, but you can't do anything about an entire missing category, "International mystery and crime', Bill?

Are you the 'tech person' who vetoed this essential category some months back?

Wondering why, as ever,

djmills said...

The one update I am waiting on is when are you going to change the ISBN number field back to a text field like it was at the start?
You do not add, subtract, multiply or divide the field. It is a text field.
That way, when I download the xls file I can extract meaningful data into my database, not the 9.78145E+12 as displayed.
Thanks.

J.M. "Peng" Hardin said...

I'd love to see Smashwords get authors the option of getting on Google Books. I know we can upload things there ourselves (like I do with Amazon) but it would be a lot easier to keep up with things if we could get in Google Books via Smashwords like we are with the other big ebook retailers. I've spoken to an Android user about my ebooks and they don't even know Aldiko exists, but they know about Google Books.

Rory Macbeth said...

22% more titles and 26% more words--it's easy to do the math--for some--it's a word swamp--a sentence life-sentence--but, I kid--I love the stats, Mark--keep 'em up--I lost the research on price v. word count--can you run it again?

Nirmala said...

Hi Mark

I would like to ask that Smashwords create some kind of user's forum on the site for authors. It is frustrating when problems arise to not be able to search a discussion forum where other authors may have already dealt with the same issue and found a solution. Most online service providers (including of course KDP) provide such a feature.

This is especially important to me right now as about two months ago I discovered that Kobo has been selling versions of my wife, Gina Lake's, and my ebooks that are at least six months old and possibly much older. Last summer, we updated the cover images of most of our books. But when I purchase and download one of our books on Kobo (using a brand new Kobo account), the interior is an old version of the book with the old cover images (even though the cover images displayed in the online store are the more recent ones). So it appears that Kobo is updating the prices and cover images in their store, but not bothering to update the interior files that they are selling to their customers.

I would love to be able to discuss this issue with other Smashwords authors to see if they are having similar problems, but alas, there is no forum for doing so. Please add this feature to Smashwords for everyone's sake. It would allow these problems to be discovered and addressed sooner rather than later. I have been going back and forth with customer service about this for two months now and was even told incorrectly a few weeks ago that Kobo had updated all of our books. A forum would allow someone having a problem like this to get more attention and response from Smashwords, and to find out if other authors are having a similar issue. it could be helpful to Smashwords also as it would be more likely that you would catch these problems as they occured, instead of having them stretch out for months.

Thanks for all you do with your service. I hope it continues to improve and a user's forum would help that process.

Kathryn Loch said...

I am so very glad that Smashwords now accepts Epub 3! Whoo hoo! Thank you, Mark!

I must admit frustration with Amazon, Kindle Unlimited hits and they also change some key issues behind the scenes. In my genre (historical romance) all of a sudden everyone and their brother is putting out box sets for $0.99. I know exactly why this is happening and until I did the same I took a big hit in sales. As long as those prices stay, then it's going to be very difficult to make money.

I have to admit, agency pricing is something that makes the accountant/business manager in me just cringe. Artificial price controls are not good for a free market from a basic economic premise.

But with KU and Amazon policies, we technically don't have a free market there either, so as an author with more than a couple of books in this electronic fight, I definitely see the agency model as needed now.

Kindle Select when I started as an indie helped me tremendously because I used it to market books as one would use the "loss lead." I selected two titles to be my loss lead and let those run with the freebies. As time passed I put other titles in and they became loss leads. It paid off big time. Now that I have a readership and because of Kindle Unlimited, I'm pulling books out of the program, except for one title that typically runs $0.99 cover price, that I have nominated again as a loss lead. As my book expire in the Kindle Select/Unlimited program, I'm expanding them to other markets like Smashwords as quickly as possible.

2015 will definitely be a challenge but I hope all the hard work will pay off.

Greg Strandberg said...

25 days without a blog post. It's a joke, really. Why don't you try to put some effort into telling us when we'll get paid, Mark?

Why shouldn't I switch to D2D this year? Can you tell me that?

I get paid once a quarter, your reporting is antiquated...why should I do business with you, Mark?

Mark Coker said...

Hi Greg, glad to hear you want to see more blog posts. There will be more when I have worthwhile stuff to share.

Payments for this quarter will go out on time as they always do. This coming week is the week.

As mentioned above in the post, improved reporting is one of our top priorities. We've got a lot of great ideas to make our reports more valuable and more accessible, and as we get closer on this we'll be soliciting direct input from our authors and publishers.

We definitely want to increase payment frequency. It's one of many items on the roadmap. I'm not prepared to set expectations for the date yet because other projects stand in front of it. We prioritize developments that help our authors reach more readers and earn more over the long term. So increased payment frequency is coming, but likely after some other big things. Thanks.

J.M. "Peng" Hardin said...

I'm glad to see you have some good things in store for us but is Google Books one of them? I've asked a few times in email via the help links on the site and in comments on posts and keep hearing crickets. I understand it may not be an easy thing to put together but can you at least say if it's in the stack of things to do or should I simply consider setting up my second direct relationship with an ebooks store (KDP is the other one)?

Michael Spelling said...

Great article! Thanks!