Smashwords Year in Review 2013 - Indie Authors the Stewards of Publishing's Future

Welcome to my annual Smashwords year in review.

It was another amazing year.

On behalf of all employees at Smashwords, I want to start by thanking every Smashwords author, publisher and agent that publishes and distributes with Smashwords.  We serve at your pleasure and we appreciate your trust, partnership and support.

I also want to thank the retailers and library aggregators that comprise the Smashwords distribution network.  Every day, you work tirelessly and often without adequate recognition for the amazing service you provide our authors and publishers.  You receive, ingest and merchandise our books to your customers. You introduce our authors' books to tens of millions of readers each year.  We work for our authors by working for you.  Your success is our authors' success, and we will reciprocate your support by working for your continued success. 

The Smashwords Backstory

If you're one of the 25,000 new authors who joined the Smashwords family this year, welcome.  A brief introduction is in order.

Back in 2008, I created Smashwords to give indie authors a seat at the publishing table.  Back then, a time I refer to as the Dark Ages, traditional publishers held oligopolistic control over the
printing, publishing and distribution of books. 

The control was oppressive. Writers were forced to bow subservient to the whims of big publishers.  Publishers decided which writers became published authors. Although they published many great books, over the course of decades they crushed the dreams of thousands great writers whose talent is now lost to humanity.

Publishers decided what readers could read.  Their decisions were guided by the publisher's perception of a book's anticipated commercial merit.  Their decisions were guesses.  When a book hit the bestseller lists, publishers patted themselves on the back for discovering and supporting the author.  When a book failed, the author's future publishing opportunities often failed with it.

The dirty little secret of publishing is that in the end, publishers were simply throwing what they thought was their best spaghetti against the wall.  Readers were the deciders of commercial success, not publishers.

It's not that publishers are bad.  Inside the hallowed halls of their Manhattan and London skyscrapers, publishers are made up of thousands of passionate, intelligent and ethical people who love books and have dedicated their lives to discovering, developing and publishing great books by great authors.  The problem with publishing was not a problem with the people of publishing, it was a problem with the business of publishing.

Back before the time of books as digital bits, most legacy publishing practices made sense.  They were unable to take a risk on every author.

With the advent of ebooks, self publishing platforms such as Smashwords, and democratized distribution to major retailers, a new world order is emerging.  It's a new world order where the power of publishing is shifting from the halls of publishers to the hands of writers.  It's a world where the suffocating gatekeeping mentality  - which once measured a book's worth through the myopic lens of perceived commercial merit - can now be cast away.

Books are worth more than dollars, pounds, euros and yen.  Publishers don't know what readers want to read, and they have no right to control what writers want to imagine, write or publish.  Writers deserve the freedom to publish what they want, and readers deserve the freedom to read what they want.  The new world order is beautifully democratic and fair.

This is an exciting time to be a writer, author, publisher and ebook distributor.  All of us are smack dab in the middle of turbulent cross-currents of change, innovation and opportunity. 


Indie Authors are the Stewards of Publishing's Future

If this new world ever feels scary or uncertain, that's because it is.  But despite the uncertainty, one fact will remain true forever:  Books are magical, writers are the magicians, and as long as great writers continue to write and publish, books have a permanent place in our lives.


You - the indie author - are the future of publishing.  Your publishing, distribution and marketing decisions will determine the course of the publishing industry.  You're in charge now.   Lead us well.



Now on with the Smashwords year in review.

Notable Smashwords Business Milestones for 2013

It was another great year at Smashwords, and a great year for Smashwords authors.  Here are some notable business milestones for the year.

• Title growth - Smashwords now publishes over 275,000 titles, up 45% from one year ago.
• Authors - We now support the publishing strategies of over 83,000 authors from every corner of the globe, up 42% year over year.
• Record revenue - Our authors' sales grew to $20 million, up 33% from $15 million the year before.  We're proud that 100% of our revenue in 2013 came from the sale of books to readers.  We don't sell publishing packages and we don't employ sales people.  Our income is entirely based on our commission on book sales to readers which for most sales is 10% of the retail price.
• Employee count - The Smashwords team grew to 23 people, up from 19 in 2012, 13 in 2011 and 3 in 2010.  This year we made significant investments in technology, distribution systems and author and customer service.
• Profitability - Smashwords has been profitable now for three years.  Profitability is important because it means we're here for the long haul and can reinvest in you.  We're self-funded, sustainable and will continue to grow the business on your behalf.  We've grown the business without the assistance or interference of outside venture capital.
• Bowker named Smashwords #1 ebook producer of 2012 - In Bowker's annual survey of US ebook publishers, Smashwords was named the largest producer of ebooks in 2012 based on ISBN count.  The recognition underscores Smashwords' position as the world's largest distributor of indie ebooks. 

Notable Smashwords Service Milestones for 2013

Smashwords made significant investments in 2013 to better serve the publishing and distribution needs of our authors and publishers.  At Smashwords, we think of our authors and publishers as clients, not customers.  It's a business relationship and we exist to serve you. Here are some notable milestones on the service side of our business.

• Smashwords website redesign - Earlier this month we launched a new responsive design for the Smashwords website.  The site is now more attractive and mobile-friendly than ever before.  Expect more improvements to the site and publishing platform features and interfaces in 2014!
• Preorder distribution - After months of testing, in July we introduced preorder distribution to Apple, Barnes & Noble and Kobo.  Preorders are an incredibly powerful sales and merchandising tool.  Many Smashwords authors have leveraged preorders to hit the bestseller lists.
• Smashwords Interviews - In August, we launched Smashwords Interviews, a fun tool that helps readers discover the story behind the author.  It's a self-interviewing tool.  Already, over 4,000 interviews have been posted.  They're amazing!  Complete your interview today if you haven't done so already.
• Publishers Weekly/Smashwords Bestseller List - In June, Publishers Weekly magazine started publishing our top 25 bestseller list each month.  The list is based on aggregated sales reports from Smashwords retailers and the Smashwords store.  If you're distributed by Smashwords, you've got a shot at the list!
• Expanded distribution - We expanded the Smashwords distribution network to include Flipkart (#1 bookseller in India) and two subscription ebook services, Oyster and Scribd.  We've signed additional distribution agreements which we'll announce in the months ahead.
• Series Manager - In September, we launched Smashwords Series Manager.  Series Manager collects enhanced metadata that makes it easier for readers to identify and discover books in a series.  The data also sets the stage for retailers to improve the discoverability of our series books.  Today, 38,211 books are attached to 10,419 series.  If you haven't attached your series books with Series Manager, do it now!
• Support for serials - The launch of Series Manager allowed us to modify our Terms of Service to allow serialized publications.
• YouTube tutorial series - We launched a series of YouTube ebook publishing tutorials and workshops, several of which are narrated versions of recent workshops I've presented at writers conferences.  There's also a helpful video on how to add navigation to your Smashwords ebook, and how to integrate your Smashwords Library with your Dropbox account.  Expect more tutorials in 2014. Is there a topic you'd love see us address?  Suggest it below in the comments.
• Apple tickets - In December we added a feature in the Smashwords Dashboard that reports Apple's change requests.  If Apple's QA team finds a problem with your book can prevent a listing, you'll find it there.  The feature helps authors correct issues faster so they can get books listed quicker at the world's second largest global seller of ebooks.

What's Coming in 2014
As I mentioned in my 2014 predictions post, indie authors will face significantly increased competition from traditional publishers in the year ahead.  2014 could be the first year where ebook sales, measured in dollars, decrease.  Despite that ominous possibility, unit sales will increase and the opportunities before authors remains greater than ever.  Our job at Smashwords is to provide you the tools and knowledge to compete, and our development roadmap is informed by this goal.

Our development roadmap for 2014 is really exciting. If writers are the magicians behind books, then the engineers at Smashwords are the magicians behind the new enhancements - large and small - that we make at Smashwords every week.  Our authors tell us what they want, I weave the ideas into initiatives and our engineers make these ideas happen.  Without tipping our hand too much, in broad strokes here's a hint of what you can expect to see in 2014:

• Distribution systems - We'll work to give you improved control over more aspects of your distribution.  We're already shipping daily, at least fives days a week to Apple, B&N and Kobo.  In 2014 we'll increase the shipment frequency further for retailers that can support it.  Faster shipments mean faster time to market and greater, faster control over pricing and metadata updates. 
• Reporting systems - We'll overhaul our reporting systems so you have faster, more intuitive access to sales data and trending information.  We improved the speed of sales reporting in 2013, and in 2014 we'll improve it even further.
• New book marketing tools - We'll introduce multiple new tools that will help authors improve the discoverability and sales of their books.
• Skunk works - There are some projects so secret I won't even give a hint.  Some of the projects are foundational in the sense that their true potential won't be apparent until after we build additional features on top of them.   Rest assured all projects we undertake will be focused on making Smashwords a more powerful publishing and distribution platform that gives our authors real advantage in the marketplace.

Thank you again for your past and future support.

We realize you have many choices for ebook publishing and distribution.  When you work with Smashwords, you are directly supporting our mission to help you reach more readers.  By distributing to major retailers through Smashwords, you further our ability to advocate on your behalf, and to continue investing in tools and services that will benefit the entire indie author community.


We appreciate the opportunity to serve you.

Happy New Year!

2014 Book Publishing Industry Predictions - Price Drops to Impact Competitive Dynamics

It’s that time of year again when I polish my crystal ball and stick my neck out with predictions for the year ahead.

Last year I went out on a limb with 21 predictions.  Looking back on them now, several were spot on, several were premature but will still play out, and some were dead wrong.  That’s the fun of the prediction game.  Even incorrect predictions, analyzed in retrospect, help shape our understanding of the present and future.

Predictions stir our imagination of what’s possible.  By imagining what’s possible, indie authors can prepare for the future, or take steps to realize the future they desire.

This year, I bring fourteen predictions for 2014.

1. Big publishers lower prices – Traditional publishers have always fought tooth and nail to hold the line on ebook prices.  By maintaining high prices, they left the sub-$5.99 market for ebooks wide open for indie authors to exploit.  For several years, indies have enjoyed this playground all to themselves.  The results of our 2013 Smashwords survey illustrated the competitive advantage indies received by pricing low.  Our 2013 survey found that books priced $2.99 and $3.99, on average, received about four times as many unit sales as books priced over $7.99.  This pricing advantage helped many indies out-sell and out-compete the traditional publishers.  It helped indies build fan bases at a rapid clip.  For indies who could write and publish low-priced books that were as good or better than what New York was publishing, placement in the bestseller lists became more achievable than ever before.  For much of 2013, it wasn’t uncommon to see indies holding up to half of the top 10 bestseller slots at major retailers on some days.  Big publishers have taken note.  In 2013 big publishers began competing more aggressively on price with temporary price promotions.  Until recently, it was rare to see a traditionally published book priced under $4.00.  In 2014 their temporary price promotions will give way to a new normal.  Discounting is a slippery slope.  Once customers are conditioned to expect big-name authors for $3.99 or less, the entire industry will be forced to go there.  The huge pricing advantage once enjoyed by indies will diminish in 2014.
2. When everyone is pricing sub $4.00, price promotions will become less effective – If readers have an unlimited supply of high-quality books from their favorite authors at under $4.00, it means factors other than price will gain importance.
3. Ebook growth slows – Here comes the hangover.  After a decade of exponential growth in ebooks with indies partying like it was 1999, growth is slowing.  We all knew this day was coming.  Year over year growth of 100% to 300% a year could not continue forever.  The hazard of fast-growing market is that it can mask flaws in business models.  It can cause players to misinterpret their success, and the assumptions upon which they credit their success.  It can cause successful players to draw false correlations between cause and effect.  Who are these players?  I’m talking about authors, publishers, retailers, distributors and service providers – all of us.  It’s easy to succeed when everything’s growing.  It’s when things slow-down that your mettle is tested.  The market is slowing.  A normal cyclical shakeout is coming.  Rather than fear the shakeout, embrace it.  Let it spur you on to become a better, more competitive player in 2014.  Players who survive shakeouts usually come out stronger the other end.
4. Competition increases dramatically – With hundreds of thousands of new books published annually, and with retailer catalogs swelling to carry millions of titles, it may come across as trite for me to predict that completion will increase in 2014 for indies.  Yet in 2014, the competition faced by indies will increase by an order of magnitude, and will make some indies wish it was 2013 again.  The ebook publishing playing field, which until recently was significantly tilted in the indies’ favor, has now leveled a bit.  Yet indies still enjoy a number of competitive advantages, including faster time to market, greater creative freedom, closer relationships with readers and thus a better understanding of reader desires, higher royalties rates and ultra-low pricing flexibility including FREE.
5. Ebook sales, measured in dollar volume, will decrease in 2014 – Yikes.  I said it.  The nascent ebook market is likely to experience its first annual downturn in sales as measured in dollar volume.  This will be driven by price declines among major publishers and by the slowing transition from print to screens.  Although readers will continue migrating from print to screens, the early adopters have adopted and the laggards will shift more slowly.  Another driver of the drop is that the overall book market growth has been moribund for several years.  As ebooks as a percentage of the overall book market increase, it means the growth of ebooks will become constrained by the growth and/or contraction of the overall book industry.  Global sales in developing countries remain one potential bright spot that could mitigate any sales contraction.
6. Ebook unit market share will increase – Ebook consumption, measured in unit sales and downloads, and measured in words read digitally, will increase in 2014.  The industry-wide sales slowdown, caused by the drop in average prices, will mask the fact that more books will be read than ever before.  This is great news for book culture, and good news for indies who despite the loss of their once-powerful price advantage, will still be positioned to profit more from low prices, or to compete at ultra-low (sub $3.00) price points than traditionally published authors.
7. A larger wave of big-name authors will defect to indieville – Multiple market forces will conspire to cause a large number of traditionally published authors to turn their backs on big publishers.  Publishers will try to hold the line on their 25% net ebook royalty structures, which means big authors will see their royalties suffer as prices drop and as the unit sales advantage of low prices decreases, and as the disadvantage of high prices increases.  At the same time, readers will continue to transition from print to ebooks, making the print distribution to physical bookstores less important, and thus weakening the grip big publishers once had on bigger-name authors.  Big authors, eager to maximize their net, will feel greater impetus to emigrate to indieville.
8. It’s all about the writing – It’s back to basics time.  In a world where readers face an unlimited quantity of high-quality low-cost works, the writers who achieve the most success will be those who take their readers to the most emotionally satisfying extremes.  Books are pleasure-delivery devices.  It doesn’t matter if you’re publishing a cookbook, romance novel, gardening how-to, memoir or political treatise.  Your job as the indie author is to write that super-fabulous book.  That involves great writing and professional-quality editing.  It also means avoiding all the mistakes that create unnecessary friction that prevent readers from discovering, desiring and enjoying the book.  To understand these points of friction, and how to avoid them, check out my discussion of Viral Catalysts in The Secrets to Ebook Publishing Success, or in my Youtube video on best practices.
9. All authors become indie authors - Back in the dark ages of publishing, you were either traditionally published or weren't published.  Writers who couldn't get a publishing deal were seen as failures, because without the access to the publisher's printing press, distribution and professional know-how, it was virtually impossible to reach readers.  Today, failure is not an option.  The next generation of writers can begin writing their book with the full confidence that one way or another, it will get published.  Traditionally published authors now realize they have desirable publishing alternatives they never had before.  Once a writer - any writer - comes to the realization that the power in the publishing industry has transfered from publishers to writers, it opens up a new world of possibilities.  Publishing no longer becomes an either/or question.  The best writers will have the option to publish independently AND traditionally, or do one or the other.  It's their choice.  Both options are worthy of consideration by all writers, and can be mutually complementary.  Even if you're a traditionally published author today, you're an indie author because you decide what happens with your next project.
10. Subscription ebook services will change the game – If the ebook subscription services – the most notable of which are Scribd and Oyster – can make their business models work, then they’ll drive a game changing shift in how readers value and consume books.  I examined the potential implications of this in my two-part blog post on this model (read part one | read part two) .  For ebook subscription service users, reading will become an abundant resource that feels free.  It’ll become a utility service in the same way that water and electricity are utilities.  When we flip the switch to turn on a light, or when we turn the knob on the faucet to brush our teeth, we’re not thinking about how our next 60 seconds of that service will cost us one or two cents.  We pay our monthly service fee, and for the most part we use the utility as much as we want.  With ebook subscription services, the reader will pay $9 or $10 a month and enjoy virtually limitless reading.  Readers will be relieved of the cognitive load of having to decide if a given book is worth the purchase price.  Instead, they’ll surf and sample books with minimal friction, as if every book is free.  The reader’s attention, and the book’s ability to hold the reader’s attention, will become the new factor in determining a writer’s success.  Even if these subscription services fail, they'll change the future of publishing by giving readers a taste of friction-free reading-as-a-service.  It's a taste readers are unlikely to forget.
11. Traditional publishers will reevaluate their approach to self-publishing – The vanity approach to self-publishing, as witnessed by Pearson/Penguin’s acquisition of Author Solutions (operates AuthorHouse, iUniverse, BookTango, Trafford, Xlibris, Palibrio, others…), has shown itself to be a boondoggle that harmed the brands of all traditional publishers.  I predicted this last year.  The Author Solutions business model is wholly dependent upon making money by selling overpriced services to unwitting authors.  Their business model is expensive at best, and unethical at worst.  It’s about selling $15,000 publishing packages to authors who will never earn the money back.  The model represents the antithesis of what the best and proudest publishers have always represented.  Great publishers invest in their authors.  The money flows from reader to retailer to publisher to author, not from author to publisher.  At the same time Author Solutions has tarnished the reputation of all traditional publishers - even those not engaged in such practices - the indie author revolution has continued in full swing.  Indies are stealing market share.  Indies have learned to publish like professionals.  Many indies no longer shop their books to agents and publishers, and instead choose to publish their books directly to readers using self-serve publishing and distribution platforms such as Smashwords, or KDP, Nook Press, and others.  Publishers are losing access to the critical deal flow that is their lifeblood.  I talked about this in my discussion of black swans in last year’s predictions.  If they lack an effective service offering for indie authors, the big publishers risk finding themselves on the wrong side of history as authors move on without them.  The stigma once associated with self-publishing is melting away as the stigma of traditional publishing grows.  How can publishers stem the bloodletting and recapture relationships with authors?  The answer will come by publishers reevaluating their attitude toward authors.  They must recognize that publishing is a service, and that they serve at the pleasure of authors.  Now that authors have choices, the publishing game can no longer be about, “What can the author do for the publisher?”  Authors no longer need to bow subservient to publishers, so business models based on this old practice and attitude will be rejected.  The new publisher mantra must be, “What can the publisher do for the author that the author cannot or will not do on their own?” 
    
    Publishers need to broaden their author services menu by creating an inclusive business model that allows them to take a risk on every author, to be able to say “Yes” to every author when the prior attitude was to say “No.”  Authors want a spectrum of options, from self-serve to full-serve, and they shouldn't have to shell out cash to their publisher for any option.   Publishers must abandon the culture of “No,” because authors no longer have the patience or tolerance to hear “No.”  Authors have choices, and they’ve gained a taste for the joys of self-publishing.  What’s this new model, where the publisher can say yes to every author, yet still earn a profit?  The answer: they need to build or acquire their own self-serve publishing platform. A self-serve platform would allow them to take a risk on every author, and to form a relationship with every author.  By operating a free publishing platform, the publishers would have the ability to serve the diverse needs of all authors.  DIY authors would select the self-serve option.  Authors with proven commercial potential who don't want to hassle with the responsibilities of being one's own publisher might opt for a path somewhere along the spectrum between DIY and full-serve (what has been heretofore been known as traditional publishing), assuming both the author and publisher desire that.  The compensation models and level of publisher investment could vary based on the level of publisher service.  Such a full-spectrum approach to publishing, where authors pay nothing, is 100% aligned with the author’s interests, and 100% aligned with the best practices of the best publishers.  A good self-serve platform doesn't employ sales people.  It doesn't take money from authors.  And that’s how it should be.  So the question is, can publishers introduce their own free self-serve platforms to broaden their services offerings?  Time is running out.
12. Platform is king – Platform is your ability to reach readers.  Authors who can build, maintain and leverage their platforms will have a significant competitive advantage over those who cannot.  Think of your platform as a multi-layered infrastructure that allows you to reach both new and existing fans.  Elements of this infrastructure include your followings on Twitter, Facebook and the RSS feed of your blog.  It includes the breadth of your distribution (more retailers is better than fewer), your uninterrupted presence at each retailer for every book, and the reviews at those retailers.  It includes the number of authors who have “favorited” you at Smashwords, or who have added your books to their booklists at Goodreads.  It includes subscribers to your private mailing list.  It includes your celebrity, and your ability to leverage social media or traditional media or the love of your fans to get your message out.  There are two primary factors that drive sales of any product or brand.  The first is awareness.  If the consumer is not aware of your product or brand, then they cannot purchase it.  You need to put your product in front of a consumer and gain their attention before they can consider it.  The second is desire.  Once a consumer is aware of your product or brand, they must desire it.  As I talk about in my Secrets book, the author is the brand.  Your job as the author is to build awareness of your brand, and to build, earn and deserve positive desire for your brand.  Awareness plus desire create demand for your product.  This is why platform will become more important than ever in 2014.  Your platform helps you get the message out to existing fans who already know and desire your brand, and helps you reach new fans who will attach their wagons to your horse.  The larger your platform is, the easier it is to grow your platform further, because platforms grow organically.
13. Multi-author collaborations will become more common – In 2013, I observed a marked increase in the number of multi-author collaborations.  I’ve been encouraging multi-author collaborations for a few years in the Smashwords Book Marketing Guide, but 2013 was the year the practice really took hold.  Authors are collaborating with fellow authors in their same genre or category on box set compilations of existing and original content.  These collaborations are often competitively priced and offer readers the opportunity to discover multiple new authors in a single book.  The collaborations also enable multiple authors to amplify each other’s marketing efforts by leveraging each other’s platforms.
14. Production takes on increased importance in 2014 – One of the most important secrets to ebook publishing success is to write more books.  As a writer, your writing is your unique creation.  It’s your product.  Authors who write great books (and produce more of them), are the authors who build sales and platform the fastest, because each new book represents an opportunity to please existing fans and hook new ones.  Organize your time to spend more time writing and less time on everything else.

View some of my previous predictions:
2013 Predictions at the Smashwords blog (published Dec 21, 2012)
2011 Predictions at GalleyCat by Mark Coker (published Dec 28, 2010)
10-Year Predictions at GalleyCat By Mark Coker (published Jan 4, 2010)

Did my crystal ball miss anything?  Please add your own predictions below.
            

Smashwords Signs Distribution Agreement with Scribd

Smashwords today announced a distribution agreement with Scribd, which operates one of the world’s largest publishing platforms and online reading communities.  Scribd receives over 80 million monthly readers to their platform according to their website.

There are two distribution components to the Smashwords agreement with Scribd.  1.  Smashwords will supply books to Scribd’s new ebook subscription service, where for $8.99 per month subscribers can enjoy unlimited reading.  2.  Smashwords ebooks will also be available for individual sale to Scribd customers under our standard retailer terms.

Ever since Scribd launched in 2007, I’ve admired their publishing platform, their social reading technology and their commitment to content creators.  Scribd has built a massive audience of millions of readers, and these readers are now accessible to the 70,000+ authors and publishers that distribute with Smashwords.

Scribd’s roots are in community publishing. They’ve been a pioneer in user generated content, and in making it possible for content creators to share their works with the world.  Their platform makes it easy for people around the world to upload documents, presentations and books, and they’ve always done a great job of making the content discoverable, readable and sharable.

Back in October, I wrote a two-part blog post in which I named Scribd as one of the leading examples of the new breed of ebook subscription services that aim to do for ebooks what Netflix did for filmed entertainment and what Spotify did for streamed music.

Over the last year, they’ve developed a compelling subscription ebook service.  For a low monthly subscription of only $8.99, readers can enjoy a massive catalog of ebooks, and a frictionless reading environment where book price is not a deciding factor.  Readers can enjoy unlimited reading on-demand.

Visit the Scribd home page and it’s immediately apparent they’re positioning their entire business around ebooks.  They're working to convert their 80 milllion monthly visitors to subscribers for your benefit.

Scribd is going to provide an incredible level of support to Smashwords authors, and I trust every Smashwords author will want to be involved and support their efforts.

Scribd reaches a global audience, serving readers in over 100 countries.

The terms we negotiated with Scribd are author friendly, generous, and closely aligned with our standard retail distribution terms.  But as you’ll see, they’ve thrown in some compelling twists as well. 

For Scribd’s retail store, the terms are identical to our standard retail agreements.  Smashwords authors and publishers will set the price, there will be no discounting, and authors will earn 60% of the list price on all sales.  The first 10% of the book, from the cover image forward, will be the free preview sample, similar to most retailers.

For Scribd’s subscription ebook service, authors will earn 60% of the list price on all qualifying reads, and here they’ve added a cool twist.  With subscription services, the author or publisher earns credit for a full read when the reader reaches a certain trigger point, measured by the percentage of the book that is read.  The first 10% of the book is a free sample, similar to a retailer.  Excluding the sample, once the reader reads an additional 20% of the book, a full sale is triggered and the Smashwords author earns 60% of the list price, up to a maximum of about $12.50 per read.  In practice, what this means for most fiction writers is that after the reader reads more than the first 30% of your book, it triggers a full sale.  For some non-fiction writers, where your book’s content is more likely to be read non-sequentially, it means if the reader starts their reading deeper in the book at Chapter 10, a sale could be triggered after reading only 20% of the book (As an aside, this underscores the importance of authors building fully functional navigation into their ebooks so that all their book's content is easily discoverable.  To learn how to upgrade your ebook's navigation, check out my recent blog post and video, How to Add Navigation to a Smashwords Ebook).

Unlike any other subscription service or retailer, Scribd has sweetened the pot by added a secondary sales trigger for the author by providing credit for partial reads.  If the subscriber reads 5% more than the first free 10% but less than the additional 20% necessary to generate a full sale, this triggers a credit for partial read.  For every ten partial reads, which Scribd calls a “browse,” the author earns credit for a full sale.  Since most people read fiction from page one forward, this means if 10 people read just over the first 15% of your book but less than 30%, it’ll generate a full sale.  For non-fiction, where readers are more likely to read non-sequentially, they can read 5% of the middle of the book and trigger a browse credit.

December 21 Update on Piracy Prevention:  By distributing your book to Scribd via Smashwords, you'll also help prevent and remove unauthorized versions of your work at Scribd.  To protect the intellectual property of authors and publishers, Scribd has developed and is continuing to enhance a Copyright Management System (CMS) that takes a digital fingerprint of all authorized uploads from Smashwords, and will use the Smashwords version as the authorized version of record.  So not only will the Scribd CMS help protect Smashwords authors against unauthorized uploads in the future, it will also trigger retroactive and automated takedowns of unauthorized versions.  If you ever discover an unauthorized version of your work at Scribd, visit the the Scribd DMCA takedown page and provide them a direct hyperlink to the offender's upload.

Smashwords and Scribd have begun integrating our respective distribution systems and conducting test shipments.  If all goes as well as we expect, Smashwords books will start appearing during the month of January.

To qualify for Scribd distribution via Smashwords, the book must be Premium Catalog approved.

In addition to the sales opportunity represented by their subscription service and ebook store, Scribd has outlined some exciting plans to take their support of Smashwords authors and publishers to the next level. 

Here's a hint of some of what you’ll see from Scribd in the months ahead: 

• As part of this relationship, they plan create ongoing merchandising features dedicated to indie authors, showcasing and celebrating the amazing talent of the indie author community.  Smashwords will share our bestseller lists with Scribd, drawing upon our knowledge of your sales through the Smashwords distribution network (yet another reason to maintain full distribution with Smashwords!).
• For a limited time, they’re planning to offer Smashwords authors who distribute to Scribd via Smashwords a free one-year subscription to the service so you can try it out.  Multiplied by 70,000 Smashwords authors, this is a $100 per author bonus, and an overall potential commitment valued at over $7 million.  Cool beans!  To qualify, make sure your books are opted in to Scribd by January 1.  The Scribd distribution channel will appear in your Smashwords Dashboard's Channel Manager later today.
• They’re planning to develop author profile pages that Smashwords authors can access and manage.
• They’re planning to create analytic tools in which they aim to give authors unprecedented data about how readers are engaging with their books.  I’ll share more about that in the months ahead as their plans unfold.   

Please join me in welcoming Scribd as the latest member of the Smashwords distribution network.  I’m looking forward to working with Scribd to grow our authors’ audience and sales in the months and years ahead.  I'll send out an author/publisher alert about the deal later today.

Check out the Scribd blog which quotes Smashwords author Quinn Loftis.

“I’m thrilled to learn about the partnership between Smashwords and Scribd,” said Quinn Loftis, a USA Today bestselling Smashwords author of nine young adult paranormal romance titles, including the seven-book Grey Wolves series. “I look forward to distributing all my titles to Scribd via Smashwords because I appreciate the opportunity to reach more readers.  My fans will appreciate the incredible value represented by Scribd’s subscription service.”

View Scribd's press release here:  http://www.scribd.com/doc/192561226/Scribd-Partners-with-Smashwords

Smashwords Unveils Major Website Redesign

Smashwords today unveiled our first major website redesign since our launch in 2008.

We made hundreds of changes large and small.  We also made technical changes behind the scenes that will lay the groundwork for us to introduce many new tools and features for authors and readers alike in 2014. 

Among the highlights of the redesign:

• The Smashwords home page – We doubled the number of books listed on the Smashwords home page from ten to 20, added 27 new book category filters to increase discoverability, added live stats for the number of books published and the number of free books, and organized the navigation elements around logical categories.
  
• Responsive design – We adopted what’s called a “responsive design,” which among web designer circles refers to a design approach that optimizes the user’s experience across different browsers, devices and screen sizes.  View the site on your desktop computer and then resize your browser to see how every page’s content resizes and reorients as you make the width narrower or wider.
  
• Dramatically enhanced mobile support – Our previous mobile version of the site was, to put it kindly, limited.  The new mobile experience – whether you’re accessing the site from a smart phone or tablet – is darn near beautiful.  Our improved mobile support is enabled by our responsive design.  It preserves user access to nearly all the same features you’d expect from a large browser on a desktop computer, making it easy for mobile users to browse and discover books without pining for a larger screen.
  
• Redesigned book pages – The new book pages make it faster and easier for readers to discover, sample and purchase books.  The download links have been moved to the top section of the page to minimize scrolling.  New slider bars display book covers of other books in the same series, other books by the author, and other books by the publisher.
  
• Updated Dashboard – The Dashboard features that once occupied the vertical left navigation column have now been moved into grids at the top of the page, organized under categorizes of Sales Reporting, Metadata Management and Marketing & Distribution Tools.
  
• Updated Account Page – The Account tab has been reorganized around logical categories to give you quicker access to the controls you want.  The categories include About Me, Buying Books, Selling Books, Payments for Authors and Publishers, and Account Status.
  
• Updated Library – We actually rolled this out a couple weeks ago but didn’t announce it.  The library is now faster, prettier and provides better support for power-users with hundreds of books.

Despite all the changes, we took special care to maintain the utility and familiarity of all the main features that our million+ monthly visitors have come to expect. 
 

Did I write “million+”?  Yes.  The Smashwords site receives millions of visits and over 10 million page views each month. 

Do you know writers who haven’t yet published at Smashwords?  If so, please let them know what they’re missing.

Special thanks to Case Talbot (the fine woman who also created Smashwords Interviews) on our engineering team who led this effort, as well as our design consultants Jami and Bryan at 2Wongs Studios, and Smashwords authors, customers and team members who contributed to this redesign.

Our work is not finished.  We view today’s refresh as the first of many iterative steps that will make it easier for our authors to publish, distribute and manage their books, and make it easier for readers to discover and enjoy them.  We look forward to your comments, suggestions and bug reports.

Four Smashwords Fantasy Authors Featured in iBooks Promotion

Apple iBooks in Australia and New Zealand today launched a top-of-the-store promotion featuring ten emerging fantasy authors.

Four of the featured authors are Smashwords authors.  Congrats to James Maxwell, T.C. Southwell, Dionne Lister and Joseph Lallo! The other six featured authors are from traditional publishers.

Although we're only a few hours into the promotion, featured titles from James Maxwell, Joseph Lallo and TC Southwell already occupy three of the top four most downloaded free books in the sci-fi & fantasy category at iBooks Australia.  Thank you Apple!

The promotion will run for approximately two weeks.  Australian and New Zealand iBooks users will see the promotion at the top of the iBooks app.  The promotion can also be viewed in iTunes at http://bit.ly/1e62TFa

How to Add Navigation to a Smashwords Ebook

Does your Smashwords ebook contain navigation?  Are you taking full advantage of navigation?

This afternoon I produced and uploaded a new Smashwords tutorial video that shows you how to add navigation to your Smashwords ebook.

Use the video as a companion resource to Step 20 of the Smashwords Style Guide, where we have additional tips on how to add navigation to your ebook. [Two updates:  1.  Box Sets:  Added a new section for Box Set authors.  2.  For Mac Users:  Added a special bookmarking and ToC hyperlinking instructionsat the end of this post]

One of the advantages of ebooks over print books is that ebooks can contain navigation.  Hyperlinks within your book can link to chapters, Parts, or special sections.  These links make your book more accessible to readers.

You can also use links to draw your reader's attention to important end matter (a.k.a. back matter) sections of the book that help you sell more books.

Few authors take full advantage of their end matter.  Some authors will simply end their book with the words, "The End" and then leave the reader hanging at the very moment the reader wants more.  Give them more!

Here are a few examples of the end matter sections you can create, and then link to from your linked ToC:

1.   About the author - place a short bio here so readers can learn more about you.

2.   Other books by this author - The reader just finished your book and is craving more from you.  Tell them about your other books.  If you have a book on preorder, let them know the preorder is available at select retailers (Smashwords distributes preorders to Apple, Barnes & Noble and Kobo).

3.  Connect with the Author - The reader loved your book, they think you're the bees knees, and they want to connect with you.  Add your coordinates for Facebook, Twitter, your blog, your website, your Smashwords Interview, your Smashwords author page, or your mailing list. Once a reader connects with you via social media, they can start to get to know you and appreciate your super-awesomeness on an entirely new level.  It's an opportunity for you to start a long term relationship building process that can help casual readers become fans, and help fans grow to become super fans. 

4.  Sample chapters of other books - Give them a taste of your other books!

5.  Reading group guide - Create a special section for reading groups with suggested questions that would spark thought-provoking discussion and debate.  This is an opportunity to turn one reader into many, because it'll encourage reading group members to propose your book as the group's next read.

Your book might already have one or more of these sections.  If you don't have them all, consider upgrading your book with these new end matter sections, and with a linked ToC to tie them altogether. The video, and the recently updated Style Guide, will give you ideas to take your book to the next level.

Special thanks to Smashwords bestseller Samantha Towle.  Samantha gave me permission to use her new contemporary romance, Trouble, in the creation of this video.  I used her book as an example of how to add useful navigation in Microsoft Word.  

Navigation Tips for Box Sets and Multi-author Collaborations

More than just about any book, box sets really need a robust NCX, which is the book's external Table of Contents you see whenever you click the Table of Contents option on your ereader device.  The secret to creating a great NCX is to start with a logical Linked Table of Contents.  As we mention in Step 20 of the Style Guide (the section that explains how to add navigation) and video above, when you create a linked Table of Contents, Meatgrinder will use your linked ToC to guide the creation of the NCX.  This gives you great control.

Let's assume you're formatting a five-book multi-author box set of travel memoirs titled World Travelers.  Here are the items you might place in your Linked Table of Contents:

Table of Contents

About World Travellers
Book One - Jane's Memoir by Jane Austin Smith
 About Jane Austin Smith
Book Two - Joe's Fantastic Adventures by Joe Williams
 About Joe Williams
Book Three - Hitchhiking through Africa by Celena Scott
 About Celena Scott
Book Four - Exotic Restaurants of Instanbul by Freddie Mackin
 About Freddie Mackin
Book Five - Hiking the Appalachian Trail by Jodie Anderson
 About Jodie Anderson

Each of the items above would be hyperlinked, with the hyperlinks pointing to the bookmarks corresponding to the start of each section.  In the example above, we'd identified the start of each key section.  If you want to go further, you could even link to the primary subsections within each book, though be careful not to go overboard because too much navigation can become overwhelming to the reader. See the YouTube video on Smashwords navigation to see the navigation creation process in action.  Once you see how to do it, it's easy and the final result will give your readers a great navigation experience.

How to get multiple authors in the metadata:  Smashwords can connect multiple authors to your box set.  Simply gather the hyperlinks for each participating author's author profile page at Smashwords and send the request with the hyperlinks to the Smashwords support team.  You'll find the link to the support team at the bottom of any Smashwords website page, or by clicking the question "?" mark at the top of any page.

Special Navigation Instructions for Mac Word users:  

 The Smashwords Style Guide, and the video tutorial above, show how to create navigation using the PC versions of Microsoft Word.  If you use a Mac, the same principles of navigation as explained above, and in the Style Guide and video, also apply to Mac Word users.  However, the menus within Word for Mac are different.  The image below shows the location of the options that allow bookmarking and hyperlinking.  Click the image to expand.

Smashwords Integrates with Dropbox for Faster eBook Delivery to Tablets and Smart Phones

Smashwords today added a Send to Dropbox feature that instantly transfers a purchased ebook to a customer’s Dropbox account.

Dropbox acts like a virtual hard drive for many tablets and smart phones, making it faster and easier for readers to load Smashwords ebooks onto their favorite tablet or mobile smart phone.  No cables necessary!

Devices that support Dropbox include the iPhone, iPad, iPod Touch, Android tablets and smart phones, Google Nexus tablets, Nook tablets (Nook HD/HD+, Nook Color, Nook Tablet), Kindle tablets (Kindle Fire, Kindle Fire HD), and many others.

The new Dropbox feature is easy to set up.  Here’s how:

1.  From your Smashwords Account tab, click Manage eDelivery.  You’ll see the link button.  Click it.

2.  On the next screen, sign in to your Dropbox account.  If you don’t have an account, click the “create an account” link to create one.  It’s free.

 
3. Finish linking your Dropbox account with Smashwords by allowing us to create a Smashwords folder in your Dropbox account.  Click "Allow" when asked.

4. If you haven’t done so already, download the free Dropbox app to your e-reading device.  Apple, Nook and Kindle devices have their own app store where you'll find the app.  If you use an Android device other than Kindle or Nook, you can download the Dropbox app in the Google Play store. 

5.  Also make sure you’ve downloaded an e-reading app to your device.  For Apple devices, iBooks is great.  You can also use Bluefire.  For Android devices, Aldiko is great.  Kindle and Nook tablets don’t require an e-reading app.

6.  Each time you purchase an ebook at Smashwords, we’ll automatically transfer up to three file formats – epub, mobi and PDF – to your Dropbox account.  File format availability is determined by the author or publisher.  You’ll find your files in Dropbox’s “Apps/Smashwords” folder.

7.  You can transfer previously purchased books to Dropbox by clicking the Send to Dropbox button in your Smashwords Library.

Learn more about the new Smashwords eDelivery feature at https://www.smashwords.com/edelivery/info or click the Manager eDelivery link under your Account tab. 

Below is a tutorial video.

Enjoy!

Bowker Ranks Smashwords the #1 Producer of Indie Ebooks in 2012 in New Report

Bowker has ranked Smashwords the largest US producer of indie ebooks in 2012 according to their new annual Self Publishing Report for 2012.

Smashwords was also ranked as the second largest producer of self-published books after CreateSpace when counting the combined production of both print books and ebooks (Smashwords doesn't do print).

Bowker, the ISBN registrar here in the US, bases their data on ISBN registrations.  Although their data set doesn't include non-ISBN'd books, it represents the industry's most comprehensive measure of the rise of self-publishing and the rise of ebooks. 92% of Smashwords ebooks carry an ISBN.

According to Bowker's analysis of U.S. ISBN data, the number of self-published titles in 2012 jumped to more than 391,000, up 59 percent over 2011 and 422 percent over 2007.

Bowker says ebooks continued to gain on print, comprising 40 percent of the ISBNs that were self-published in 2012, up from just 11 percent in 2007.

Although I'm pleased to see Smashwords come in at number one, I'm even more excited about what Bowker's overall data says about the rise of self-publishing.  Indie authors are taking publishing matters into their own hands.

The three most essential requirements of professional publishing - the printing press, the access to retail distribution, and how-to knowledge of professional publishing best practices - are now freely available to all indie authors.  Smashwords is committed to providing writers these tools.

Any writer, anywhere in the world, now has the freedom to publish without a publisher, and can do so at little to no cost.  As indie ebook authors, these writers can enjoy faster time to market, greater creative control, closer relationships with readers, greater price-competitiveness, better marketing and promotion tools, and royalty rates four to five times higher than they'd get from traditional publishers. 

The day will come when more writers aspire to indie publish rather than traditionally publish.  Is the industry ready?

Congrats to every Smashwords author and publisher.  You're changing the world of publishing one indie ebook at a time.

Download the Bowker report for free at their SelfPublishedAuthor blog.

Examining the Business Model of Ebook Subscription Services (Part I)

This is the first installment of a two-part series in which I explore the business models and potential impact of ebook subscription services.

In recent months, we’ve witnessed the launch of two high-profile ebook subscription services – Oyster and Scribd.  Both aim to do for ebooks what Spotify did for music and what Netflix did for film and television entertainment.

They’ll provide readers access to an all-your-eyeballs-can-eat smorgasbord cornucopia of thousands of ebooks for a subscription fee ranging from only $8.99 per month (Scribd) to $9.95 per month (Oyster).

When talk of ebook subscription services surfaced in months past, there was much hand-wringing in the publishing community that such services would devalue books and harm publishers and authors. 

Yet as the launches of Oyster and Scribd indicate, some (but not all) of those skeptics were silenced once they learned the publisher-friendly nature of the compensation models.  Several small publishers and one Big 5 publisher – HarperCollins – signed on to work with both Scribd and Oyster.  Smashwords announced an agreement with Oyster last month. We're now in the process of shipping over 200,000 ebooks to them as I write.

I’m a fan of both services because I think if they succeed, they’ll make reading more affordable, more accessible and more convenient for a segment of the reading public.  I think they’ll expand the overall market for books.

In public, Scribd and Oyster have been conspicuously cagey about the nitty gritty details of how they compensate publishers.

Trip Adler, CEO of Scribd, provided Jeremy Greenfield of Digital Book World clues to their model when he commented, “When somebody reads a book, we pay a publisher as if they sold the book. We have a fairly complicated system to determine if a consumer actually has read the book. The amount the publisher gets is based on the digital list price.”

Separately, Adler told Laura Hazard Owen of Paid Content that Scribd plans to be more public about the terms in the future.  Paid Content also reported that HarperCollins CEO Brian Murray told Publishers Lunch, “We have negotiated very hard, to the point where if the whole business went this way, we and our authors would be very pleased, because the economics are more favorable…[it's] the exact opposite of the music industry’s subscriptions models. The revenues that go to our authors is up, somewhat significantly.” 

To my knowledge, no other Big 5 publishers have signed on, at least not yet.

The ebook subscription services face an interesting business challenge.  For any new ebook purveyor to succeed, it must satisfy three primary stakeholders:  1. Customers (readers).  2. Suppliers of the product they sell (authors and publishers).   3. Itself (it must earn a profit so it can keep the lights on and reinvest in its business).

If the subscription services sign up millions of people who never read, they’ll earn high profits but will disappoint publishers.  Disappointed publishers will bail and subscribers will cancel.  If the subscription services sign up too many power-readers, they’ll go out of business, thereby denying readers and publishers the benefit of their service.

If the services can strike the right Goldilocks balance of serving readers, publishers and their own business interests, they have the opportunity to build the next generation of successful ebook purveyors.

The services should be especially appealing to power readers, who can now read an unlimited number of books for only $9.95 per month.  Can these subscription services turn a profit in the face of these book gluttons?

The answer, I think, is yes.

Just as an all-you-can-eat buffet will lose money on the gluttons, so too will the ebook subscription services lose money on some subscribers.  But just like the eateries, the ebook subscription services are betting that that the vast majority of users will consume in moderation over time.

Perhaps an even more apt parallel would be how health clubs sell memberships.  They know that many subscribers rarely take full advantage of their services.  A health club membership, like an ebook service subscription, is often an aspirational purchase for subscribers.  As long as the reader wants to increase their reading in the future, they’re likely to maintain their subscription, even if they don’t actually read more.

Would the success of subscription services harm ebook retailers?  Not necessarily.  Book gluttons are likely to consume more books with subscription services than they could otherwise afford to buy, so their increased reading doesn’t necessary represent a lost sale to retailers.  Subscribers to ebook subscription services – the gluttons included – will still continue purchasing books at retailers because retailer catalogs offer greater selection.  Apple carries over two million books, whereas until recently Oyster carried only 100,000 books.  Four of the big five NY publishers aren’t distributing books to Oyster and Scribd yet, which means readers who want their books must purchase them at a retailer.  Even HarperCollins, which was the first big five publisher to dance with Oyster and Scribd, isn’t supplying its entire catalog of books to the subscription services.

Indie authors may hold the key to the success or failure of the new subscription services. 

At a time when the large NY publishers are over-pricing most of their ebooks, the average price of the books from Smashwords authors is about $3.15, and the median price is $2.99.  This means subscribers can enjoy more indie reading at less cost to the subscription service.  Smashwords will also supply over 20,000 books carrying a retail price of FREE to Oyster, which means Oyster subscribers can enjoy these titles with gluttonous abandon at no cost to Oyster.

This concludes part one of this two-part series.  Click here to read part II, where I examine how ebook subscription services will redefine the value of the book.

How Ebook Subscription Services May Redefine the Value of Books (Part II)

In part one of this two-part series, I examined business models of the all-you-read ebook subscription services.  Here in part two, I’ll examine how ebook subscription services may redefine the value of books.  The answer isn’t quite as obvious as we might think.

Way back in 2009, one of my first posts for Huffington Post was titled, “Why we Need $4.00 Books.”

In that post, I argued that publishers had an opportunity to utilize the then nascent ebook format to expand their global readership by offering low-cost ebooks.  I thought the lower price point would appeal  to a new group of readers in the same way that the introduction of the mass market paperback format increased readership over the previous hardcover format.  I believed low-cost ebooks were inevitable, and if publishers failed to provide them, someone else would.

In the four years since, that someone else was the indie (self-published) author.  Publishers have resisted dramatic price drops for fear of cannibalizing existing print and ebook sales.  Partially thanks to low prices, but also because of increased quality and professionalism, indie authors are now capturing an ever-increasing percentage of the ebook market, and an ever-increasing percentage of slots in all bestseller lists.

Enter ebook subscriptions such as Oyster and Scribd, where consumers pay under $10.00 per month to read an unlimited number of books.

What happens now to our notion of the value of the book?  If publishers were terrified four years ago by the prospect of low-cost ebooks, and terrified the same year when Amazon priced their ebooks below cost at $9.99, should they be terrified now of ebook subscription services?
No.  If publishers refuse to support these new subscription models, they'll continue to lose marketshare to those who do.

Of the big five New York Publishers, only HarperCollins has embraced the subscription services, yet it isn’t supplying its entire catalog.  Meanwhile, a large number of large independent publishers such as Sourcebooks and Workman have entered into agreements.  Smashwords announced an agreement with Oyster last month.  As I mentioned in part one of this two-part series, Smashwords today is midway through the process of shipping over 200,000 ebooks to Oyster, including over 20,000 books priced at FREE.

If these new subscription services are successful at attracting millions of readers, and if they can build viable, profitable businesses, what would that mean for the value of books?  The answer is more complex than we might at first think.

A fascinating characteristic of these services is that once a subscriber is enrolled, the service provides a virtually frictionless ebook consumption experience.  See a book you want to read?  Start reading now with a click, without the hassle of clicking a buy button, or entering your credit card information, or taking a financial risk on an unknown author or an unknown book.  Click and read, and if you don’t like the book, the reader has no worries and no buyer’s remorse.  They’ll just click to the next, all without concern of their end-of-month credit card bill.

Subscription services make books feel essentially free to their subscribers.  This means consumer purchase behavior will be liberated from the cognitive calculus every consumer performs at conventional retailers when they weigh their desire for a prospective purchase against the list price of that book.  As we found in the last two years in our annual Smashwords survey, and as conforms to general economic theory, lower cost goods generally get consumed more.  The human species and psyche evolved to binge in times of plenty and conserve in times of scarcity.

In the 2013 Smashwords survey, we found that free ebooks at Apple get 91 times more downloads than books carrying a price.  Across all the retailers in our study, we found that $2.99 and $3.99 ebooks were purchased, on average, about four times more frequently than ebooks priced $7.99 and up.

What happens when every book feels free from the consumer’s perspective?

When this dynamic plays out, I think the publishing industry will gain fascinating insight into what readers really want to read in the frictionless environment of zero-cost book shopping.

Will some Smashwords books already priced at FREE become more popular than their $12.99 competitors from the big publishers?  In some cases, it'll happen.

Friction-free subscription ebooks will alter the competitive fight for reader eyeballs.  The reader won’t know the difference between a free book and a $12.99 book.  Since the retail price is almost irrelevant to the reader, the authors and publishers listed in these subscription services can’t compete on price.  Instead, it’ll be more about the book.

I think the six most dominant consumption drivers will be as follows:

1. Word of mouth – Are my peers and friends recommending the book to me?  Does it have super-fabulous “WOW” reviews from other readers?
   
2. Cover image – The cover image is the first impression a book makes on a prospective reader.  Does it capture the reader’s eye and make them want to click and read?
   
3. Book title and description – Does the title and description amplify the desirability established by the cover?  Do they promise the reader the experience they seek?
   
4. Author brand – Much to the chagrin of publishers, the publisher’s brand on a book’s spine has never meant much to readers.  The author brand is what drives readers more than anything.  If the reader trusts the author to give them a great read, then that author will get more readers. Author brand will probably give big publishers some early advantage in the ebook reading game with subscription services because publishers still control the biggest name authors, and because indies aren’t able to underprice in the subscription sandbox.  This edge will erode over time as indie authors continue building massive fan bases with low prices at conventional retailers, and as more big name authors migrate to indie publishing (if ebook subscription services become a large an important channel for reaching readers, and big publishers refuse to make their books available to these services, it will accelerate the defection of big name authors to self publishing).
   
5. Subscription service merchandising – The subscription services, like ebook retailers, operate reading platforms that house a massive collections of books.  Like ebook retailers, the subscription services will merchandise and promote certain books above others to their subscribers.  They’ll seek to recommend books that will please their subscribers.  A great recommendation will make the subscriber happy, increase subscriber loyalty, decrease subscriber churn, and make the subscriber more likely to heed future recommendations from the service.  A poor recommendation will have the opposite effect – loss of trust and loss of subscribers.  This means subscription services will be incentivized to recommend high-quality books.  This means high-quality, low-cost ebooks from indie authors are likely to have a merchandising advantage over traditionally published books of equal quality but higher cost (once we complete our initial deliveries to Oyster, we’ll supply them a ranked list of Smashwords bestsellers to assist their merchandising).
   
6. Author marketing – Indie authors are building captive fanbases on Facebook, Twitter, blogs and on their private mailing lists.  Authors have the power to direct their fans to stores.  Will authors promote these subscription services with the same – or more – gusto than they promote their conventional ebook retailer outlets?  Authors who distribute to the subscription services, at least initially, will face less competition for readers because they’re competing against a few hundred thousand books, rather than millions of books at the major retailers.

Now back to my original question.  How will ebook subscription services redefine the value of books?  The answer isn't cut and dry.  If readers enjoy consuming books as a utility service, and these new subscription services take off, then readers will no longer think of books as having prices in the same way they once did.  Reading will become an on-demand experience.  Readers will feel closer and more connected to books.  If reader engagement with books increases, book access will become more valuable to readers.

If these services are successful, the dollars will flow to authors and publishers that maximize access and availability. I suspect that authors and publishers that make their books available to the subscription services will also experience greater sales through conventional retail channels, and if that happens the dollars spent on books will increase further, causing books to become more valuable, and more rewarding to the authors and publishers who produce them.

Indie authors are best positioned to thrive in this new world of ebook retailing where readers demand high-quality, low cost, high-availability books.

Apple iBooks Promotes GJ Walker-Smith's Saving Wishes as Book of the Week

Congratulations to Smashwords author G.J. Walker-Smith.

Apple today named G.J.'s free series starter, Saving Wishes, their Book of the Week in the US and Canada iBooks stores.  The title is receiving prominent front-page promotion on iBooks for the next seven days.

[Update November 1: Apple iBooks Australia and New Zealand have now also named Saving Wishes their Book of the Week.  Promotion running through Thursday, November 7!!]

The timing is great for G.J. because the third title in her series, Storm Shells, has been on preorder at Apple for over two months and is set for a release of November 11.  Based on its accumulated orders prior to today, it already had a high probability of hitting #1 at several of Apple's iBooks stores around the world when it goes onsale.  This week's Book of the Week promotion will only help because she still has another couple weeks to accumulate more orders.

G.J. provides Smashwords authors a great mini-case study on how to leverage the iBooks store to reach thousands of readers.  iBooks is now the world's second largest global ebook retailer, and it offers a wealth of merchandising opportunities for savvy authors.

Preorder Storm Shells at iBooks

How does an author get selected for such merchandising love?  It's not easy, but as I describe in my new iBooks Merchandising workshop viewable now at YouTube, there are a number of things Smashwords authors can do to maximize their odds.

The merchandising team at Apple has over 2 million books to choose from when selecting their Book of the Week, which means the odds of any one title receiving such merchandising love is extremely rare.  With only 52 weeks in the year and so many books to select from, the odds of any one title being selected is about 1 in 50,000.  Yet multiple Smashwords authors have already been selected.

How'd they do it?

One of the great things about Apple's selection process is that it's merit-based.  The titles they select have earned it, often by implementing many of the best practices I so often encourage our authors to adopt (click here for my video workshop on best practices).  In G.J.'s case, she made a number of smart moves, each of which contributed to her selection for this promotion.

At the risk of oversimplifying (and yes, this is an oversimplification!), here's are five things she did right:

• 1.  List *all* your books on Apple - This is a no-brainer and should go without saying, yet many authors don't yet have their books at Apple.  If your titles are locked up elsewhere, such as in KDP Select's exclusive program, you're missing out on the world's second largest ebook selling platform.  Millions of customers only shop at Apple iBooks.  It's important to have your entire list at Apple.  If you have an incomplete collection of books at Apple, they're less likely to promote your books.  Smashwords makes it fast, free and easy to get your books listed at all 51 of Apple's iBooks stores.  G.J. has all her titles at Apple distributed via Smashwords.
• 2.   Write a super-awesome book that delivers extreme satisfaction to readers - G.J.'s books get "WOW" reviews at Apple.  Apple's customers love her.  If you earn the attention of Apple's customers, you'll maximize your odds of gaining the attention of Apple's merchandising team.
• 3.  Great covers - G.J. has beautiful, professional-looking covers.  There's a consistent design theme across the covers, which helps unify the series.  Your cover is the first impression you make on a reader.  A poor cover chases readers away.  A great cover invites them in.
• 4.  Leverage FREE - Saving Wishes is a free, full-length series starter clocking in at over 100,000 words.  It's only been published since May, but because it's FREE it helped her build a massive following with Apple customers worldwide in a short period of time.  When you price at free, you eliminate the financial risk readers must take when they purchase a book from an unknown author.  In other words, you eliminate a key friction point that might prevent a reader from giving you a chance.  By giving the reader a full-length series starter, G.J. has over 100,000 words through which to earn the reader's trust.  By the end of the book, G.J. has earned the reader's trust with her writing.  The reader is emotionally invested in the characters and story, and they're more likely to purchase the next books in the series.  And that's what's happening.
• 5.  Leverage preorders - G.J. followed the recommended best practices for doing a successful preorder with her forthcoming book 3, Storm Shells.  When Smashwords launched our new preorder distribution feature a few months ago, I encouraged authors to allow at least 1-2 months preorder runway.  She gave the preorder ample runway - in this case over two months -  to accumulate orders.  With a free series starter driving sales of book 2, she had both book 1 and book 2 working for her this entire time to drive orders to Storm Shells' preorder.  A preorder allows the author to capture the reader's order at the moment they have the reader's attention and interest - right when they finish another book of yours and want to read more!  Thanks to the high number of accumulated orders for Storm Shells, it gives Apple increased confidence that their customers are excited about her books, and therefore gives Apple greater confidence to promote the book and the author to a broader audience.  Preorders give retailers yet another reason to promote your book.

These five items above can't entirely capture the multi-faceted factors that drive the selection process at Apple.  View my Apple merchandising workshop for more tips.

Most authors will never receive this kind of merchandising love, though I can tell you that the mere process of working to earn and deserve such merchandising promotion will help your book become more successful. If you implement best practices, and take full advantage of the talent and tools you have at your disposal, you will reach more readers, even without the boost of merchandising love.

I've written before about my concept of Viral Catalysts.  A Viral Catalyst is anything that makes your book more available, more discoverable, more desirable and more enjoyable to readers.  Viral Catalysts drive word of mouth.  Key to the Viral Catalyst concept is that there's no single magic bullet that helps an author become a bestseller.  A successful author must do many things right, while avoiding mistakes that can undermine success.

If you'd like to learn more about G.J. Walker Smith, check out her Smashwords Interview.