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.

Smashwords Ebook Publishing Workshops on Youtube

I've posted a series of five ebook publishing workshops at Youtube.  Each is embedded below.

Whether you're considering publishing an ebook for the first time, or you're already an ebook publishing veteran, I hope you enjoy these workshops and learn new ideas that will help you publish with greater ease, confidence and success.

In total, they run eight hours.  It's like an all-day digital publishing seminar you can attend at your leisure.  Although the videos can be watched (or listened to) in any order, if you're new to ebook publishing, then start with #1 since it explains foundational information that will make the other videos more useful to you.

The ebook publishing workshop series includes:

#1 - An Introduction to Ebook Publishing (a primer and e-publishing checklist)
#2 - The Secrets to Ebook Publishing Success (best practices secrets for reaching more readers)
#3 - Smashwords Survey Helps Authors Sell More Books (pricing strategy and fun metrics)
#4 - 10 Trends Driving the Future of Authorship (indie authors are the future of publishing!)
#5 - How to Reach More Readers at Apple iBooks (merchandising secrets to grow sales!)
#6 - How to Add Navigation to Smashwords Ebooks (create a linked Table of Contents and NCX)


I've embedded each of them below.  If you enjoy them, please feel free to share them with a friend or embed them and repost them on your blog or website.

#1 - An Introduction to Ebook Publishing (a primer and e-publishing checklist)



#2 - The Secrets to Ebook Publishing Success (best practices secrets for reaching more readers)



#3 - Smashwords Survey Helps Authors Sell More Books (pricing strategy and fun metrics)



#4 - 10 Trends Driving the Future of Authorship (indie authors are the future of publishing!)



#5 - How to Reach More Readers at Apple iBooks (merchandising secrets to grow sales!)
This is a video recording of an online workshop event sponsored by ALLi, the Alliance of Indepedent Authors.  Thanks to Orna Ross of ALLi for recording and sharing this video!




 #6:   How to Add Navigation to a Smashwords Ebook (build a lined Table of Contents and NCX)




We'll develop more videos for the Smashwords Youtube page in the future, including shorter videos.  If there's a tutorial you'd like to see us create, post your wishlist below!

New Smashwords Series Manager Improves Book Discovery

Smashwords today released a powerful new tool called Series Manager that makes series books more discoverable.

Series Manager allows series writers to attach their books to series, and manage multiple aspects of their series metadata.

The new feature is available now in the Smashwords Dashboard under the Series Manager link.

Once authors organize their series titles within Series Manager, readers can easily identify books within a series, or across related series.  Just as importantly, series metadata will give our retailers greater flexibility to promote books within a series.  Let's say, for example, a retailer wants to do a merchandising promotion of the top 50 bestselling Smashwords series that have a free series starter.  Without the series metadata, it would be nearly impossible for Smashwords or our retailer to accurately identify which books are in a series, and in which order.

It's not uncommon for the books in some series to make no reference to their series in the book title, book cover or book description. This makes it difficult for readers to identify all the books in a series, or books in related series, and makes it difficult for retailers to properly merchandise them.  Series Manager helps solve this problem.

With Series Manager, authors can easily attach books - including preorder books - to a series using point and click check boxes. Simply click to your Dashboard, click Series Manager, click Create New Series, then attach the books.  Authors can select from multiple series numbering methodologies such as Book 1, Book 2; or Book I, Book II; or Part 1, Part 2; or no. 1, no. 2; or you can dispense with series number and simply give the series name, such as "Fellowship of the Rings."

Series books can be members of multiple series, all
controlled within Smashwords Series Manager

Authors can even connect books that span more than one series.  For example, the Smashwords Style Guide is a member of two series, Smashwords Guides and Smashwords Style Guide Translations.

If you've written series with spinoff series, this is a powerful feature that will make it easier for fans to identify books within a series, and discover new books in your related series.

You can also identify the ideal sequence of books within a series.  For example, if the Star Wars movie series was a book, you might want to designate that the Prequel to episodes 1, 2 and 3 should be enjoyed after the first three in the series.


Smashwords will provide the new series metadata, as input by the author or publisher, to our retailers.  Each retailer will handle the metadata differently.  Some will make use of all the data, and others might cherry pick.  Either way, the improved metadata will make it easier for retailers to enhance the discoverability of Smashwords books today while having the capability to develop improved discoverability features in the future.

The series metadata will also increase the discoverability of series titles in the Smashwords store. Within each book's listing, whether it's on the book's book page or in the search results, we'll display the series to which the book is connected.

If the book is attached to more than one series, then the other series will appear as well.   In the example at left which shows the book page, the Smashwords Style Guide is a member of two series.

Series names are clickable.  Readers can click the series title and view a dedicated series page, such as my page for the Smashwords Guides.  Incorporate the link into your marketing.  If you're doing a marketing campaign around a single series, provide fans a direct to your series page.

We look forward to your feedback as we enhance this feature.

Smashwords Signs Distribution Agreement with Oyster

Smashwords today announced a distribution agreement with Oyster, a new and innovative ebook subscription service.  Oyster offers consumers unlimited access to more than 100,000 ebooks for $9.95 per month.

I’ve been following the ebook subscription space for some time.  As an ebook distributor, our job is to search out the most compelling opportunities to help our authors connect with reader eyeballs.  Oyster is one such opportunity. 

The closest analog to Oyster in the music business is Spotify, and in the video rental business it’s our Los Gatos neighbor NetFlix.  The closest, most familiar analog to Oyster on the ebook market today is Amazon’s Kindle Owners Lending Library, where subscribers to Amazon’s Prime service who own a Kindle can download and read one ebook for free per month.  The author or publisher, who must enroll their book in Amazon’s KDP Select program to benefit from KOLL, earns about $2.00 for each download.

I expect Smashwords titles to begin shipping to Oyster in about three weeks.  At least 72 hours before we begin shipping to Oyster, I’ll send out an email alert to all Smashwords authors and publishers.  The email will contain complete financial details, including royalty rates and sampling thresholds, so you can make an informed decision about your participation.  It’s an author friendly deal so I expect you’ll be pleased.

Oyster offers an all-you-can-read
e-reading buffet, complemented
by an elegantly designed e-reading
app with social reading features.

Unlike KDP Select, Oyster does not require exclusivity.  It’s open to all Smashwords authors. A single Oyster user could conceivably read multiple books by the same Smashwords author in a single month, and the author will be paid for each book.  Smashwords authors will earn their royalty whenever an Oyster subscriber reads more than a sample of their book.
 
Oyster’s subscription service will help our authors connect with a segment of the reading audience they’re not reaching anywhere else.  Oyster will also give authors yet another reason to steer clear of exclusivity and embrace full distribution with Smashwords.

Oyster formally launched today with its iPhone app, which users can download from Apple’s App Store.  From what I’ve seen of it, the app is elegantly designed.  It incorporates social reading features that allow readers to follow and friend fellow readers and see what their friends are reading or have read.  The app will be available on other platforms in the future.

Oyster has impressive backers drawn from Silicon Valley and New York.  Back in October, they announced $3 million in funding led by Peter Thiel’s Founders Fund.  The round also included Shari Redstone’s Advancit Capital, Chris Dixon and Sam Altman.

Smashwords authors don’t need to do anything to enjoy Oyster distribution other than ensure their books are Premium Catalog-approved.  If you’re not yet publishing and distributing with Smashwords, click here to get started today.

Learn More:  Check out my two-part series where I examine the business models and potential impact of the ebook subscription services:

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

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

Smashwords Publishes 250,000th Book

An indie author today released the 250,000th book on Smashwords.

In the last 30 days, over 9,000 books were released at Smashwords.  In 2008, we released 140 books in the first year.

The 250,000 books comprise 8.5 billion words.  Imagine the millions of hours of love that went into these books.  Imagine the cultural treasures that are now available and discoverable to future generations.

Five years ago when we launched Smashwords, self-publishing was viewed as the option of last resort for writers. Today, it's becoming the option of first choice.  The stigma of self-publishing is melting away as the stigma of traditional publishing increases.

Indie authors are becoming professional publishers.

Writers have learned that with ebook self-publishing, they can enjoy faster time-to-market, greater creative control and 4-5 times higher royalty percentages.  The higher royalty rate enables indie authors to price lower while still earning more per ebook sold.  This gives indies a significant competitive advantage over traditionally published authors.  When readers are given the choice between two books of equal quality, and one is $3.99 and the other is $12.99, the $3.99 title is more desirable.  The $3.99 indie earns about $2.50 for every book sold, whereas the $12.99 author earns $1.60 to $2.25. 

Based on our survey data, a $3.99 ebook will sell over four times as many copies as a book priced over $10.00.  This pricing power gives indies a tremendous platform-building advantage.  Authors who reach the most readers today will have the largest fan bases ten years from now.

The advantages indie authors enjoy in the marketplace are real, and these advantages will increase in the years ahead as reader eyeballs transition from paper to screens, and as brick and mortar bookstores continue their steady decline.

I wonder if the traditional publishing industry has yet come to terms with the ramifications of the rise of indie authorship. 

Indie authorship isn't a noun.  It's an attitude. A mindset.  It's about believing in yourself.  It's a movement. It's a movement that believes every writer has a right to publish. It's a movement that understands that every writer - regardless of commercial potential or metrics - has something special to share with the world.  It's a movement that celebrates the value of the book above the value of a dollar.  Every writer is important.  Indie authorship leaves no writer behind.

Five years and 250,000 books in, I still feel like we're just getting started at Smashwords.  Wait until we reach 500,000 books, or one million.  Our amazing authors have barely scratched the surface of what's possible. Watch, you'll see.

Smashwords Distributes Ebooks to Flipkart.com, India's Largest Online Bookseller

India, here we come!

Smashwords today announced a distribution agreement with Flipkart.com, India’s largest online marketplace and bookseller.  Smashwords titles will begin appearing at Flipkart.com within the next three to four weeks.

Flipkart is commonly referred to as the Amazon of India.  To be fair to Flipkart, Amazon would probably kill to become the Flipkart of India some day.

Flipkart.com is India’s largest online marketplace.  They serve 10 million registered users, one million daily visitors, and offer products in over 17 different categories.  Our friends at Flipkart tell me that according to Nielsen BookScan Retail Panel data, Flipkart holds 80% market share for online book sales in India, and holds 40-45% market share for all trade book sales across brick and mortar AND online.

Flipkart’s ebook store is accessible via the Web at www.flipkart.com as well as via Flipkart e-reading apps for Android, Apple iOS and Microsoft Windows 8 devices.  The Apple iOS app supports reading only, whereas the other interfaces support both purchasing and reading.

I’ve been eager to distribute Smashwords books to India for several years now.  India represents the fifth largest source of traffic to the Smashwords store after the US, UK, Canada and Australia.

In our globally connected world, consumer cultures are becoming more similar than they are different. Online social media marketing touches readers at every point of globe, generating demand for your books. We're now better equipped to serve Indian readers, who can purchase at Flipkart in Rupees.

Two years ago I sat beside a young Certified Public Accountant on a flight from London to San Francisco.  If she hadn’t volunteered she lived in India, I would have bet she lived in San Francisco.  She told me how she and her friends in India only speak English at work, they dream in English at night, and they only buy books in English.  If you haven't thought about the book market in India, now is the time to start.

Here are some quick facts about the Indian market:

• India is the world’s second most populous country with 1.2 billion citizens, accounting for 17% of the world’s population.  Source. 
• India’s literacy rate is 74% and rising.  Source.
• India has two official languages: Hindi and English.  Source.
• 125 million Indians speak English, twice the 61 million English speakers in the UK, quadruple the 33 million in Canada, and about six times the 22 million in Australia.  Source.   I don’t have data on English literacy, or the number of English readers, though our friends at Flipkart tell me about 80% of their book sales are English language books.
• 150 million Indians are online.  Source.  By 2015, according to McKinsey, the number of Internet users is expected to double to 330 million.  Source.
• India recently became the world’s third largest market for smartphones.  Its smart phone market for Q1 2013 grew over 160% year over year, a rate of growth faster than China (86% YoY), Japan (24% YoY) and the US (19% YoY).  Source. Smartphones are e-reading devices!
• India has one of the world’s fastest growing economies, and one of the fastest growing middle classes.  India had 250 million middle class consumers in 2007, a number that will rise to 600 million by 2030.  Source.  With the rise of the middle class comes increased discretionary consumer spending on books. 

The ebook market today in India is nascent, accounting for less than one percent of the market.  I expect the market to grow dramatically over the next five years as the primordial soup necessary to support a thriving ebook ecosystem comes into place. 

The ingredients for that soup?  Here are they are:

1. Availability of low-cost high-quality e-reading devices – Smartphones!
2. Availability of a large, diverse and affordable selection of high-quality ebooks – Smashwords ebooks!
3. Prominent retailers to promote and sell the books – Flipkart, Amazon and others to follow
4. Internet penetration – Huge already, growing fast
5. Consumers inclined to purchase online – Only about 1% of Indians shop online now.  It’s not difficult to imagine how this will grow in the next few years.

I think indie authors will have a substantial competitive advantage in India, because indie ebooks are priced much more affordably than traditionally published ebooks.  Our 20,000+ free books make our authors' offering all the more compelling.

India has a rich and proud literary culture.  I think our agreement with Flipkart will help inspire the next generation of Indian authors to embrace ebook publishing. Thanks to the example set by the 60,000+ Smashwords authors we’ll distribute to Flipkart, I trust Indian authors will come to learn how Smashwords makes ebook publishing fast, free and accessible to all.  We’ll not only make it easy for Indian authors to reach Indian readers at Flipkart.com, but we’ll also help them reach millions of other readers across our global distribution network of Apple, Barnes & Noble, Kobo, Sony, the Smashwords store and others. 

How many months or years before an aspiring Indian author who learns of Smashwords through this relationship goes on to become a NY Times bestselling author?  I’m betting it’ll happen within a year or two.  I can’t wait!  There are talented writers in every corner of the globe just waiting to be discovered by readers.

How to distribute books to Flipkart:

As with most new Smashwords channels, Smashwords authors and publishers will be automatically opted in to Flipkart distribution.  As long as your book is Premium Catalog-approved, you’re eligible for distribution.

We’re sending out an email today to all Smashwords authors and publishers today regarding this announcement.  If you want to opt out of Flipkart distribution (I don’t recommend opting out!), you can do so within the next 48 hrs by visiting your Dashboard’s Channel Manager.  As most Smashwords veterans know, it’s our standard process to give all authors at least 48 hours advance notice via email before activating a new distribution channel.

You can view one of our early test books in their store, The Secrets to Ebook Publishing Success.

We plan to ship to titles and metadata updates to Flipkart daily, five days per week, which is the same schedule we use for Apple, Barnes & Noble and Kobo.

Smashwords authors will earn 60% of the list price for all Flipkart sales, after deducting for India’s equivalent of VAT tax, which in India is called Withholding Tax.  This is similar to how we compute author earnings after VAT for Apple sales in the UK and Europe.

Agency pricing is not allowed in India, so we have entered into a wholesale pricing agreement.  Although Flipkart.com has the option to discount our books in India, it’s up to them whether they exercise this option.  Amazon’s KDP platform operates under similar rules.  When you sign up with Amazon KDP, Amazon retains the option to discount your books.  In practice, Amazon rarely discounts with the exception of price matching.  Flipkart.com, like Amazon, practices price matching against Indian ebook stores only.  If they see a Smashwords ebook is priced for less at the Amazon Kindle store in India, they will match the price and the author’s cut will drop to 60% of the discounted price, less of course the taxes mentioned above.  However, in situations where Flipkart.com discounts the price outside of price-matching situations, the author will still earn 60% of the list price from Smashwords.  Flipkart will carry our free ebooks in addition to our priced books.

If you're not already publishing and distributing with Smashwords, click here to learn how.  We make ebook publishing fast, free and easy.

Apple iBooks Refreshes Breakout Books Feature, Smashwords Authors Hitting Bestseller Lists

Today is a banner day for Smashwords authors at Apple.

Apple's US store today launched a refreshed and updated Breakout Books feature showcasing multiple Smashwords authors.

It's their top-of-the-store home page promo.  If you have an iPhone or iPad, you'll see it in your iBooks app.  If you have iTunes installed on your computer, you can view the promotion at its perma-link at http://iTunes.com/BreakoutBooks

This time around, Apple is featuring multiple preorders in the Breakout Books promotion.  As I mentioned in our ebook preorder announcement and last week in my ebook preorder primer at the Huffington Post, one of the many benefits of preorders is that retailers can identify strong titles and give them extra merchandising love!

Here's a sampling of Smashwords authors featured today in Breakout Books:  

Under the Romance category, there's GJ Walker Smith, Kirsty Moseley, Abbi Glines, Katie Ashley, Chanda Hahn, Kelly Mooney, Erica Stevens, Quinn Loftis, Shayne Parkinson, Samantha Young, Marquita Valentine, Lisa Plumely, Kahlen Aymes, Shelly Crane, S.C. Stephens and Merry Farmer.

Under Mysteries & Thrillers, there's Claude Bouchard, JD Nixon, Paul Pilkington, E.L. Henry, Maggie Shayne, G.P. Ching, Mike Wells, Claude Bouchard again (yay!), Edie Claire, Dana Donovan, Harrison Drake, John O'Brien, L.L. Bartlett and George Wier.

Under Sci-fi and Fantasy, there's Dionne Lister, Caroline Hansen, Hadleigh O. Charles, Joseph Lallo, Valmore Daniels, TC Southwell, Brian S. Pratt, Jeffrey Poole, Claire Farrell, Lindsay Buroker, Sarah Woodbury, TC Southwell (again, yay!), Joseph Lallo (again, yay!), Randolph Lalonde, Penelope Fletcher, and T.M. Nielsen.

Under the catch-all of "More to Explore," there's Linda Gillard (twice!), Mike Wells (second appearance), William Wayne Dicksion, Shayne Parkinson (second appearance!), Kaitlyn Davis, Sarah Burleton, Kim Richardson, and Alison Pensy.

Apple first launched the Breakout Books feature in Australia and New Zealand, and then in February Apple launched Breakout Books in the US.

It's an ongoing feature at multiple iBooks territories around the world. For example, the iBooks store in Australia is running a Breakout Books promotion this week featuring titles priced at FREE (promo graphic at left).

Featured Smashwords authors include Jacques Antoine, Tina Chan, Raquel Lyon, Bobby Adair, Emma Grace, Belinda Crawford, Cherise Kelley, K.Z. Freeman, J.D. Brink, Rebecca Ethington, Josephine Kent, Maggie Shayne, Connie Keenan, Amelia Rose, Josephenie Kent (second appearance!), Jim Davis, Mary Tribbey, M.D. Bowden, Electra Rossello, Kimberly Wells, Kitty Margo, Lleaon Rao, Kevin Provance, Dillie Dorian, Janice Gallen, Jessica Carter, Aaron Lee, Missy Lyons, Wolf Black, Witold Matulewicz, Amanda Martin, Jamie Buchanan, Cathleen Conley, Lee Penney, Nathan Bassett, Diane Dunning, Dean Schechinger, Terry Renner, Julie Richie, Lauren Scharhag, Michael Rogers, Dr. A. Nyland, Laine Crosby, Hercules Bantas, Bart Cline, Valerie Holmes, Electra Rossello, Marius Renos Dicomites, Bobby A. Troutt, Matthew Christopher Benner, Ali Simon, TJ Seitz, Shelton Ranasinghe, Rachel Higginson, James Hampton and C. Sean McGee.  Whew.  Wow.

In other great Apple news today, Chanda Hahn, who I predicted last week in my eBook Preorders Help Indie Authors Hit Bestseller Lists story at Huffington Post would hit Apple's bestseller lists, today landed high in multiple bestseller lists with her new title, Fable: An Unfortunate Fairy Tale.  As of this morning, she was the #2 bestseller at Apple's US store, #2 in Australia, #4 in Canada and #45 in the UK.

The love Apple and its customers are showering on indie authors doesn't stop there.  In the US store today, Smashwords authors are holding three of the top five bestseller spots (Congrats Chanda Hahn, Justine Elvira and Melody Grace!).  In the UK store, Smashwords authors are holding five of the top 10 spots (congrats Justine Elvira, Melody Grace, Samantha Young and JD Nixon!). In Australia, Smashwords authors are holding five of the top 10 bestseller spots (congrats Chanda Hahn, Justine Elvira, Melody Grace and Samantha Young).

Smashwords authors are featured in multiple other promotions today and nearly every week around the world at Apple.  For example, at Apple Australia and New Zealand this week, Smashwords authors G.J. Walker-Smith and Dionne Lister earned their own top-of-page merchandising features with custom artwork produced by Apple based on each author's covers.  So cool.

All I can say is that Apple is super-awesome.  If your book is at Apple, return the favor by linking to it on your blog, your website and in your social media links.  It makes a big difference for your sales.  Be sure to join their recently-improved affiliate program where you can earn and extra 7% of the list price on your own book, simply by linking to it.  Click here to learn the latest details on Apple's affiliate program and apply for an account.  They've expanded their worldwide coverage of the program.  For linking tips to Apple, see my previous post about Apple ebook merchandising, How to Sell eBooks at the Apple iBookstore.  I'll be doing an updated post sometime soon about Apple merchandising, based on a presentation I first gave at RT Booklovers in Kansas City.

If you're friends with any of these authors above, let 'em know today's a good day!

Smashwords Interviews Helps Readers Learn the Story Behind the Author

Smashwords today introduced Smashwords Interviews, a new author marketing tool that helps readers learn the story behind the author.

Smashwords Interviews guides authors to create, edit and publish their own Q&A interview.  Authors simply answer a series of questions, or create their own questions, and then click publish.

Your interview will be published on the Smashwords site, and is cross linked and discoverable from your author profile page, each of your book pages, and the Smashwords home page.  At the end of each interview is a clickable listing of the author's books.  The interview includes social sharing features so your fans can help spread your interview on their favorite social media channels.  

The idea for this feature came to me last year when we were running a series of author interviews here on the Smashwords blog.  Many more authors wanted to be interviewed than we could accommodate.  I thought to myself, "wouldn't it be cool if we could interview every Smashwords author?"  And then the solution became apparent: a self-serve system for publishing author interviews. Smashwords Interviews is the result.  Kudos to Case Talbot, the newest member of our software development team.  She took my ideas and realized them better than I imagined.

To test the feature, we invited a few Smashwords authors and team members to give it a spin.  Here are their interviews:

• Aaron Fernandez
• Chelsea Campbell
• JD Nixon
• Kevin Shlosberg
• Mark Coker
• Marquita Valentine
• Rebecca Forster
• Shayne McClendon

I look forward to reading the amazing stories behind our authors.  I think you will too.


How to Publish a Smashwords Interview

Creating an interview is fun and easy.   Here's how to get started:

1. Sign in to your account, click to the Account tab, and then you'll see the link for Create or edit your interview. Study the instructions for tips, and then jump in by clicking Proceed to Your Interview! at the bottom of the page.
2. We'll present you with a series of questions to get your creative juices flowing.  Feel free to edit our questions, or create your own.  Make your interview unique!  Show off your personality and your writing.
3. Click Save and Show Next Question to answer the next question
   
4. When you’re done, click Preview and Publish. From this page, you can use the up/down arrow to rearrange the order of the questions.  You can also click to edit any question or answer.
5. Promote your interview! Share it on social media, and encourage your fans to share it too.

The same picture you use for your author profile will appear on your Smashwords Interview page.


Tips to Create a Great Interview

At Smashwords, we believe every author has an important story to tell. Your writing is influenced by your life experiences, talents, dreams and passions. 

Smashwords Interviews helps readers learn the story
behind the author.  Simply answer our questions,or
create your own questions.  Then publish and share!

Your opportunity with this interview is to bring who you are as an author to life.  It's an opportunity to share the story behind the author, and the story behind your books.  It's an opportunity to convert prospective readers into readers, and turn fans into super-fans.

A good interview helps the reader develop a multidimensional understanding of who you are as a writer and a person.

The secret to creating a great Smashwords Interview is to select questions that prompt honest answers that address what readers would want to know about you (even if they don’t yet know they want to know it). Above all, be yourself!  Allow your personality and your writing talent to shine!

Before you begin your interview, put yourself in your target readers’ shoes. The readers of your interview will fall into one of four camps:

1. They’re already a fan of your writing, and they’re curious to learn more about you as person. Your interview can help them appreciate you and your work on a completely new level, and will help solidify your brand in their mind.
    
2. A fan of yours, or possibly even a complete stranger, enjoyed your interview and shared it with their social media friends on Facebook, Twitter, or on their blog.  Be sure to promote your interview to your fans, and encourage them to share it with their friends!
3. You’re a new author to them, they’ve never read you. They’re looking for a good read and they’re curious to learn more about you before they take a chance on your book.
4. They stumbled across your Q&A by accident, possibly via a search engine like Google because your interview addresses a topic that matches the keywords they were searching on.  They didn't know they were looking for your book, but after reading your interview, they might think differently!

Although we created Smashwords Interviews with authors in mind, readers are also welcome to contribute interviews!

We look forward to hearing your feedback and suggestions for improvements.

Enjoy!

Update September 10, 2013 - Smashwords Interviews now supports Publisher and Agent accounts!  This means publishers and agents can compose interviews for each of their authors or pen names.

Smashwords Authors Top Charts at Apple with Preorders

A couple weeks ago, we announced preorder distribution to Apple, Barnes & Noble and Kobo.  Today, we see a first-hand example of how preorders can help increase visibility and sales for authors.

Three Smashwords preorders went onsale today at Apple and other retailers.  They're topping the charts.  At Apple, accumulated preorders credit as sales on the day of release, which can cause titles to spike in the bestseller lists.  The higher ranking in the bestseller lists increases visibility which can then lead to greater sales.

As of this writing, JD Nixon's new mystery, Heller's Decision, is at #1 store-wide at the Apple iBooks store in Australia, #1 in Canada, #4 in the US, and #11 in the U.K.

Kristen Ashley's new romance, Rock Chick Revolution, landed today at #3 store-wide in Australia, #2 in Canada, #5  in the US, #20 in the UK

Elizabeth Reyes' new romance, Abel, landed today at #7 store-wide in Australia, and #46 in the UK.  In the US, she's charting at #35 in the always-competitive romance category.

Keep an eye on some of these other hot new releases coming out in the weeks ahead, each of which are likely to be chart-toppers as well:

Chanda Hahn's  Fable: An Unfortunate Fairy Tale Book 3 (onsale 8/27)
J. S. Scott's  The Billionaire’s Salvation (The Billionaire’s Obsession ~ Max)  (onsale 9/8)
Quinn Loftis'  Sacrifice of Love: Book 7 of the Grey Wolves Series (onsale 9/13)

Learn more about preorders here at the Smashwords Blog.

Smashwords Commences Daily Shipments to Barnes & Noble

Starting this past Monday, Barnes & Noble became the third major Smashwords retailer to begin accepting daily deliveries of books and metadata updates from Smashwords, five days a week. Previously, Smashwords shipped to B&N twice-weekly.

For Smashwords authors and publishers, and for B&N customers, this means faster listings of new releases, faster listings of preorders, and faster price updates. We also ship daily to Apple and Kobo.

My thanks to our friends at B&N for taking on the extra work to process our daily deliveries.


Smashwords has a long history with Barnes & Noble.  Barnes & Noble was the first retailer to sign a distribution agreement with us back in 2009, and they've been a strong supporter of Smashwords authors and publishers ever since.  B&N earns our authors millions of dollars each year, and is our second-largest sales channel after Apple. If all your books aren't at B&N, you're missing out on millions of readers you can't reach anywhere else.

As we announced July 26, Smashwords now delivers preorders to Barnes & Noble, a powerful new author merchandising tool.  Preorders aren't available to authors who upload direct to B&N via NookPress (f.k.a. Pubit).  Smashwords also delivers books priced at FREE to B&N, and we pay 60% list for books priced under $2.99 and over $9.99 (vs. 40% list earned by NookPress users). 

If you're not yet distributing your titles to B&N, Apple and Kobo via Smashwords, consider consolidating your distribution and metadata management through Smashwords!