Smashwords Takes eBooks Mobile
Memo to book publishers: Beware of the rejected novelist!
That may prove to be the moral of the story of Smashwords, a digital self-publishing platform started by entrepreneur Mark Coker after a carefully-researched novel he'd co-authored with his wife Lesleyann about the dark side of the L.A. soap opera scene (called Boob Tube) failed to find a conventional publisher.
In an almost perfect tale of writer's revenge, Coker created his company "to take on the industry that had rejected me." This isn't the first time he's taken on a self-appointed David vs. Goliath role -- in 1999, he launched BestCalls.com, to help small investors gain access to the earnings conference calls of publicly traded companies.
BestCalls emerged as a champion for fair disclosure, and was a catalyst for the SEC's ground breaking Regulation FD. The startup was acquired by Shareholder.com in 2002, and is now owned and operated by Nasdaq.
That experience taught Coker that "the little guy, leveraging the Internet, can make a difference." Enter Smashwords. Launched in private beta a year ago next month, and public beta last May, the company offers an entirely free, transparent service by which in a matter of minutes you can publish your own eBook at any length and at whatever price you wish.
It works like this: Upload your writing as a Microsoft Word Doc, vet it against the Smashwords style guide, and then -- presto! -- your eBook springs to life in all nine of the current formats that support eBooks, including Stanza, the open source reader that allows your book to be read on an iPod or iPhone.
"We're in the embryonic stages of what's going to happen here," Coker allows. "Independent authors will change the way books are published. The entire book publishing industry is built on the backs of under-compensated writers. The cost structure is way out of line, resulting in a product that is too expensive for the vast majority of the world's literate population."
Most of the hundreds of authors currently on Smashwords offer their books for between $1 and $5 in the online catalogue that allows prospective buyers to sample much of each book for free before deciding whether to purchase it. Eighty-five percent of the sales proceeds goes to the author; fifteen percent to Smashwords. All titles are DRM-free.
When you compare these terms to the standard five-ten percent royalty authors make on a conventional book(*), you don't have to be a math major to see that this is potentially a far more favorable financial deal for authors than that offered by conventional book publishers.
The hitch, of course, is that nobody's buying eBooks yet -- even including industry leader Amazon's Kindle, digital versions accounted for only about one half of one percent of all books sold in 2008. But if Coker and other small publishers have their way, that will be changing soon, "just like what happened to the music industry."
Meanwhile, whatever became of that unpublished novel that set Coker off on this quest in the first place? Well, you can now read Boob Tube in its entirety at Smashwords -- of course.
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(*) Note: Mark Coker sent me the following email message elaborating on this royalty breakdown, and I've corrected a factual error in the original text as a result:
"Actually, I think industry standard is around 5% for a mass market paperback, probably 6-10% for a trade paperback, and maybe 10-15% for a hardcover depending on sales. Those are before the agent takes their cut. The royalties above are on gross MSRP of the book, whereas Smashwords is 85% of the net, where net = (price-paypal fee). I'm not saying our approach is better, because people actually understand gross and net can be misunderstood unless the publisher is totally transparent (as we are).
"So to be apples to apples about it, the author of a $7.00 mass market paperback with 5% royalty (and I'm sure bestsellers can negotiate higher) would get $.35 minus 5 cents to the agent, or 30 cents net to author. For the same book on Smashwords, the Author would get $5.52 (79% gross), Smashwords gets $0.97 (14% gross) and Paypal gets $0.50. When an author goes to price their book, we break all this down in a handy real-time pie chart."