Smashwords Previews Breakthrough Ebook Publishing Platform Where Authors Control the Pricing, Sampling and Marketing of Their Works

Authors Earn 85% Net Royalties on Sales

Los Gatos, Calif. – February 11, 2008 – Smashwords, a new digital publishing startup, today previewed a breakthrough ebook publishing platform for authors at the O’Reilly Tools of Change publishing conference in New York City. In a first for the publishing industry, Smashwords gives authors unprecedented control over how their ebooks are published, sampled, priced and sold.

Smashwords, which kicked off an invitation-only private beta today (prospective beta testers can apply at http://www.smashwords.com ), allows any author to publish a multi-format, DRM-free ebook or screenplay in minutes. Authors simply upload the word processing file of their work to the site; assign sampling rights to make up to 99% of the book available as a free sample; and then assign pricing (including the “Radiohead” honor system option where authors let customers decide what to pay). Smashwords automatically converts the book into multiple DRM-free ebook formats, making the book available for download or online reading. Authors retain full ownership over their works and earn 85% net earnings-share rates on sales. Traditional print authors, by comparison, typically earn royalties of only five to ten percent.

The idea for Smashwords grew out of founder Mark Coker’s frustrations as an aspiring novelist. In 2002, Coker and his wife, Lesleyann, co-authored a roman a clef novel entitled Boob Tube that explore the behind-the-scenes world of daytime television soap operas (Lesleyann is a former reporter for Soap Opera Weekly Magazine). Despite two years of representation from one of New York City’s most respected literary agencies, they were unable to land them a book deal. Some publishers said they rejected the manuscript because they questioned whether soap opera fans buy books.

“Every year, millions of authors are silenced by the publishing industry because it is physically unable to publish all authors,” says Coker. “How many Ernest Hemmingways, William Shakespeares, Jane Austins or JK Rowlings have we lost?”

Coker concluded that in today's digital age, there's no reason why authors shouldn't be able to publish anything they want - readers should determine what's worth reading, not just publishers. He also determined that ebooks were the solution to enable universal publishing for all authors. Thus Smashwords was born.

Coker envisioned Smashwords as an online publishing platform that would allow any author to publish their book for free, in minutes. As he began architecting Smashwords in 2005, an upstart video web site called YouTube launched. YouTube was based on the simple premise that any amateur video producer should be allowed to air their video and build an audience. The success of YouTube encouraged Coker to continue down his path with electronic books.

Smashwords serves as a digital publishing platform through which any author can showcase and sample their talents to a worldwide audience. Readers in many cases can sample over 50% of the book for free before they decide to buy the book. This “try before you buy” strategy has proven successful in the music industry with sites like MySpace, yet the traditional publishing industry seldom offers more than a few pages of online sample.

“The traditional book publishing industry is broken from the perspective of authors, readers and publishers,” Coker says. “Most authors are never published. Authors lucky enough to land a book deal rarely sell enough books to earn any royalties beyond their initial $5,000 to $10,000 advance. Publishers lose money on nearly 80% of the books they publish because of the high costs of production, warehousing, distribution and marketing. Further dampening profitability for authors and publishers is the fact that bookstores often return up to 50% of their unsold inventory for a full refund.”

“I think ebooks will become increasingly important to the worldwide book publishing industry,” continued Coker. “By digitizing a book, authors and publishers can immortalize their works, making them permanently discoverable to new audiences. For authors and publishers of out of print books, ebooks offer a great way to bring these works back to life.”

According to a survey published in May 2007 by the American Association of Publishers, ebooks are the fastest growing category of books in an otherwise moribund book publishing industry, clocking an average five year annualized sales growth rate of 65% vs. the overall industry average growth of 2.4 %. However, ebooks represent only two tenths of one percent of the overall US book market. Despite the rapid growth of ebooks, they have not yet achieved their full potential. Several factors have conspired to dampen the acceptance of ebooks:

  1. Many publishers insist on crippling their ebooks with burdensome digital rights management (DRM) schemes in a misguided attempt to reduce piracy. Consumers, however, resent being treated like criminals. They want the freedom to do as they wish with a DRMed ebook – for example, they may want to read the book on the multiple devices, or print the book at their home computer.
  2. Most ebooks are overpriced. Consumers understand that ebooks cost publishers a fraction of what it costs to print and ship a print book, so they expect digital books to be priced differently than print books (with Smashwords, an author can sell an ebook for $3.95 and still make a higher earning on that book than if they had sold a traditionally published print book for $25.00). Publishers have insisted on high prices because they fear ebook sales will cannibalize print sales. While industry experts debate the veracity of this fear, with Smashwords, authors and publishers can earn higher margins at lower costs to consumers.
  3. Digital books aren’t paper. Although digital books hold great promise, it’s tough to match the readability, portability and simplicity of a paper book. Yet over the last few years, significant advances in digital ink and LCD computer displays have begun to narrow the gap. At the current rate of technology advance, it’s not unreasonable to expect that digital screen technology will soon approximate or supercede print on paper. The latest generation of ebook reading devices, such as the Amazon Kindle, the Irex Iliad and the Sony Reader, for example, deliver a satisfying reading experience for most people. Nevertheless, it’s not necessary for digital books to supplant paper books. The two represent complementary and different means of consumption.

 

What Smashwords Offers for Authors, Readers and Publishers:

* Publish your written works in minutes

* Automatic conversion of your book into multiple ebook formats

* 85% net earnings share on all electronic sales

* Generous non-exclusive publishing contract: you always own and control your book

* You determine pricing

* Powerful free marketing tools, including:

o Author determines percentage of book available for free sample

o Free author home page with personalized web address

o Embed YouTube videos of book trailers, book readings and interviews

o Online sales and fulfillment

o Digital works repository – you own it, you control it

* Communicate directly with your audience

* Lifetime archive of your works

Readers:

* Discover, sample and collect DRM-free, multi-format ebooks from independent authors

* Create a personalized library of your favorite works

* “Favorite” your favorite authors

* Post video reviews and written reviews of the books you read

* Free personal home page with personal web address

* Become a published author, free

Publishers:

* Publish ebooks for all your front list, midlist and backlist authors

* All the same benefits afforded to independent Smashwords authors

 

 

Background on Smashwords Founder, Mark Coker

Mark Coker is an entrepreneur, author and angel investor based in Los Gatos, California. He has a track record of leveraging the power of the Internet to bring positive social change.

His previous startup, BestCalls.com, which he launched in 1999, set out to level the playing field for small stock market investors who at the time were denied access to the earnings conference calls of publicly traded companies. At BestCalls, he championed fair disclosure and argued small investors deserved to receive market-moving information at the same time as big Wall Street investors. His work served as a catalyst for the SEC’s ground breaking Regulation FD, which mandated a level playing field for all investors. BestCalls was acquired in 2002 by Shareholder.com and is now owned and operated by the Nasdaq Stock Exchange. See this link to Wikipedia for more background on his work at BestCalls.

In 2002, he and his wife, Lesleyann, began writing Boob Tube, a novel that explores the behind-the-scenes world of daytime television soap operas. Boob Tube is published on Smashwords.

In addition to his work with Smashwords, Mark serves on the advisory board for, and is an investor in, Flatworld Knowledge, a provider of open source textbooks.

Since 1993, Mark has owned Dovetail Public Relations, an award-winning Silicon Valley PR firm. Mark looks forward to translating his marketing knowledge into the book marketing tools offered at Smashwords.

About Smashwords, Inc.

Founded in 2007, privately held Smashwords operates an online self-publishing platform for authors of ebooks and screenplays. Smashwords allows anyone to become a published author in minutes. The free service puts authors in full control over the marketing, pricing, sampling and licensing of their works. In addition to receiving exposure to hundreds of thousands of potential readers, authors receive 85% net earnings share on sales of their works. For traditional publishers of print books, Smashwords offers a compelling distribution channel through which they can digitize their entire portfolio of frontlist, midlist, backlist and out-of-print books. For readers, Smashwords offers the opportunity to discover exciting new voices in fiction and non-fiction. Smashwords, Inc. is based in Los Gatos, California, and can be reached on the web at http://www.smashwords.com.

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