Smashing

Michael Jensen | 12/04/2009

A recent announcement by Smashwords (www.smashwords.com) of a sales partnering arrangement with Amazon (and B&N, and Sony, and Shortcovers) raises a number of key questions.

Smashwords is a self-publishing and small-publisher-assistance site that uses “affiliate” promotion, and distributes and sells only ebooks. It’s a hands-off intermediary, a “non-publisher publisher,” that presumes authorial promotion and engagement—Smashwords just provides a platform for distribution and sales, somewhat like other “new intermediaries” (like Scribd and others).

For trade publishers, the following explanation from the founder should be food for thought:

—extract—
“Smashwords pays authors [or publishers] up to 85% of the net proceeds from the sale of their works. Net proceeds to author = (sales price minus PayPal payment processing fees)*.85. Authors receive 70.5% for affiliate sales. Our generous royalties mean if an author has a book they might otherwise publish via a traditional commercial publishers as a $8.00 mass market paperback with a 40 cent royalty, they could publish the same book at Smashwords as an ebook and earn $6.45, or 16 times more.  Or, they could price their ebook on Smashwords for $4.00 and make nearly 8 times the per unit amount of selling a traditionally published print book. The economics are equally advantageous for publishers.”
—/extract—

Further:

—extract—
“It’s free to publish on Smashwords. There are no hidden fees. We earn our revenue by taking a cut of all net sales on the site. The cut is 15% of the net for sales at Smashwords.com or on Stanza, 15% of the net proceeds from our retail partners, and 18.5% for sales that were originated by affiliate marketers.  If your book is purchased via one of the major online retailers we distribute to, you can expect your royalty to be approximately 42 percent (or higher) of the suggested list price you determine.”
—/extract—

Currently, then, as a publisher, you could use Smashwords as a distributor to Amazon, Shortcovers, B&N, and others, for very little besides a bit of up-front investment in .epub format. Smashwords eschews Digital Rights Management, though the “partners” could add a DRM envelope.

Thus, by using Smashwords to export and distribute e-versions of your publications, you could point directly to Smashwords from your own website, and get a higher rate of return per sale than via Amazon.

And while that’s great (and worth exploring further), Smashwords also is an indicator of a new pressure in the publishing ecosystem: the non-publisher publisher.

As Mark Coker, Smashwords founder, writes elsewhere:

—extract—
“Any self-published author or small publisher, anywhere in the world, now has the opportunity to instantly publish their book at Smashwords and reach a worldwide audience, and all at no cost.

“In the next few years as ebooks rise to account for an ever-increasing percentage of all book sales, more and more authors—including big name authors—will starting asking themselves, ‘What can a publisher do for me that I can’t do for myself?’”
—extract—

What a publisher can “do” is selective acquisition, promotion/marketing, quality assurance, and much more, of course. But especially with the organizational “partnerships” being made between digital players, and the substantially higher royalties paid directly to authors, for trade publishing in particular, Smashwords represents a new kind of competitor, appealing directly to authors (meanwhile Amazon is promoting a similar author-publishes service as well).

Should we be taking advantage of this opportunity, by using these “non-publisher publishers” as e-book resellers—or should we do our best to delegitimize this threat by treating it as “self-publishing,” and avoid conferring status to them by listing “real” publishers’ work on them?

Your answer to that question will vary depending on how you publish, what you publish, and what your publishing mission is—but regardless, “non-publisher publishers” are venues to watch.

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