Presented at the Writing for Change conference in San Francisco, November 13, 2010. This presentation explores how the book publishing industry - which has changed little over the last 50 years - has pursued business practices detrimental to the future of the book. The presentation concludes that in order to save the book and preserve its value to mankind, books and the publishing industry must change by proactively embracing technology rather than becoming victimized by it. Presented by Mark Coker, founder of Smashwords.

1. The Indie Ebook
Revolution
Writing for Change
San Francisco
November 13, 2010
Mark Coker
Founder, Smashwords

2. My Background

3. About me
• Founder of Smashwords
• Free ebook publishing and distribution
platform for indie authors
• We distribute ebooks to multiple major
retailers (Apple, Sony, B&N, Kobo, etc.)
• Author of…

4. How Smashwords Works
• UPLOAD
• Author/publisher uploads a Microsoft Word file, formatted
to our Style Guide
• CONVERT
• We automatically convert to 9 ebook formats
• PUBLISH
• Ready for immediate sale online
• DISTRIBUTE
• Distribute to major retailers
• GET PAID
• Authors/publishers receive 85% of net

5. Indie ebooks published at
Smashwords
140
6,000
24,000
0
5000
10000
15000
20000
25000
2008 2009 2010 (Nov)

6. A REVOLUTION IS UPON US

7. CHANGE IS AFOOT
ooh,
pretty!

8. BOOKS ARE ENDANGERED

9. WE MUST SAVE BOOKS

10. Books are Precious
• Long form content essential for
• deep dive knowledge immersion
• entertainment
• Books are vessels for cultural
preservation
• Noah’s ark
• Promotes cross-cultural understanding

11. TECHNOLOGY IS COLLIDING WITH
PUBLISHING

12. Technology Represents the Means by
Which Consumer Desires are Realized
Things Touched by Technology Usually
Become Faster, Smaller, Cheaper

13. Books are in Jeopardy
• In a world of faster, smaller, cheaper,
print books have lost ground
• Expensive
• Unaffordable to vast majority of world’s literate
population
• Unavailable, inaccessible to global market
• Archaic rights practices limit distribution
• Geographic limitations of print distribution

14. BIG PUBLISHERS ARE MAKING THE
PROBLEM WORSE

15. UNTIL RECENTLY, BIG PUBLISHERS HAD
A MONOPOLY ON THE PRINTING PRESSES
AND DISTRIBUTION TO BOOKSTORES

16. Publishers were the deciders
• Publishers controlled:
• Who got published
• Who got distributed
• What readers could read

17. IT WAS A SWEET RACKET FOR
PUBLISHERS
Readers wanted books
Publishers controlled the supply
$
$
$
$
$
$
$
$
$

18. BUT THEN THE INTERNET
HAPPENED

19. … THE RULES CHANGED
FOREVER

20. TRADITIONAL PUBLISHERS ILL-
EQUIPPED TO SAVE BOOKS
uh oh!

21. They’re too slow
• 12-18 month release cycles

22. … their expenses are too high

23. … they’re exposed to too much
risk
• Pay author advances
• Can’t predict demand
• many books fail and don’t earn out
• Broken supply chain
• 30%+ of printed books returned to publisher
unsold
• Amazon is eating publishers for lunch
• Vertically integrated from authors to readers

24. Publishers try to mitigate risk by giving
bean counters increased influence

25. … bean counters make poor decisions
in the name of risk mitigation
• Adopt author-unfriendly policies
• Acquire fewer books from unproven authors
• Paying lower advances
• Require authors to assume more editing,
marketing responsibility
• Adopt customer-unfriendly policies
• Favor “commercial” books
• Scarcity tactics to maintain higher prices
• Limit worldwide distribution

26. WE NOW LIVE IN A WORLD OF
UNLIMITED ABUNDANCE
AND CONSUMER CHOICE

27. YET THE BUSINESS OF BOOK
PUBLISHING HAS CHANGED
LITTLE IN DECADES
(change is afoot)

28. Readers Demand Abundance and
Freedom of Choice
• Customer drivers:
• Price
• Convenience
• Selection
• What Wal-Mart did to small town businesses, what B&N
and Borders did to indie book stores, what Amazon is
doing to B&M bookstores, what the Internet will now
do to publishing
• Don’t blame Wal-Mart, B&N or Amazon – they’re only
providing what customers want
• Books, bookstores, publishers and authors must now
compete against unlimited abundance

29. TO SAVE BOOKS, WE MUST
CHANGE BOOKS
AND
CHANGE PUBLISHING

30. How to Save Books
• To save books, we must leverage
technology to make books:
• Smaller, faster, cheaper
• More available
• More discoverable
• More accessible
• More compelling than alternative content
options

31. The Better Book is Here
• It’s called an ebook
• Same book, only better
• Smaller, faster, cheaper
• More available
• More discoverable
• More accessible
• More functional

32. Ebooks as a percentage of US
wholesale trade market
Source: Association of American Publishers, publishers.org
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2002 2003 2004 2005 2006 2007 2008 2009 2010

33. As an author, the power to save
books is in your hands

34. Indie Authors + Ebooks + New eBook
Supply Chain Will Save Books

35. Indie Ebook Authors Have Opportunity
to Better Serve the New Customer
Requirements
• Benefits of indie ebooks
• faster release cycles
• instant access to global market
• democratized distribution
• closer to customers
• lower expenses
• no paper!
• never go out of print
• can offer lower cost, higher profit books

36. The Economics of Indie Ebooks Will
Drive Increased Indie Authorship
• Higher profits than traditional
• 70-100% net for indie e- vs. 5-25% traditional
• Price ebooks for less yet still make more per
copy than traditionally pubbed print authors
• $8 indie ebook earns over $6.00, vs <$.40 trad MMP
• $.99 indie ebook earns more than $8.00 trad MMP
• Lower price = reach more readers = more sales at
higher profits per sale
MMP=Mass market paperback, aka “pocket book” in some countries

37. My Predictions:
Ebook sales dollar volume will exceed
print within 5 years
Ebook unit volume will exceed print within
3 years

38. Summary
• Books are essential to the future of mankind
• We must save books by changing books and
changing publishing
• Books face increased competition from alternative,
lower cost sources for entertainment and knowledge
• Indie ebooks can make books more available
and more accessible to more people
• Thanks to ebooks, opportunity to connect
readers with books has never been greater

39. Thank you for listening!
Q&A
Where to find Mark Coker:
Web: www.smashwords.com
Blog: blog.smashwords.com
HuffPo: huffingtonpost.com/mark-coker
Twitter: @markcoker
Email: first initial second initial
@smashwords.com