Ebook distributor Draft2Digital is taking over self-publishing pioneer Smashwords in a merger of two of the leading aggregators in the indie author market.
The combined company will operate under the Draft2Digital name and all Smashwords and Draft2Digital employees are expected to join the combination.
Draft2Digital and Smashwords have both been major players in the self-publishing sector over the last 14 years. Their publishing platforms are used by 250,000 authors and publishers around the world to publish, distribute, market, and manage more than 800,000 ebooks and 11,000 print-on-demand paperback books.
Kris Austin, co-founder and CEO of Draft2Digital, will lead the combined company as CEO. Mark Coker, founder and former CEO of Smashwords, will join the Draft2Digital management team as Chief Strategy Officer and board member.
Both companies are entering the acquisition profitable and debt-free. The deal is an all-stock transaction, meaning no money is changing hands.
Kris Austin says, ‘I’m pleased to welcome Smashwords authors, publishers, employees and partners to the D2D family. Early in our discussions with Smashwords, we each realized we can accomplish so much more for the indie author community by working together than working as competitors.
‘The resources we once expended creating duplicative systems can now be redeployed to ramp up our R&D investments in next-generation tools to empower authors and publishers.’
Mark Coker says, ‘I’m thrilled to join forces with Draft2Digital. Over the last decade, I’ve come to deeply admire Draft2Digital’s team, technology, and commitment to authors. Our shared business model is a key to our two companies’ success. We put authors first. By design, we only make money when our authors make money. This aligns our interests with the interests of our authors. Together we will lead the next chapter of the indie author revolution.’
Features of the deal include:
- Draft2Digital authors will gain access to the Smashwords Store and its exclusive book marketing tools, including Smashwords Coupons, self-serve merchandising, Author Interviews, and the patent-pending Smashwords Presales tool for book launches. Sales at the Smashwords Store have grown in each of the last five years, with December 2021 sales up by 20% over December 2020.
- Draft2Digital’s erotica authors can look forward to expanded distribution enabled by Smashwords’ proprietary erotica certification system, which allows retailers to carry erotic romance and mainstream erotica with greater confidence.
- Smashwords authors will be able to use new tools that simplify print and digital publishing. Those tools include D2D Print, the company’s POD service for paperbacks (currently in beta); improved metadata management tools for better book discoverability at retailers; automated end-matter for series books; payment splitting for co-authors and collaborations; and more payment options, including direct bank deposits.
- Retailers and libraries served by the companies can expect greater title selection and merchandising recommendations.
- Customers of the Smashwords Store will get an improved store experience and an increased selection of books.
The acquisition is expected to close on March 1, 2022.
To minimize workflow disruption for authors, publishers, and sales partners, the two platforms will combine their systems in gradual and incremental steps.
Authors and publishers of both companies can continue using their current platform of choice and over time there will be a switch to a common dashboard, common distribution outlets (including distribution to the Smashwords Store for current D2D authors), and an expanded suite of new and improved tools for book publishing, distribution, and marketing.
The effect of the merger on authors
If you’re an author or publisher with either Draft2Digital or Smashwords, there’s nothing you need to do as it will be business as usual.
Over time, publishing and distribution systems for both Smashwords and Draft2Digital will be integrated on to the Draft2Digital website.
What are the erotic fiction policies of the new company?
Each retailer, subscription service, or library platform has its own content policies. Draft2Digital will adopt the existing Smashwords erotic fiction policies for these platforms.
A few years ago, Smashwords introduced a certification system that allows erotic fiction publishers to self-certify the presence (or lack thereof) of various facets of erotica that are generally recognized as ‘taboo.’ This more granular categorization provides retailers and libraries with the confidence they need to know that the erotic literature they’re selling doesn’t violate their policies.
The Smashwords Erotic Fiction Certification System will be made available to all Draft2Digital authors.
Will the erotica policies change in the Smashwords Store?
Smashwords has a long history of supporting the erotic fiction community. No changes are anticipated to the policies documented at https://www.smashwords.com/about/tos, nor have there been any changes in the last four years.
The policies on permitted, discouraged, and forbidden erotica categories remain in effect. The Smashwords Store has a more permissive approach to taboo erotica than most ebook stores. The store gives customers control over the types of erotica, if any, that appear in their search results.
The shifting scene in self-publishing distribution
The self-publishing ebook distribution scene has changed over the past few years. There was a sudden influx in companies serving the sector around 2017 when Pronoun and Type & Tell, which were both owned by traditional publishers, entered the market proclaiming ‘100% royalties’. Both companies shut up shop within months.
At the time, the usual business model for ebook distributors was for a 10% net royalty share. This remains the pricing policy for D2D and Smashwords.
PublishDrive made a move into the ‘higher end’ of the self-publishing market in 2019 by scrapping the ‘royalty-share’ business model and moving on to a subscription basis where authors keep all their net royalties but pay a monthly fee of $49.99 for up to 24 books or $99.99 for up to 48 books.
Draft2digital was founded in 2012 and is based in Oklahoma City. It is a leading publishing platform for self-published authors and offers a range of free and powerful automated and self-serve tools that authors and publishers can use to build and grow their businesses.
Mark Coker set up Smashwords in 2008 as a pioneer in ebook self-publishing. The company’s platform made it possible for writers to produce, publish, and distribute ebooks. As a distributor, Smashwords was the first to open multiple major retailers and library ebook platforms to self-published authors. Nearly $200 million worth of Smashwords ebooks have been purchased at retail, and over $110 million paid out to authors and publishers.