Smashwords founder Mark Coker has been making his predictions for 2014 and he reckons it’s going to be a challenging year for indie authors but potentially a rewarding one and he believes indie authors are now the stewards of publishing’s future.
Self-publishing pioneer Smashwords now publishes over 275,000 titles, up 45% on a year ago, and supports the publishing strategies of over 83,000 authors worldwide, up by 42%.
The company saw record revenue, with authors’ sales growing to $20 million, a 33% rise from $15 million in 2012. Coker points out that 100% of the revenue came from the sale of books to readers, entirely based on commission on book sales to readers which for most sales is 10% of the retail price.
Smashwords was set up five years ago in 2008 and has remained self-funded and sustainable without outside venture capital. It has been profitable for the last three years.
In his forecasts for the year ahead, Coker thinks big publishers will finally get to grips with the realities of ebooks and cut their prices to compete in the sub-$5.99 market which has been the indies’ preserve which will mean price promotions become less effective.
Ebook growth will continue to slow as exponential growth could not continue forever and competition will increase dramatically. However, while ebook sales, measured in dollar volume, will fall, ebook unit market share will rise in unit sales and downloads and more books will be read than ever before.
Coker foresees a new wave of big-name authors defecting to Indieville. Publishers will try to hold the line on 25% net ebook royalties, so big authors will see earnings hit as prices drop. Readers moving to ebooks will also make print distribution to bookstores less important, weakening the appeal of big publishers.
Despite the fierce competition, Coker believes great writing and professional editing will pay off.
He considers 2014 will be the year that all authors start to become indie authors. Writers can write a book with the confidence that it will get published. Publishing power has transferred from publishers to writers.
Subscription ebook services have to potential to change the game, Coker says, if services such as Scribd and Oyster can make their business models work. It’ll become a utility service in the same way that water and electricity are utilities.
Traditional publishers are likely to re-evaluate their approach to self-publishing. Coker is highly critical of the vanity approach to self-publishing, as witnessed by Pearson/Penguin’s acquisition of Author Solutions, which he says has shown itself to be a boondoggle that has harmed the brands of traditional publishers.
The Author Solutions business model, he says, is all about selling $15,000 publishing packages to authors who will never earn the money back.
Coker says publishers need to build or buy their own self-serve publishing platform to take a risk on every author and to form a relationship with every author. By operating a free publishing platform, publishers would have the ability to serve the diverse needs of all authors. Compensation and level of investment could vary based on level of service.
For authors, platform is king. Authors who can build, maintain and leverage their platforms will have a significant competitive advantage. There are two primary factors that drive sales of any product or brand – awareness and desire.
Multi-author collaborations will become more common after many successes already seen with authors collaborating on boxset compilations of existing and original content. These boxsets are often competitively priced and offer readers the opportunity to discover multiple new authors in a single book and amplify each other’s marketing efforts by leveraging each other’s platforms.
Production will take on increased importance as Coker points out that one of the most important secrets to ebook publishing success is to write more books. Authors who write great books (and produce more of them) are the authors who build sales and platform the fastest.