[14 January 2009]
San Jose Mercury News (MCT)
Like others, Mark Coker, a Los Gatos, Calif., entrepreneur and aspiring novelist, has learned about the challenges facing new authors - many of whom never get published. And even if they do, aside from a handful of blockbusters, the few books that make it to the shelves of bookstores rarely stay there. If books don’t sell well enough, they are sent back to the publisher and very quickly go out of print.
Coker decided the Web can fix this. Last year he announced Smashwords, a free platform for publishing electronic books, or e-books.
This isn’t the first time that Coker has tried to democratize a major U.S. industry. In 1999, he launched BestCalls.com to help level the playing field for small stock investors who, at the time, were being denied access to earnings of publicly traded companies. Part of the “Open Conference Call Movement,” BestCalls.com helped bring about Regulation FD, which forced public companies to disclose information to big and small investors at the same time.
Coker spoke with the San Jose Mercury News about how he thinks Smashwords can make a difference. The following is an edited transcript.
Q. What is Smashwords?
A. Smashwords is a digital publishing platform that allows anyone to become an e-book author.
Q. How does it differ from a regular publishing house?
A. The process for most published books is that an author finds an agent, the agent sells the book to the publisher and then it takes anywhere from 12 months to 18 months to see that book published in stores. And then once that book is in stores, it’s got just a couple of weeks to sell while the bookstore can still return the book for a full refund. With Smashwords we help independent self-published authors publish e-books on their own so they simply upload their finished manuscript as a Microsoft Word file into our system and then we automatically convert that file into about 10 different e-book formats so these books can be read on the iPhone, on the Amazon Kindle and on virtually any other e-book reading device.
Q. What about copyright?
A. With Smashwords, the author owns the copyright, owns all the rights to the work and sets their own price for the book and the sampling privileges.
Q. By sampling, do you mean how much of the book can be sampled by a search engine, such as Google Book Search?
A. Yes, when an author publishes with us, after they choose the price, they can choose what percent of the book is made available as a free sample.
Q. What is the business model?
A. The author receives 85 percent of all the sales and we take a 15 percent cut.
Q. It sounds like authors get more freedom and control.
A. I designed the service to put authors in complete control over their work.
Q. What led you to found Smashwords?
A. My wife and I wrote a novel about six years ago. We signed on with one of the top literary agencies in New York City, and after about two years they were just unable to sell our book. It was an eye-opening experience. All the publishers came back and said they thought it was a great book, but they questioned whether or not the intended audience actually read books.
Q. What’s your book about?
A. It’s a novel about the soap opera industry. My wife Lesleyanne is a former reporter for Soap Opera Weekly magazine and we gathered up real-world stories about the soap-opera industry and then we fictionalized it into a novel.
Q. What was your reaction?
A. It was a difficult experience for us to be rejected that way because we had shown the book to multiple readers, and people really enjoyed the book. I found it frustrating that a publisher would stand in the way between us and our potential readership. And it dawned on me that the system just doesn’t work for authors.
Q. And so Smashwords was born?
A. It’s very similar to YouTube. On YouTube, amateurs can publish a video, and the good videos go viral and are viewed a lot. It’s the same thing with electronic books.
Q. How is Smashwords different from self-publishing services like Lulu, Wordclay or Createspace?
A. With those services you go to their Web sites and you upload your manuscript as a Microsoft Word file and they allow you to publish in print, very quickly, within days. I think those are great services and I recommend those services. The difference with Smashwords is Smashwords is focused entirely on electronic books, digital books.
Q. People have been talking about e-books for years, but so far they have failed to get a foothold. Why do you think now is the time that e-books are going to catch on?
A. In the late 1990s there was a lot of hype about electronic books. E-books failed to live up to the promise, primarily because publishers tried to lock down the books using digital rights management schemes or DRM. DRM is a way of preventing piracy, but the problem with it is when you use it you are treating your customers like criminals. The second problem is publishers were pricing their books at the same price as hardcover books. Customers resented this idea that they would have to pay $24.95 for a digital book that they knew didn’t cost anything to print. Also, the technology wasn’t quite ready.
Q. What changed?
A. All three of these things have changed. Today more and more publishers are dropping DRM. Prices are coming down to a more reasonable level. Screen technologies have improved and in some ways it’s more enjoyable reading on screen than reading on paper.
Q. Is there evidence that e-book sales are growing?
A. Yes. If you look at book industry sales over the last five years, traditional paper book sales have stagnated. They’ve only been growing 1 or 2 percent a year for the last five years. And then over the last few months we’ve seen book sales drop off dramatically. Starting in September book sales fell off a cliff, down about 20 percent. And then October and November were equally bad. But at the same time, over the last five years, electronic book sales have surged, growing at a compound annual rate of over 50 percent. E-books are now the fastest growing segment of the book publishing industry.