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Smashwords gets self-published e-books to market

PUBLISHING
Published 4:00 am, Monday, May 9, 2011

  • Mark Coker stands in his personal library on the Peninsula. Coker became frustrated when publishers wouldn't buy his novel, so he used his Silicon Valley startup background to create a tech company that would help other aspiring writers to turn their works into e-books. Today Smashwords is the leading site for people who want to self-publish anything from vampire novels to family histories, and has tens of thousands of e-books for sale on its own site and through other online retailers like Barnes & Noble. Wednesday May, 4, 2011 Photo: Lance Iversen, The Chronicle
    Mark Coker stands in his personal library on the Peninsula. Coker became frustrated when publishers wouldn't buy his novel, so he used his Silicon Valley startup background to create a tech company that would help other aspiring writers to turn their works into e-books. Today Smashwords is the leading site for people who want to self-publish anything from vampire novels to family histories, and has tens of thousands of e-books for sale on its own site and through other online retailers like Barnes & Noble. Wednesday May, 4, 2011 Photo: Lance Iversen, The Chronicle

 

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Mark Coker's literary ambitions were badly shaken three years ago when he couldn't find a publisher for the novel he had written with his wife.

Now Coker is trying to shake up the industry that spurned him - through a company that has become a leader in the emerging world of self-published e-books.

Smashwords, Coker's Los Gatos startup, specializes in helping writers turn their work into e-books - digital documents that can be read on devices such as the Kindle, Nook and iPad. The six-person firm has allowed more than 17,000 authors to produce and distribute 43,000 titles since its creation in 2008.

"They are the default quick-and-easy way for someone to self-publish an e-book," said Mike Shatzkin, a publishing industry consultant with Idea Logical Co. in New York.

E-books represent one of the few growth areas within the doldrums of publishing. Monthly U.S. e-book sales tripled between February 2010 and 2011 to hit $90 million, while sales of printed books fell by 25 percent, according to the Association of American Publishers. Forrester Research estimates that annual e-book sales could reach $2.8 billion by 2015.

Most of today's e-book purchases are works from major publishers - digital versions of print bestsellers like "Water for Elephants" or Tina Fey's "Bossypants."

But self-published e-books - the category that Smashwords helped pioneer - have been grabbing the spotlight recently in publishing circles.

Reaching readers

Best-selling thriller writer Barry Eisler made headlines in March when he turned down a $500,000 advance from a mainstream publisher and opted to self-publish instead. Meanwhile, Amanda Hocking - a 26-year-old novice writer of young-adult fiction about vampires and other supernatural beings - landed a $2 million contract with St. Martin's Press after selling more than a million self-published e-books.

Smashwords isn't the only company helping writers like Hocking publish their work. Amazon and Barnes & Noble have divisions that allow people to create e-books formatted for their proprietary devices, the Kindle and the Nook. Many companies that let people publish their own printed books - traditionally known as vanity presses - now offer an e-book option too.

But Smashwords was one of the first entrants into the new niche of e-book self-publishing. And Coker approaches the field with both a crusading zeal and a business model that have proven attractive to many novice authors.

Smashwords lets writers format their work for a wide variety of competing e-reader devices, not just a single device like the Kindle or Nook. And unlike vanity presses, it charges no up-front fee to create an e-book and distribute it to online retail sites.

Instead, Smashwords charges a share of sales - 15 percent of the revenue that an author receives after online retailers take their cut.

"Mark was very forward-thinking, and the way he set the company up appeals to independent publishers," said Joel Friedlander, a book designer with Marin Bookworks in San Rafael and an expert in self-publishing. "There's no cost, no frills, it's a quick way to get your e-book into print, and you can do it in a day."

Coker, a former Silicon Valley publicist, started Smashwords in 2008 with the lofty goal of using technology to democratize publishing - allowing writers to appeal directly to readers without having to deal with gatekeepers such as agents and editors.

In keeping with this mission, Smashwords applies no editorial screening. The only e-books Coker refuses to distribute are ones that contain plagiarism, illegal content or incitement to racism, homophobia or violence.

As a result, many Smashwords e-books are riddled with grammatical errors, typos and writing that would make a sixth-grade English teacher cringe.

"Our books represent the spectrum, from total crap to brilliance," Coker acknowledged. "Yes, we publish a lot of garbage. But the silver lining is that it allows us to surface brilliant works that would otherwise never see the light of day. It allows everyone the opportunity to have their work judged by readers on its merits."

Self-financed

Coker has financed Smashwords himself, without angel or venture investors. The first few months of the business were shaky. Smashwords authors were selling only $5 or $6 worth of e-books per day - in total.

"People said, "How are you going to build a business selling self-published books that don't sell?' " Coker recalled. "Fifteen percent of $5 or $6 is not enough."

But interest in e-books grew as more people bought Kindles, iPads and other e-readers. By the end of 2009, Smashwords had a roster of 2,500 authors and about 6,000 titles. By September 2010, it was turning a profit.

Coker declined to disclose his revenue, but said it will be in the "millions" for 2011.

For all of Smashwords' rapid growth, the company faces some significant challenges. One is its relationship with Amazon, the biggest single retailer of e-books. Coker hasn't yet been able to negotiate distribution through Amazon's Kindle store, making it the one major e-book device and retailer that he doesn't reach.

So Smashwords authors are forced to use Amazon's self-publishing service to format their work for the Kindle - a big loss of potential revenue for Smashwords.

"In some ways, Amazon is their competition," said Shatzkin.

Smashwords could also face competition from more decentralized sources. Converting word processing files to e-book format is not terribly complicated from a technological point of view. If e-book conversion and distribution become a standard part of writers' software, it would undercut demand for Smashwords' services.

More tools

"There are a lot of consumer-level tools coming on to the market to create ePub files," said Friedlander. "For instance, Apple's Pages (word processing program) now has an e-book converter."

For now, at least, Smashwords remains a popular tool among self-published authors. Amanda Hocking uses the company for some of her non-Amazon distribution. So does Stephanie McAfee, author of "Diary of a Mad Fat Girl" - the only self-published work to show up on Sunday's New York Times list of best-selling e-books. Jack Erickson, a Burlingame financial adviser who has self-published seven mystery and suspense e-books, is closer in sales to the average Smashwords author than he is to a Hocking or McAfee. Erickson estimates his quarterly royalties at about $500. But he sounds as pleased as if he were raking in big bucks.

"Smashwords is a godsend," Erickson said. "It's created this tremendous gateway where you're at the narrow end, and all of a sudden your stuff is going out to readers in Brazil and India. That's very exciting for a writer."

Coker himself is a Smashwords author, as well as its CEO. His novel "Boob Tube" - the one whose multiple rejections led him to start the company - was the third book published through the site.

It was not exactly a financial success. Coker tried various price points - $9.99, then $6.99, then 99 cents. He sold all of 30 copies. Finally, five months ago, he started giving it away.

The paltry sales might lead some to conclude that all those publishers were right, and "Boob Tube" should never have seen the light of day. But Coker takes a different view - that his book fell victim to the startup that it spawned.

"I tell all our authors how important it is to market their books, but this failed primarily due to a total lack of marketing," Coker said. "I didn't follow my own rules. Smashwords had become all-consuming to me, a tsunami. I neglected my own book."

Digital self-publishing

Smashwords ( www.smashwords.com) isn't the only Bay Area company helping writers create their own e-books. Here are two other local firms with slightly different approaches:

-- Fast Pencil ( www.fastpencil.com): This Campbell company allows writers to create both e-books and printed books and offers social-networking capabilities through which family and friends can contribute to a writer's work-in-progress. Company officials say they have 25,000 individuals with works in various stages of progress, and thousands of finished books.

-- Scribd ( www.scribd.com): This San Francisco company allows online sharing of all kinds of written documents by converting them into HTML Web pages - a kind of YouTube for the written word. Books make up only a small part of the material posted on Scribd: There is everything from government documents to recipes. The company says it has more than 70 million readers each month, and tens of millions of documents on its site.

Find out more

Smashwords CEO Mark Coker, right, will speak about e-book publishing on Saturday in San Rafael and Sunday in Berkeley.

-- Saturday: 11 a.m., Bay Area Independent Publishers Association, First Congregational Church, 8 N. San Pedro Road, San Rafael. $3 members, $5 non-members.

-- Sunday: 2:30 p.m., American Society of Journalists and Authors (panel discussion), Berkeley Public Library, 2090 Kittredge St., Berkeley. Free. www.fearlessbooks.com/asja.pdf

E-mail Ilana DeBare at business@sfchronicle.com.


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