We've renegotiated our ebook distribution agreements with Barnes & Noble, Sony and Kobo. Effective yesterday, our 10,000+ Smashwords authors and publishers now determine their ebook prices at retail. No more discounting. The move also allows us to increase the royalty rates we pay authors and publishers to 60% retail price across the board.
Yesterday, I blogged at http://blog.smashwords.com/2010/11/smashwords-puts-authors-and-publishers.html about how book publishing is now navigating the crosscurrents of two conflicting ebook distribution models - "Agency" and "Traditional Wholesale." Prior to yesterday, we juggled both at Smashwords. Going forward, we're agency or agency-like, meaning that our authors and publishers determine their price at retail.
While much of this might taste of inconsequential inside baseball to those outside the book publishing industry, I think our news today is important to the emerging indie author movement. Indie ebook authors and small publishers now have the ability to outcompete the big NY publishers on a new level playing field we're helping to create. In fact, in the ebook space, we're moving to a world where the playing field is tilting to the indie author's favor. Indies aren't hamstrung by the high expense structures and slow publishing cycles of the big NY publishers. In the future, the success of books won't be determined by big marketing budgets - they'll be determined by the viral word of mouth of readers, catalyzed and amplified by social media. If a book resonates with readers, it spreads. If it doesn't resonate, it becomes invisible. Readers decide what's worth reading, not publishers.