Smashwords just went Agency – signed new deal with Sony, B&N, Kobo

Mark Coker, CEO of Smashwords, just sent me the following email:

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 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.

About Nate Hoffelder (11475 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

4 Comments on Smashwords just went Agency – signed new deal with Sony, B&N, Kobo

  1. I guess indie authors won’t be able to offer Smashwords discount coupons. Maybe what indie authors ought to do is offer all of their ebooks for free on both Smashwords and Amazon and usrge everyone to only “buy” free ebooks at Amazon. I wonder how long Amazon would put up with that before adding a new clause to its contracts that requires indie authors to sell their books at an Amazon-determined minimum price.

  2. Richard, Amazon’s self-publishing operation doesn’t allow free e-books. For the basic “35% royalty” (wholesale) option, your e-book must be have a list price of $0.99 or more, and the minimum list price increases for books with a lot of bytes. For the “70% royalty” (agency) option, your e-book must be priced between $2.99 and $9.99, and Amazon reserves the right to reduce the price to match the competition.

    It’s the 70%-ers who had the problem with Smashwords. On the 35%/wholesale schedule, you get paid 35% of your list price, no matter how much or how little Amazon sells it for (or even gives it away). On the 70%/agency schedule, you get paid 70% of whatever the e-book actually sells for, which could be 70% of nothing if, say, Kobo priced your e-book at free and Amazon price-matched.

  3. I love this Indie Writer Revolution! 🙂 Now if only Smashwords would accept ePub files. That can’t be far behind, can it?

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