Draft2Digital Merges with Smashwords: Win-Win for Indy Publishers

The two titans of the self-publishing distribution industry, Draft2Digital (D2D) and Smashwords, have merged. According to an announcement released on February 8, 2022, the former has purchased the latter. The deal, which took effect on March 1, vastly expands the distribution territories of both distribution channels.

Transitions to the new platform will be gradual but, in the end, members of both current companies will share a common dashboard, common distribution outlets, and new, cutting-edge tools for book publishing, distribution, and marketing.

Kris Austin, co-founder and CEO of Draft2Digital, will lead the combined company as CEO. Mark Coker, founder and CEO of Smashwords, will join the management team as chief strategy officer and board member.

The name of the combined company will be Draft2Digital. The Smashwords name will live on through the Smashwords Store. The new Draft2Digital will represent a combined 250,000 authors and publishers of over 880,000 ebooks and 11,000 print books.

As tech journalist Dave Chesson noted in Kindlepreneur, the industry “has now been turned on its head.”

Mark Is Thrilled

Upon hearing the news of the merger, I felt both excitement and misgivings.

I’ve been a fan of Smashwords and Mark Coker since I discovered them about four books ago. I interviewed Mark for my latest book and repurposed that chapter as a blog interview.

I was excited about the deal because Mark was “thrilled” about it. He admired their “team, technology, and commitment to authors.” He applauded their business model that put authors first: “By design, we only make money when our authors make money. This aligns our interests with the interests of our authors. Together we will lead the next chapter of the indie author revolution.”

So Why Was I Dubious?

What I liked most about Smashwords, what first attracted me to them, was their policy of paying royalties to authors even if the payment was $.01. Yes, one penny.

In the world of author-publisher relations, this is historic. Smashwords and Draft2Digital should never be confused with the publisher—they are distributors. But their relationship with authors is similar in one major way: They both pay royalties.

As a book contract adviser with the National Writers Union for over thirty years, I’m familiar with the clause that allows publishers to withhold all royalty payments until the total royalty due equals some arbitrary minimum payment that the publisher’s lawyers made up. I’ve seen boilerplate contracts with minimum amounts as high as $100!

This means that all money due the author until the total equals $100 remains in the publisher’s bank account drawing interest for the publisher. With academic publishers, this could take years.

Then Smashwords came along and declared they would pay royalties as low as a penny, and monthly, not the traditional one or two times a year. As Mark told me, “It isn’t our money.” I asked him how they could do that. He said they simply created the software.

So, I had immediate misgivings when I learned of the merger. Would the new arrangement retain the penny royalty?

I reviewed D2D’s website. It said Draft2Digital delivers payments “once the threshold for payment has been met.”

What! A threshold? Had the penny royalty been sacrificed to seal the deal? I couldn’t believe it.

I No Longer Am

Fortunately, I didn’t have to. Upon further reading, I learned that the lowest royalty paid through Paypal remains a penny.

But it gets better. Direct deposit, formerly not available to Smashwords members, is available and also with a minimum payment of a penny.

Three other new payment methods do have minimum payments: International Direct Deposit ($20), Payoneer ($20), and Check ($100). Clearly, they are discouraging paper payment, a policy I support.

These payments, by the way, may be split for co-authors and collaborations, not an option with Smashwords.

D2D continues the monthly royalty payments.

One Link Does It All

D2D brings services to Smashwords members that enable us to produce books faster, at less cost, and that are more findable. For example, D2D’s Universal Book Link is a single URL that leads to a list of every online retailer that sells your book. You post this one link and your readers can choose from among retailers.

This idea is brilliant. I attempted to resolve the problem myself when I published You’ve Got the Time: How to Write and Publish That Book in You. On the book page, I displayed, along with the table of contents and a selection of testimonial quotes, the main places where my book was available for purchase: Kindle, Smashwords, Apple, Barnes & Noble, and Kobo.

But I know I left out some. Others have been added since. I can’t keep track of them all. Now I don’t have to.

I can’t imagine this service was difficult to implement but no one else was doing it.

CEO Kris Austin agrees. “Generally speaking, the UBL is a simple concept,” he told me.

The first major goal was to make sure authors were sending their readers to all retailers and not just the biggest retailer. However, we wanted a solution that didn’t require authors to spend hours building them. 

This meant we had to build a system that could scan dozens of websites to find where books might be listed. This scanning system greatly reduced the barrier to create a UBL, but it added significantly to the amount of development and continued maintenance of the system.

Automated End-matter

Another welcome convenience that I look forward to using is automated end-matter.

End-matter are the pages that appear before and after the main text. They include, for instance, the copyright, dedication, acknowledgments, and table of contents pages in the front; and the About the Author, About the Publisher, and Also by pages in the back.

Much of this information is repeated from book to book. With D2D’s opt-in automated end-matter, you enter the information once and it will be automatically retained or updated from book to book.

“For example,” Austin elaborates, “if you release a new book, we will automatically update the Also By page in all your previous books so that new readers of those books will know about your new one.”

Free Production Service, Including PODs

But the new service that I’m pretty confident will generate the most buzz among Smashwords members is D2D’s free production service for both ebook and—available for the first time for Smashwords members as soon as it gets out of beta testing—print on demand (POD). Just send them your Word file and they’ll do the formatting for free in all formats.

“Our experience has shown that a brand-new author, uploading their first book, will make it through in about ten minutes. Once you are a pro with the system, a full start-to-finish time is just a few minutes.”

Compare this to the Smashwords ebook style guide, a 30k-word ebook that mostly convinces technophobes that they need help—but, to its credit, also provides a list of techies who have mastered the coding process and now offer their services to others at reasonable prices.

After D2D creates your files, they tweak them so they fit onto every platform where D2D authors sell books. Why is this an issue? Two examples:

  • Cal Sharp, typesetter and graphic designer from Caligraphics, warns why you can’t use the Smashwords file on Kindle: “If you format your paragraphs flush left, with no first line indent, Kindle will sometimes indent the first line anyway. The workaround is to set the first line indent to 0.01” in the paragraph style, which Kindle will do, and it’ll look flush to the reader.”
  • Dave Bass, self-taught computer design and formatting expert, notes that IngramSpark uses a cover template that varies slightly from KDP’s. “I’ll obtain the IS cover template. Then, in Photoshop, I place the cover over the IS template layer by layer, adjusting elements like images or text (title, author name, etc.) as needed.”

With D2D’s automated vetting, we no longer need to make these adjustments. “D2D automatically customizes the files and metadata we send each retailer and library partner so that they meet their specifications and will display for easy discoverability and consumption by the readers.” 

No Obligation

They produce your book for free so they can make money on sales through distribution once it’s published. They take a 10% royalty. This is all good. Like Smashwords, they profit when the author profits, so it’s in their best interest to make us profitable.

“The most important thing to know is that there is no obligation. You will get to see a preview of the book before ever approving it for distribution. If you don’t like what you see, you can contact our support team for help.”

It gets better. Do you want to buy books to sell out of the trunk of your car or at public events? Once PODs are available, you will be able to order them, according to the D2D website, at their base unit cost.”

Austin explains, “It is important that authors choose to use Draft2Digital because of the value we provide them. Because of this position, we chose to have no contracts and no up-front costs. If, for whatever reason, someone feels we are no longer providing value. then they should be free to no longer use our service.” 

New Benefits for Draft2Digital Members

As we can see, Smashwords members made out okay by the deal.

So did D2D members, says Austin: “The biggest near-term benefit is that Draft2Digital authors will gain access to the most author-friendly retailer available.”

Specifically, D2D members now have access to the Smashwords Store where they can earn up to 80% of the list price. The store is home to Smashwords’ many marketing tools including Smashwords Coupons, Self-Serve Merchandising, Author Interviews, and their patent-pending Smashwords Presales tool for book launches.

“We plan to grow the Smashwords store and add even more author friendly features.”

In addition, D2D’s mainstream erotica fiction authors can extend their distribution reach thanks to Smashwords’ proprietary erotica certification system, a self-monitoring questionnaire that measures each book’s use of “incest, pseudo-incest, bestiality, rape-for-titillation and sexual slavery.”

Win for Smashwords and Draft2Digital

So, I feel confident in saying that independent writers and publishers from Smashwords and Draft2Digital all will prosper from this landmark new relationship.

On my end, this merger is only one of several reasons why I am now in the process of updating You’ve Got the Time: How to Write and Publish That Book in You. The second printing will be uploaded on D2D.

Stay tuned.

* * *

Ken Wachsberger is a book coach, editor, and the author of You’ve Got the Time: How to Write and Publish That Book in You. Ken’s other books may be found here and here. For book coaching and editing help, or to invite Ken to speak at your meeting, email Ken at [email protected].

Schedule your complimentary 30-minute coaching and editing session now.

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