Wow. Fascinating stuff (to me, non-writer). I still wonder how they'll get the exposure they need. I know there's no guarantee of exposure for "mainstream" authors either.
I was so willing to experiment in the early days, and I got so burned out on some of the un-edited poorly written crap put out at premium prices (based on word-count), that I pretty much stopped buying indi unless I knew the author already. (Or maybe got a highly-recommended freebie to sample first).
These days, the only Smashwords books I buy are reissues from "mainstream" publishers than now belong to authors I already know.
And to me, examples like the crap that is 50 shades of grey only prove the point, despite the hype.
I'm not saying I disagree with Ms. Rusch. In fact, I'm a fan of most of her work! (Can't stand 1st person, present tense, and one of her current series is written in it). But I'm thinking selfishly, as a cynical buyer, that I'll miss the potential of a gatekeeper to at least try to ensure some kind of quality before I spend my money.
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