It is most likely anecdotal evidence. There are always breakout successes where this worked - people published their story somewhere and it got big.

50 Shades of Grey comes to mind, which came out of a fanfic community and was already successful in that community and had a following before the marketing was cranked up. It's also a good example why I doubt the relation between "quality" and "success" that is made in your quote. It is objectively not a "good" book. It scratched a specific itch that had nothing to do with quality.

And I think that's the real lesson - if you happen to write about something that hits the zeitgeist in some way, then you will likely find success even without marketing. But what about that weird fantasy book that's really high quality, but only caters to a niche market? For word-of-mouth, you need a critical mass. This will not work for every book without marketing.

I don't know who this guy is, but I wouldn't listen to him, especially if he himself had success by publishing without marketing, but had not done any studies on it. It's a typical human problem that we cannot differentiate between having been lucky and having found a secret lifehack. In general you shouldn't listen to advice of famous people; they are famous to 99% because they were lucky on top of being talented (and hard-working).

TL;DR: No

I'm not really versed in the world of writing, but I do know things about software engineering and delivering content.

If you are just writing for fun and the royalties are a bonus, you can just leave it at that. If you want it to be more than a hobby, I think that's critically misunderstanding what these platforms are. Amazon, YouTube, Steam, any large and open platform aren't magic. They are storefronts, operated by a business who has their best interest at heart.

If you want to be a successful creator, you need to understand that. It is merely a tool you can use to serve your creation to the world. It's likely cheaper than printing or hosting your own service, and in turn you pay for it with a fraction of your sales. Sure, there are recommendation engines, but there is one thing you need to know about that: the recommendation engine simply does not work for you. You can imagine it as using recorded history to predict the future. If you have no past, the algorithm just can't picture your future.

Content can sell itself, success can happen by accident. We can probably agree accident isn't a very good business plan. Eventually your book will be pushed out of the first page of new releases and into oblivion. This simply cannot be the only place your name exists. That's what promotion is, it's putting your name out there, and that's why it is necessary.

To be honest, I think what he says is fairly ignorant. He has a big audience already, mainly due to putting in a LOT of effort and dedication for years to grow his online image and brand. When you've already got an audience, you've already got quite a network of potential customers. Without an existing audience and without marketing (i.e. letting other people know how amazing your new product is) in any form, you've got a very low, near-to-zero chance of magically popping up in the algorithms.

You could write the BEST book of all time, literally life-changing in all aspects, but if no one knows it exists, it's useless. From a business perspective, of course.

Services like these made many markets much more accessible than ever before. Literally anyone can write and publish their own books with almost no costs or risk involved (other than the time lost producing it, perhaps). That made the markets of media like books, music and video games explode. Thousands of books are published on Amazon every year and the algorithms are (most likely*) designed to take into account the possible successes of that product, which are a LOT of factors. But they (algorithms) thrive on hype, which is consisted of traffic, leads and awareness of its existence. In my honest opinion, coming from someone who's had MANY failures in trying to market my products and services, the worst you could do is to not do marketing in any form.

*) I've got no literal proof or numbers to actually back this claim up with, but this is my experience as a software engineer with an interest in cloud computing, big data and data analytics talking. So please take this claim with a grain of salt

I think this is a total myth. Even if the book is well written: If no one knows, that it exists, no one will buy it.

Promotion is the way to tell the people "Hey, here I have a good novel and it might be exactly what you want". Normally people don't go through several dozens of books, to find anything that suits them well. Just think about yourself. If there is nothing on the first site of your search, how likely is it, that you go to the next page. And this percentage is decreasing drastically with every site. You can go to the streets and ask 100 or 1000 people, how often they search for new books of "no-name" authors. If you extrapolate that, the quote will be pretty low, I think. It then depends on the land you live in and the market. In Germany, we don't have that much of a market for KDP Fantasy Novels, for example. The people tend to read imported novels, so it is way more difficult to promote their books.

Sure, there are a few success stories, but they mostly base on a solid community, build around that author.

Promotion is a very important part of the business, because especially self-publishers are depending on this to improve their sells

Yes and No.

When you are first starting out as an author, promotion is important. It does not matter who you are or how good your story is. If nobody knows who you are, it's unlikely people will see your story amongst the hundreds or even thousands of others of the same genre that get published yearly.

It is entirely possible for a story to be an exception to this rule though, (hence the "yes" part of my answer,) but the exception is important because of how rare it is to occur. The likelihood your story will sell is dependent on so many variables that I couldn't list them all if I tried, and surprisingly enough, the quality or merits of your story doesn't actually affect that as much as your marketing or promotion of your work.

For example, I have seen multiple book commercials for James Patterson's works. James is an acclaimed author (regardless of if you think he deserves it or not), yet he still has to advertise his new books (sometimes, to comedic effect) if he wants them to sell as well as they can.

Interestingly enough, I have never heard of Dean Wesley Smith, but wasn't surprised when I found out that he is famous mostly because he writes official fanfiction. This actually slants the results of his book sales in his favor. Of course he wouldn't need to advertise his writing, the shows and movies he licenses serve as his advertisements. This means most of his books have never gone without indirect advertisement, regardless of what he wants to claim. Furthermore, he has been writing for decades, meaning he hasn't been interacting in this modern era as a new writer, so he is completely out of touch with the reality of being a writer in this day and age without an existing fanbase as a crutch. I have nothing against the guy, (as I said, I just found out about him,) but he can probably get away with just writing a story and putting it out there because he isn't usually writing an original work, and even when he is, he has already spent decades building an audience who would be looking out for his new stories. This erases the value of any input he gives to new authors in regards to NOT marketing.

In short: What works for Mr. Smith will not and can not work for new authors. At least not consistently beyond 1 in 1000 good authors, and most new authors are not good.

This isn't to say his premise is ENTIRELY wrong though. If you already have an audience thanks to publishing your past works on sites like Wattpad, then yeah you could probably get away with not marketing your first published-for-sale story through traditional means (commercials, advertisements, and pushy marketing campaigns), but you still need to let your readers on those outlets know you have a book for sale. Whether you do that by posting on social media about it or by just putting it in your bio, that's up to you, but it should still be done. After all, James Patterson is easily one of the most read authors of today as he writes stories for all age groups and with various genre appeals. That doesn't mean he is the best or THE most read, but he is one of them by virtue of his reach as an author. Yet even he still sees need to advertise. This suggests that what Dean Wesley Smith calls a "myth" can't be entirely false, otherwise there wouldn't be any well-known authors who'd need to advertise their works.

Standard marketing doesn't work great for books. When is the last time you bought a book based on an ad campaign? Probably never, right?

With that said, there's a lot of books out there, especially on Amazon. The odds are against any given book being even noticed, let alone read. So if you want your book to be given its best shot, you'll need to be prepared to put some work in.

Here are some things that will probably work better than marketing campaigns. Doing author interviews. Getting your book reviewed on blogs or in local media. Networking with influencers in your genre. And, of course, having either a really good book, or one that really appeals to a certain audience (or both). Just think about the avenues that would genuinely convince you yourself to read a book that someone else wrote, and then figure out how to tap into those.

No. Nothing automatically sells itself. These platforms however, lower many barriers to entry and make sales transaction very easy.

I understand that in a traditional publishing model only 10% of books make a profit. These books have to support the publishing house for the 90% of losses. With the digital platforms there aren't these costs. Publisher means marketer, and they would get the bulk of the profit.

This has changed with the new digital platforms, and because you can now write it tonight and publish it tomorrow, and be paid by the end of the month. BUT. Your work is going to need an audience. Whether you go to that audience or try to draw that audience to you. You'll be marketing.

Don't be believe those who have an established audience or gone to an established audience (a wise marketing decision, sell food to the hungry crowd), when they tell you in a "marketing" piece that you don't need to market.

Marketing is everything you do to draw an audience, and to spread the message you have. If that's because you've written a great novel, a mediocre story, fan fiction or have the world's best selling soda.

It's all about marketing generating interest in your story (single mum writing, whilst on benefits) or the story you've written (boy goes to wizard school). None of which came out of the author sitting around her Scottish flat waiting to be recognised. Even the choice of how her name appeared was a marketing decision because "small boys don't buy books written by girl's".

Everyone markets and the successful have a plan, do the work, and campaign.

Marketing is attracting an audience's attention. Once you have their attention then, you start the sales processes. Without the audience's attention there can't be any scale to the sales. You don't need to be a hugely skilful marketer but you should know you'll better off marketing.

Update: It occurred to me after I submitted the answer you should be clear on your goal. Do you want to be the best writer you can be? Get the freedom to write because you make sales? Sorry I got caught up in the marketing question and forgot it's perfectly acceptable to be a writer without selling.
Be clear on what you trying to achieve.

No. The identity of the author matters a great deal, as evidenced by J. K. Rowling's experience when she tried publishing a new book under a pseudonym. Rowling is the author of the Harry Potter series and a very well-recognized name. At the moment, one can practically guarantee that any book written by her - even if it's terrible - will sell well.

In 2013, under the pseudonym of Robert Galbraith, Rowling published The Cuckoo's Calling. You can see from the sales & reception section that the book was met with critical acclaim. This allowed the book to sell quite well by book standards: 1500 physical copies as well as 7000 electronic copies. But then after Rowling was identified as the author, sales blew up. The book went from the 4709th best-selling novel on Amazon to the first. That is the how powerful Rowling's name is.

Note that, as given in the "editions" section of the Wikipedia article, the book was published with three quotes from fellow crime novelists. This is a sign that marketing has already been done on it, so it's not a complete analogy. Still, you should be able to see how star power matters in getting a book to sell. A good book will sell better than a bad one, but a bad book by a well-known author will also sell better than a good book by an unknown author with no advertising.

Maybe.

As another answer notes, Amazon isn't magic. It's a business. And that's exactly why Dean Wesley Smith may be right.

If Amazon makes money by selling your book, then it's in Amazon's interest to promote it. Specifically, it's in their best interest to develop algorithms to analyze trends and promote books that will appeal to a large number of readers. (Which for the purposes of this answer is a proxy for "good.") Amazon has sufficient developer and computational resources to be very good at this. Therefore, if you write a "good" novel, it's entirely plausible that you can just throw it on Amazon and let them make it a best seller. But how well this actually works depends on whether Amazon is competently acting in its own best interests, which is hardly guaranteed.

Coca-cola is the worlds biggest brand, you would think they are enough of a household name that they dont need to promote but the reality is they spend more on their ad campaigns than any other company in the world.

The link between quality and sucsess is also strange. You dont really need to write anything of substance to make money of a book. 50 shades of grey has about as much literary merit as a hustler but still remains the second best selling book in history. As it turns out appealing to the sexual urges of women is a great idea for a sucsessful book.

Another great example is the davinci code, it at its heart is a novel about how Jesus had a child and how someone wanted to trace his lineage. There is absolutely no evidence of any sort that Jesus ever had a wife or child but that does not stop Dan Brown from parading his tripe as history.

You dont need any sort of quality in any of your writings, as is the case with many art forms the prophet is rarely acknowledge in his own generations. Many authors, just like many artist find no succses in there own lives and only years after they die do people actually realise how good there work was.

Your writing should be a mirror image of yourself. You should write for yourself and be the best writer you can be, leave the rest to fate.