J.K. Rowling's Big Deal

Will Pottermore, an online distributor of Harry Potter e-books, spell the end of the traditional bookstore?
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J.K. Rowling's decision to sell her Harry Potter e-books directly to consumers across every reading device (assuming she can conclude the necessary agreements which, given the stakes, seems inevitable) is a very big deal—in all the meanings of the term. Rowling has sold 450 million books worldwide to date in seventy languages—$7 billion in sales, according to the Wall Street Journal. This is only the beginning of what is certain to be a lasting demand for the series, as young readers reach the age when they launch into the spell that so enraptured the first generation to encounter the seven books as Rowling released them to mounting popularity and excitement.

What we didn't know about Rowling is that she is as brilliant (or shrewdly advised) a businesswoman as she is a storyteller. As other authors turned over their digital rights to publishers—including superstars such as James Patterson and John Grisham—Rowling held back, allowing the books to be sold only in printed and audio versions. Now, Rowling has made her move with the announcement last month that, after a test version this summer and the release of the last of the films—Harry Potter and the Deathly Hallows, Part 2—she would begin selling the e-book versions of the Potter novels in multiple languages through a freely accessible site called Pottermore. She also plans to supplement the books with substantial new content and other enhancements bound to attract an enormous audience.

Rowling's decision to share some of the proceeds of the book sales with her print publishers—Bloomsbury in the United Kingdom and Scholastic in the United States—is another measure of her careful management of this breakthrough in marketing strategy. While the digital sales through the site are likely to be huge, the printed books have a very long way to go before they are no longer a major asset to Rowling, her publishers, and booksellers. Pottermore is a guaranteed success, once details are worked out with the major e-book retailers including Amazon, Barnes & Noble, Apple, Google, and Sony, which may well have been done by the time you read this piece. The big question is how significantly Pottermore will impact the rest of the book trade.

There are major rumblings across the spectrum of authors, agents, and digital booksellers—especially Amazon—about ways to sidestep the traditional retail channels, with the clear intent of pulling a substantially larger share of sales proceeds than they have in the past. Rowling's initiative is bound to encourage other major authors to press for a greater portion of revenues than they have received so far, with the implied "threat" of breaking away from their long-time partners and going direct to consumers.

Rowling's Harry Potter series is a unique commodity in the modern book trade because of the scale of her international success combined with the movies that have earned another $7 billion plus in sales. The Potter franchise has surpassed other recent literary phenomena such as Stephanie Meyer's blockbuster vampire books in large part because of Rowling's savvy unveiling of both the content of the books and the packaging of them. Predictably, the reaction to Rowling's announcement provoked alarm among some booksellers. "Brick and mortar stores are taking a lot of bullets and there's a limit to how many bullets we can take," Roxanne Coady, the outspoken owner of R. J. Julia booksellers in Madison, Connecticut, told the Associated Press. Although Coady's store is one of the 200 independents that now sell e-books through Google, she still sees the digital surge as an overwhelming challenge to retail booksellers in general: "If the sellers of the Rowling e-books are saying they don't need brick and mortar stores, then that's the result you'll get," she said.

Writing in Publishers Weekly, Rachel Deahl took a cooler view: "Many people who work in publishing think that as interesting as Pottermore is, the endeavor says less about the future of book publishing than about the singular status of a very wealthy author who has the inclination and means to build her own brand." One major factor is that publishers no longer forgo digital rights when acquiring books, as Rowling's publishers did. Her original contracts long predated the explosive arrival of e-books. As Deahl pointed out, Rowling, then an unknown, contracted with Bloomsbury, which considered digital rights to be irrelevant, and Scholastic simply modeled its contract on the British one.

Rowling is so formidable a force that booksellers, no matter how they react to Pottermore, can hardly risk downgrading their support for the printed series. In fact, on the day that Rowling made her announcement, Barnes & Noble linked to her video as part of its promotion of the series and highlighted, as they now do in every way, the B&N Nook. But however the Pottermore distribution model eventually turns out, it is another giant step in the transformation of the book business. The most recent major survey of adult readers, conducted by the Pew Internet Project, showed that the numbers with an e-book reader had doubled from 6 percent to 12 percent in six months from November 2010 to May 2011. As an interesting aside, the increase in tablet ownership has been significantly slower.

Storybook franchises, especially those for children and teenagers, already have a history to be reckoned with. The great Disney empire started with a 1933 black-and-white short about a mouse named Mickey. So Pottermore, for all the attention it has justifiably received, is a significant development with unforeseen consequences, like so much else in this turbulent era for the world of publishing.

Image: David Cheskin / AP