Brave new e-books

We've seen the future of publishing, and the wrong people are freaking out.

Published March 29, 2000 5:00PM (EST)

To Matt Lauer, host of "Today," "Riding the Bullet," the 66-page novella by Stephen King that was released in e-book form by Simon & Schuster earlier this month, sure looked like the future of publishing. On his show, Lauer pressed Simon & Schuster trade publishing division CEO Carolyn Reidy with what he considered a trenchant point: "You get a proven author like Stephen King, who's pretty good and has written so many books he probably knows how to do some editing. He could take his works right to the Internet."

To readers and casual observers, Lauer's proposal doesn't sound that far-fetched. Time magazine, in a cover story featuring King, touted the Internet not just as an amateur's playground but also as a professional's potential gold mine, observing that "if you're already a star, you can avoid the middleman by using the Net to keep most of the money yourself."

Authors like King or John Grisham already enjoy extensive name recognition, and some of these writers often rely on their agents, not the editors at publishing houses, to edit their work. Several big names even hire publicists to spread the word about their books, making an end-run around the marketing campaigns that book publishers claim will still make them valuable to authors in the information age. Surely, outsiders like Lauer and many of his viewers have been thinking, it's the publishers of name-brand authors like King who ought to be worried right now.

In fact, any e-book-initiated shake-up in store for the publishing industry is likely to strike hardest in other sectors. Several factors conspire to protect traditional book publishing houses from the prospect of seeing their bestselling authors defect to the still-evolving e-book publishers. The real threat, in fact, may be to glossy magazines, book distributors and vanity presses.

A case in point is, an online publisher and retailer in Santa Clara, Calif. had originally attempted to obtain the rights to "Riding the Bullet," only to be slapped down by Simon & Schuster. "We met with [Simon & Schuster president] Jack Romanos," said Judy Kirkpatrick, executive vice president and manager of's new publishing division, "He did not want us to approach 'Simon & Schuster authors' directly, and if we did, he would perceive us as competition and act accordingly." contends that Simon & Schuster's decision not to let join other online retailers like and in selling King's book was a way of punishing for presuming to poach on the venerable publisher's territory. (Simon & Schuster says it did this because allows purchasers to download a book twice.)

If Round 1 in the battle between the people of the old book and the people of the new book seems to have gone to Simon & Schuster, nevertheless has other irons in the fire. It has just launched, a "digital marketplace" where writers and readers can publish and purchase "eMatter." is kicking off the launch of this new division by making "American Perspectives," a series of essays on the Bill of Rights, available free in PDF format for downloading and printing. Contributors include Whoopi Goldberg, Newt Gingrich and Pete Hamill, each writing on a different amendment.

"We're the sweet spot of something that is longer than a magazine article and shorter than a book," says Kirkpatrick. anticipates that its customers will print out the content for "reasons of comfort and convenience." The company is negotiating with Time Warner, Random House and John Wiley & Sons about other editorial projects as well. "One of the things we've talked to [Time-Warner trade publishing chairman] Larry Kirshbaum about is publishing early chapters of books before they're made available," Kirkpatrick said. "So we're looking at chunking up content and selling it by the drink, so to speak." claims to be the second fastest growing company in Silicon Valley (right behind eBay), with sales that rose 78 percent to $35.3 million in its fiscal year ending Jan. 31 -- although its net loss mushroomed from nearly $10 million to over $30 million in the same period. Around 75 percent of's revenue derives from the sale of in-house books and training materials to companies like Lucent Technologies and the Bank of America. In addition to corporate publications, offers more than 7,000 titles by 5,000 fiction and nonfiction authors, who in general pay a $1 per month hosting fee to keep their books available. authors also receive royalties at 50 percent of their sales. (That's after they've earned out any advance.) That's a sweet deal compared to the 5 to 15 percent royalties paid by traditional book publishers. Nevertheless, brand-name authors haven't been rushing to such publishers to reap the rewards. "The first issue," says David Gernert, Grisham's agent, "is how many people can an electronically published story reach and how will those people know where to get it? So they offer [an author] the moon and the stars, but does John or Stephen King or any other author of that stature want to bestow that legitimacy, that superiority, on one electronic publisher? It's almost a power I don't think they want. No one knows at this point how these electronic publishers will perform."

Gernert says that electronic publishers have approached Grisham, but none has succeeded in persuading him to go digital, partly because the needs of author and e-publisher don't, as Gernert sees it, entirely coincide. "For an electronic publisher to say that they're publishing Grisham is instant legitimacy and instant publicity and instant viability," he says. "As an author you would want a story to go on as many computers, Web sites and devices as possible."

Furthermore, heavyweight authors often prefer to do what most writers dream of doing but can't for financial reasons: devote themselves to writing. They'd prefer to leave the business of promoting a book and getting it to readers to a publisher. "Writers are supposed to be writing books," say Chuck Verrill, an agent who edited King for 10 years at Viking. "Publishers are printers and foot the marketing bill. The other problem for authors is distribution. Publishers know how to distribute books." As many have observed, if King wanted to get into the business, he could certainly afford to buy his own publishing house.

Nevertheless, authors and their representatives are not indifferent to the lure of 50 percent royalties -- they just want to see the kinks ironed out first. "There will be some serious attention paid to e-publishing royalties," says Gernert. "I think we will be having a very different and interesting conversation about this issue in three years. I think a lot is going to change." And traditional publishers have taken note as well. "Part of the problem will be finding a royalty structure that works for us, for the agents and for the authors," says Kirshbaum.

Traditional publishers like Time Warner and Simon & Schuster obviously have no intention of loosening their hold on the reins as the book industry enters the digital era. If anything, they will seek to expand their dominion through this new medium. "I don't look at electronic publishing as a threat," Kirshbaum says. "I look at this as an opportunity for publishers to develop a supplement to their print business. On balance, we'll hold onto our authors and we will exploit their electronic possibilities."

As a result, e-book publishers who haven't already got a toehold in print book publishing may wind up with lists limited to public domain classics and books that print publishers wouldn't touch anyway. Vanity presses, who for a fee print up unpublished books (books that often wind up moldering in boxes in the authors' basements and attics), may find their business undercut by "print on demand" publishers like

The Campbell, Calif., company takes an author's electronic manuscript and converts it to QuarkXPress files so that copies of the book can then be printed and bound. Once ordered by a reader or bookstore, an title is then manufactured in an "on-demand" printer (which resembles an enormous photocopier) built by Lightning Print, a subsidiary of Ingram, a national book distributor.

Authors pay a minimum of $99 to publish their books and they have the option of purchasing a range of services in addition; publishing with a full editorial review, for example, costs $299. "Our fear is that incredible numbers of titles are being published" by traditional book publishers, says publisher Kenzi Sugihara, a veteran of Bantam Books and Random House with 30 years of experience in the field, "but the exposure and selection of titles is narrowing. We feel we're stepping into the gap."

The peril, of course, is that the lists of electronic publishers will become virtual slush piles, refugee camps for books that only their authors could love, such as's "Solo Explorations in Male Masturbation" and's "Chocolate Sauce and Malice." Although their combined lists comprise 7,200-odd titles, or have seen few, if any, of their books reviewed in major media.

However,, which offers 20 percent royalties and insists that it does sometimes reject books, can boast at least one break-out success (at least by its own modest terms). Natasha Munson, a New Jersey real estate agent who grew impatient waiting for New York publishers to respond to her manuscript and went with the e-publisher instead, has sold several thousand copies of her inspirational title "Life Lessons for My Black Sisters."

Steven Gooderich, the company's strategic channel program director, was intrigued by the title one day when he was on the site, read it and showed it to his colleagues. "We were all impressed by it," Gooderich said. He then alerted a Barnes & Noble buyer. (B&N owns a 49 percent interest in "I will share a book with anyone who will listen," he said. Munson "fits the mold we want," adds Sugihara. "She came to us as a novice who wanted us to publish her and we saw her commercial value." CEO Richard Tam concurs. "The current industry perpetuates this myth that if a book is rejected by them then it must be because of quality. In fact, most of those books are rejected because of economics. They don't know how to publish a book if it only sells, say, 10,000 copies. Their current economic model doesn't work"

Literary agent Richard Curtis, who plans to launch a new retail Web site called E-Reads this spring, sees a huge gap that companies such as could potentially fill. "The 1,000- to 10,000-copy authors don't attract attention the way they used to. The smartest minds in the world just haven't been able to do it. [Print] publishers just cannot make a living publishing two books and taking one back."

Curtis is referring to the book industry's standard practice of accepting "returns." Booksellers order a number of copies of each title and are permitted to return them to the publisher for a full refund if the books don't sell. On-demand printing makes this costly and increasing untenable policy obsolete, and to literary idealists it promises a future in which no book ever need go out of print.

As large publishers catch on to on-demand publishing, they may save themselves a bundle of cash and many bushels of returns. "In the past publishers would have had to print thousands of copies to make it economically justifiable," says Random House chief spokesman Stuart Applebaum.

(With conventional book printing and binding methods, the cost of an individual book goes down as the total number of copies printed goes up. As a result, to price single copies reasonably, publishers need to order a substantial "print run.") "Now they can print hundreds of copies and drop-ship. So suddenly everything's in good shape."

But for all their Utopian promise, publishers who offer print-on-demand books aren't really publishing electronic books; iUniverse titles are only available on paper, even if the ink is barely dry. Real e-books like "Riding the Bullet" present their own set of problems, as's remarks about the "comfort and convenience" of printing out e-matter suggests.

"Riding the Bullet" is only available in a format that prevents it from being printed out, so King fans have had to read the novella on their PCs, their Palm Pilots or other PDAs or an "electronic reader" like NuvoMedia's Rocket eBook or the SoftBook Reader. Readers are notoriously and vocally resistant to reading long documents on a screen, so it's no coincidence that the big crossover eBook of 2000 was a story that, if printed as a paperback book, would only be 66 pages long.

It's hard to imagine anyone reading all 1,153 pages of King's magnum opus, "The Stand," on a PC or laptop -- let along printing the thing out on a laser printer and hauling all those loose pages around. "The platforms need to be resolved for these books to have popularity," says Michael J. Wolf, the managing partner in charge of Booz, Allen & Hamilton's media and entertainment consultancy group and author of "The Entertainment Economy: How Mega-Media Companies Are Transforming Our Lives."

Until manufacturers solve the tricky problem of providing readers with a comfortable and convenient device for reading e-books, shorter works will probably dominate the fledgling e-book market. In that case, has a head start and is aggressively pursuing a niche that once belonged to magazines. In an era when writers often feel that magazines won't accommodate in-depth articles and essays, a publisher like provides an attractive alternative.

For fiction writers, it may even appear to be a godsend. A master of the long short story such as Alice Munro or a novelist like Arundhati Roy, who recently penned essays protesting the Indian government's dam and irrigation projects and its testing of nuclear arms, could well find a suitable publisher in a company like "For an author of short stories, I may ask myself why I should bother with a magazine," says Chuck Verrill. "And why should I be buried in ads?"

Of course, many established writers (some of whom don't even have e-mail) find new technologies as bewildering and daunting as do their most timid readers. Electronic publishers seeking to woo name writers away from the cozy and prestigious medium of paper and cardboard may find the talent more resistant than anyone else. Stephen King is the first of them to venture into this new territory, but in terms of marquee literary attractions, the trail is still being blazed. Still, there are those fat royalties beckoning. "It's going to be years until electronic books have the wide approval to be able to replace paper books," says Wolf. "But it does provide the specter of an author saying, 'Well, I'll do it myself.'"

By Craig Offman

Craig Offman is the New York correspondent for Salon Books.

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