f the most intriguing authors of 2012 are E.L. James and Hugh Howey, for good reason. As you likely already
know, James is the author o f the phenomenally popular
Fifty Shades of Grey trilogy. All
three books in the series were published in 2011 by a print on demand company
Word of mouth boosted ebooks sales to 250,000, while the trade paperback copy lagged
behind at about 7,000. When one o f the big six
publishers, Random House/Vintage came along and offered Ms. James and her agent
a contract, the stipulation was that Vintage also keep all ebook rights or
there would be no deal. Needless to say, they went for it.
According to a fascinating blog by Steven Pressfield, although Ms. James has made a great deal of money from her books, she likely would have made millions more if she’d turned the contract down and kept her rights. He estimates that the publisher made $72 million from paperback sales alone, which was why Random House gave each employees a $5,000 bonus this year. Pressfield goes into a number of calculations to prove his point, which you can find in the link below.
Now, here’s the really interesting bit. Simon & Schuster also bid on the Grey trilogy and lost. Pressfield says they too did the math on paperback profits, so when another opportunity arose they changed tactics. S & S offered a contract to Hugh Howey, author of a popular series called Wool, (which had already sold 300,000 ebooks before the offer) and allowed them to keep the ebook rights! As Pressfield says, the decision to publish Howey’s books in hard cover and trade paperback only is a game changer. It will be interesting to see if more deals like this occur in future. It appears that Howey could soon become a very rich man, if he isn't already.
I urge you to read the whole piece, as there plenty more good observations in there, at http://www.stevenpressfield.com/2012/12/the-story-behind-the-random-house-gives-5000-bonuses-story/