Harry Potter And The Great Sideloading Gamble. A ‘Dark Day’ For Publishers?

A milestone today in the world of publishing, as Pottermore.com, the site dedicated to all digital things Harry Potter, opened for business as the exclusive distributor of Harry Potter e-books and audiobooks. This marks the first time that a major author has ventured forth to offer e-books directly to the public, bypassing publishers’ sites and online bookstores in the process, to allow readers to buy the content direct and then sideload it to their reading platform of choice.

And such is the weight of Harry Potter that Pottermore even got some (but not all) of the biggest book portals, Amazon and Barnes & Noble, to agree to link to Pottermore in affiliate marketing arrangements, rather than routing sales through their own systems (Amazon explains how this works; B&N just links directly through).

No small feat, but is this a sign of how e-books — and perhaps other content like apps — might be more widely sold in the future?

Mark Coker, the CEO of Smashwords, calls today’s launch a “watershed” moment for the world of publishing because it shows how the balance of power is shifting from traditional distributors to the authors themselves. “This is a dark day, because now all big-name authors — the bread and butter of traditional publishers — are going to think twice before giving up their digital rights,” he says.

No terms have been revealed for sales of e-books or audiobooks on the site, but Coker estimates that Rowling is getting between 70-90 percent of the listed price, compared to the 12.5-17.5 percent a publisher would pass on to the author. “Clearly traditional publishers cannot compete,” he says. “Authors are in control now, and they’re beginning to flex their muscle.”

Yet even if this is what authors might like to implement, it may not come to pass so quickly. For one, retailers, Coker predicts, are not likely to start bending the way they have done with Pottermore.”It’s basically transforming them into the equivalent of affiliate marketers and causes them to lose some control over customer experience,” he says.

Another issue is the fact that publishers, and authors, need to take more control of the customer experience, a new area for them. That’s something that Pottermore is only partly getting right, notes one observer:

“I think the actual user flow when you buy is pretty good, if you already know what you’re doing,” says Benedict Evans, an analyst with Enders Analysis in London, says of the site. “But their description of what they’re selling, to someone new to e-books, is really very poor. Try to work out from the site if it will work on the iPad, for example.”

That is a crucial point, because it may be that a series like Harry Potter is just be the kind to bring a new class of readers to the e-reading platform.

At Pottermore, the first three e-books are being sold for $7.99 (£4.99) and the next four are going for $9.99 (£6.99), or $57.54 (£38.64) for the full set.

But there are some odd idiosyncrasies: if you are in the U.S. and choose the “GB” English version of the books, pricing for the first three appears a bit cheaper ($7.92); the later four and complete set cost more ($11.10; $61.34). However, even though it shows pricing, you cannot at this point buy those editions because they are outside your region.

Third of all is the fact that the majority of authors are not in the same league as J.K. Rowling when it comes to selling books. “This will work for J.K. Rowling, because she’s J.K. Rowling,” says Coker. He may be biased, as a bookseller himself, to claim that she could make even more money by using the existing e-book supply chain, but he concedes that “she will still be enormously successful under her current plan.”

But that may not extend to others, even if they wanted to do it. “How many hundreds of thousands, or millions of dollars is JKR investing to pull this off?  I don’t know the answer, but it’s probably a number so high it would discourage your average run-of-the-mill New York Times best-selling author from trying to pull off the same,” he adds.

The Pottermore site seems to have held up today just fine, from most accounts. We have contacted the site to see if it can provide some early sales and traffic figures.