Thar's Gold in Them Thar Strategies! Writers Sidestep Traditional Publishing

Whether 2010 will be remembered as the Year of the E-Book, the Year of the iPad (AAPL), or the Year of the Beginning of the End, what's clear is that it's a year of disruption for publishing. Just look at sales statistics for January released by the Association of American Publishers, showing that e-book sales climbed to $31.8 million -- a 261% increase from the previous month, and less than half the total sales recorded for adult hardcovers, which dropped more than 8% over December.

Today's exponential e-book growth can't stay that way forever, but the gold-rush mentality, combined with trade publishers' celebrating when annual earnings in the midst of economic downturns stay flat, has led several established writers to try nontraditional methods of publishing. In doing so, some have significantly fattened their bank accounts.

Making a Mint From the E-Backlist

One pioneer in weaving gold from e-book sales is J.A. Konrath, a crime and horror novelist who for the past year has kept his blog readers apprised of his efforts to make his back catalog available. The blog, A Newbie's Guide to Publishing, documents Konrath's efforts to distribute his unpublished novels, novellas, short stories, and humor as Kindle e-books for very low prices, usually $1.99 each.

Konrath this month delivered his verdict: As of March 4, he'd sold 29,224 e-books in a year. At the 35% royalty rate Amazon (AMZN) offered authors who published their works expressly for Kindle, that meant Konrath earned some $120 a day, every day, by doing almost nothing. "If this trend continues as is," he wrote on A Newbie's Guide, "I'll earn $43,800 this year on previously published short stories and novels that NY print publishing rejected."

But Konrath doesn't expect stability -- he expects e-book sales to explode. And so far, he's right. He has no doubt that "by the end of the year, I'll be making 5k per month on Kindle. And that's probably a low estimate."

Word of Mouth Has Taken Over

How did this happen? Konrath built up name recognition through six mystery novels he published with Walt Disney (DIS) division Hyperion, and one thriller under the name Jack Kilborn with LaGardere Groupe's (LGDDY) Grand Central. And he's been an aggressive self-promoter. But he doesn't do much to plug his Kindle books: Beyond giving them good product descriptions (i.e., rich metadata) and eyecatching covers, and making a new low-priced e-book available every month, word of mouth has taken over.

Whatever "magical elixir" Konrath may have found for healthy direct-to-customer e-book sales can't be bottled. It works for him, and he'll tell everyone how it worked, but there's no way to break out exactly why he's been so successful. Price, however, seems to have a lot to do with it. As of March 10, Konrath's e-book The List has sold 10,970 copies on Amazon at $1.99 each, earning him $7,679. By contrast, the e-book edition of his most recent Hyperion title, Fuzzy Navel, has sold 273 Kindle copies, earning the author $613.

Will Konrath say goodbye to traditional publishers in another year because he's earning so much from his budget-priced Kindle books? Probably not: He's signed several contracts with Hyperion and Grand Central. But it looks as if he's creating a template for how to make a decent living off digital books -- one that's already espoused by fellow genre writers.

Unorthodox Methods for the Traditionally Published Writer

Liza Featherstone had published her first nonfiction title with Simon & Schuster (CBS) imprint Scribner. But when her editor Colin Robinson left and started a new publishing company -- OR Books, which prints books on demand and offers e-book editions on its website while bypassing Amazon and Barnes & Noble (BKS), Featherstone decided to follow him. Her next book, on consumerism and politics, will be published this fall. "Nobody is getting very good advances from major publishers unless they're famous," Featherstone told Crain's Business New York. "And it's actually very exciting to be part of something new."

John Edgar Wideman, a two-time PEN/Faulkner Award winner and a National Book Finalist, raised a few eyebrows with his choice for his next book's publisher. Rather than stay with Houghton Mifflin Harcourt, which published his 2008 novel Fanon, or moving laterally to another traditional publishing house, he's publishing his new Briefs: Stories for the Palm of the Mind with Lulu.com. He's the inaugural client for Lulu's VIP services, which promises a more rigorous publishing experience (at an undisclosed price) in exchange for the author's getting a larger cut of royalties and profits.

"I've been thinking about this for a long time," Wideman said in his announcement. "Lulu seems to represent a very live possibility as the publishing industry mutates. I like the idea of being in charge. I have more control over what happens to my book. And I have more control over whom I reach."

Readers may not necessarily find on-demand or self-published books in the usual retail channels. One independent bookstore willing to stock them -- for a fee -- is Colorado's Boulder Bookstore, which takes a cue from the superstores by charging co-op fees according to a tiered structure. Stocking the title costs $25, featuring a book in the "Recommended" section for two weeks runs $75, and hosting a reading and signing event costs $255.

Looking to the Future

To the surprise of head buyer Arsen Kashkashian, most authors sign up for Boulder Bookstore's priciest package. "'They say, 'I want the marketing, I want the exposure. I worked so hard on this project, and you guys are the only ones who could help me with it,'" Kashkashian told NiemanJournalismLab. Even local authors published by traditional houses are using the fee-based co-op service -- not content to trust their publisher to do the marketing and promotional work.

Practically speaking, these strategies amount to authors making choices about how to publish their books. But author Stephen Covey has also bypassed Simon & Schuster and went directly to Amazon (with the help of e-distributor Rosetta Books) to sell digital editions of his books. And established genre veterans like horror writer F. Paul Wilson make old backlist titles available exclusively for the Kindle. Taken together, all these individual cases add up to a more systematic -- and lucrative -- strategy about when to shift from the norms of traditional publishing.