Harry Potter and the amazing exploding book industry

Despite the obvious demand, Harry Potter author J.K. Rowling has adamantly refused to offer electronic versions of her phenomenally popular series for young adults — until now. As part of Thursday’s launch of an interactive website called Pottermore, the billionaire writer also announced that e-book versions of the novels will be available directly through the site for all major platforms. In one fell swoop, Rowling has cut both her publishers and booksellers such as Amazon (s amzn) out of the picture. Not everyone has that kind of power, of course, but Rowling’s move shows how the playing field in publishing continues to be disrupted.

The author said the Pottermore site will offer extra content that she has written about the characters in the books, which have sold an estimated 450 million copies and made her one of the most successful authors of all time. There will also be a social network of sorts built into the site that allows readers to connect with each other, play games and share their thoughts about the novels and their characters. Rowling said the site will launch in beta at the end of July for a small group of users, and their feedback will be used to develop the full version that will launch in October.

When it comes to e-books, Rowling admitted she has been skeptical of the idea in the past, but said she downloaded one earlier this year and enjoyed it, and eventually realized “e-books are here to stay.” The author has been notorious for her refusal to allow electronic versions of the books, in part because of fears that the books would be pirated (which they have been anyway, of course).

At one point last year, after reports that she was considering offering electronic editions, there was speculation that Rowling would sell the e-book rights to a publisher for as much as $200 million. But the author decided to keep those rights and sell the books herself directly to readers — something that no doubt disappointed a lot of publishers, including her own U.S. and British agents — and somewhat surprisingly (given her apparent fear about piracy) the e-books will have no DRM built in, although they will have “digital watermarking” that gives each copy a unique ID.

Not every author has the ability to cut deals like the one Rowling has, of course. For one thing, many authors do not retain the electronic publishing rights to their works, which the Harry Potter author did — possibly because e-book rights weren’t considered that valuable when she originally negotiated her contracts (Rowling will apparently be paying some of the e-book proceeds to her existing publishers, but how much is not clear).

The ability to publish and sell directly to readers, however, is far from unique — as we have written about a number of times here at GigaOM. Amanda Hocking is the most obvious example of what can happen when even an “undiscovered” author decides to do direct: after making an estimated $2 million or so in less than a year by selling her own e-books via the Kindle publishing platform, Hocking was signed to a $2-million publishing deal. Some other authors, meanwhile, have gone in the opposite direction, turning down traditional publishing deals in order to sell direct to their readers.

J.K. Rowling may have only just discovered the virtues of e-books, and the benefits of selling directly to readers, but there is a whole generation of young authors who are looking to Amanda Hocking and other authors like million-selling writer John Locke as models for a new way of publishing — and the shockwaves of that disruption are only just beginning to be felt in the traditional publishing industry.

Post and thumbnail photos courtesy of Flickr users Mike Licht and timetrax23