A scene from the Hogwarts Express on Pottermore.

The problem with looking to J.K. Rowling for inspiration about how to transition a book franchise into the digital era is that no author can really be compared to J.K. Rowling.

“She’s kind of like the Oprah of children’s books,” said Lorraine Shanley, co-founder of Market Partners International, which consults on digital books.

“I mean, she’s the Beatles,” said Mike Shatzkin, CEO of the Idea Logical Company, another book futurist.

“Everything about J.K. Rowling is unique to J.K. Rowling,” affirmed Kyle Good, a publicist for Scholastic, which publishes the Harry Potter series in America.

So when J.K. Rowling announced that she would bypass retailers and exclusively sell the digital editions of the books herself, luring customers into her online bookshop by creating an elaborate online fantasmagoria called Pottermore, the prevailing sentiment in publishing—in sharp contrast to that of the reading public—was indifference.

“I think the important point about Pottermore is that this is not something we need to worry about lots and lots of people doing,” said Mr. Shatzkin.

“Think about all the money they must be spending to do this!” said Bob Stein, who founded the Institute for the Future of the Book. “It’s the franchise that permits it.”

Pottermore, for those who didn’t receive the owl, will be launched by J.K. Rowling in October, with a beta version for a select million die-hards being tested over the next few weeks. The site will be the sole retail outlet from which readers can purchase digital versions of the Harry Potter books, which have previously been available in digital format only as illegal bootlegs. To encourage her readers/customers to forego the book store in favor of a specific shopping trip to Pottermore, Ms. Rowling and her business partner, Sony, have recreated key scenes of the first book as a digital “interactive environment” and initially included some 18,000 words of new writing that will provide greater detail and background about the world of Harry Potter (which, we might point out, is only about the length of three New Yorker stories). They also orchestrated an elaborate build-up that has whipped Harry Potter nerds into an anticipatory frenzy.

The first clues appeared on Harry Potter fan sites on June 15. They came in the form of geographical coordinates, posted at sites called Mugglenet, the Leaky Cauldron, Snitch Seeker and others. The coordinates, when entered into a site called Secret Street View, corresponded with 10 locations, including Salem, Mass., King’s Cross Station in London and New Orleans. Each street view page was superimposed with a letter, which, as the fans decoded, eventually spelled out “more Potter”—or, as it turned out, “Pottermore.” The fans freaked out—a new book!—but they were wrong: no new book, at least not now, just a web site called Pottermore, and what that was, nobody knew. An ad campaign posted online and broadcast in Times Square announced only that “the owls are gathering.” The animated owls—great horned, snowy, barn (screech? burrowing? spotted?)—turned out to be congregating on the branches of a special Pottermore channel on YouTube that had a countdown to an announcement scheduled for June 23.

On that day, Ms. Rowling appeared on the channel in a video to describe “an online reading experience unlike any other.” Seated on a leather couch in a softly lit room and speaking over tinkling piano music, Ms. Rowling thanked her fans for their undying love and then, as an exquisitely animated paper owl took flight from the pages of a Harry Potter book, she described the new site.

“Just as the experience of reading requires that the imaginations of author and reader work together to create the story, so Pottermore will be built in part by you, the reader,” said Ms. Rowling, in lulling tones. She announced that the site will include material that she’s “been hoarding for years” about the details of the wizarding world and be a place for users to post their own interpretations of Harry and his friends. Users will also interact with what the digital marketers are calling “key story moments.” In the storyline for Harry Potter and the Sorcerer’s Stone they will be assigned a house by the sorting hat, be able to mix potions and go shopping for their own wand and compete with their friends for a house cup by playing games (one of which appears from the previews to be plain old chess). Environments from the other books will follow, with Harry Potter and the Chamber of Secrets launching on the site in 2012. Visitors will also, of course and most importantly, be able to shop.

Rowling.

When it comes to converting the Harry Potter series for e-books, J.K. Rowling is relatively late to the game. She is a long-established advocate for print and paper, but Ms. Rowling said in a recent BBC interview that her leisurely pace in releasing the books in electronic form was less a symptom of committed atavism than a result of being too busy.

“One of the reasons I resisted doing e-books for so long was I couldn’t cope with anything else,” she told the BBC, adding that she had bought a Kindle a year ago. “The decision as to when to do it, how to do it, just seemed like one thing I could defer. I was more interested in writing the books.” (Presumably, the wild success of the books in print form tempered the urgency, as well.)

Traditional bookstores would thank her for not having rushed in, but now, with her empire complete, the movies all made and the generation that first read Harry Potter old enough to have children of their own, the time had come to find a way to make Harry Potter new again for young readers. Thanks to the era in which she signed her early books deals (the first one sold here in 1998), Ms. Rowling also retained the digital rights to her properties, a feat that would be difficult to accomplish today. And while a less savvy businesswoman might have dusted her hands of the matter and simply turned over e-book publishing to Scholastic, Ms. Rowling did not reach the point of selling 15 million books on a single day, with hundreds of millions of books over all, driving a movie franchise that has grossed $7.3 billion dollars worldwide, by being anything less than meticulous. She has said in the past, however, that if she had retained control of the movie rights she would have tried to avoid merchandising, so her website will not necessarily be an online emporium for Halloween costumes, butterbeer and quidditch brooms.

Even more surprisingly, Ms. Rowling did not turn her back on her publishers: Bloomsbury (in England), Scholastic (in America) and her other publishers will get a cut of the regional editions of her e-books. When asked why Ms. Rowling would not claim all e-book profits for herself, the representative for her American publisher framed it as a sort of altruistic act. “The author decided to acknowledge us for all of our contributions,” said Ms. Good.

But others contend that it wasn’t just that. According to Mike Shatzkin, contracts that preceded consciousness about digital rights tend to be ambiguous, but on the publishing side they usually contained a noncompete clause.

“An e-book would pretty clearly constitute competition for a print book,” said Mr. Shatzkin. While a legal precedent has yet to be established on the matter, one argument for why Ms. Rowling gave her publishers a cut of royalties might be that the noncompete cause would constitute legal grounds for her publishers to sue her. “There would have been the possibility of a nasty dispute if she had not done something that cut them in,” he said. Furthermore, he added, Ms. Rowling might want to write another print book (despite some hints to the contrary) and she would likely want to link any future projects with past ones by maintaining her relationship with her publishers.

“I don’t mean to suggest that it wasn’t generous, but it also wasn’t totally spontaneous,” he said.

As for other interactive book sites, Pottermore may be unique, and potentially inimitable, but it isn’t alone in its effort to engage readers in the virtual space—and thereby to sell books. Scholastic has produced an interactive book site called The 39 Clues, which augments a series of books with online games and collectible cards. Since its launch in 2008, it has been a major success, with more than 1.6 million registered users, more than 10 million copies of the accompanying books in print, foreign rights sold to 25 countries and film rights optioned to Dreamworks. The site has also banked on the services of big-name writers—David Baldacci and the bestselling children’s writer Gordon Korman will both be writing books for the series.

HarperCollins, for its part, has had success with an interactive book site for teenage girls called the Amanda Project. Like Pottermore, the site is an interactive environment accompanied by a book series, billing itself as “the first collaborative, interactive fiction series for girls aged 13 and up.” Unlike Pottermore, users of the site insert themselves as characters in the mystery of Amanda Valentino, a mysterious new arrival at a school who then goes missing. Some of these user-generated characters are then picked up by the series’ writers and inserted into the actual books. Also unlike Pottermore, the Amanda Project is not an online bookstore—to actually buy the books, users click out through a long list of participating bookstores.

While users of Pottermore will be able to upload “their comments, thoughts and artwork,” the site will not be a forum for fan fiction, a place to chat with friends or social network or a crowd-sourced literary experiment.

“The best way to think of Pottermore is as an interactive, illustrated companion to the books,” read a post on the official Pottermore blog, making fans “able to experience Harry’s story in a new way and discover all the additional information that J.K. Rowling has written.” And while few book futurists think that J.K. Rowling is indicative of a trend, the Institute for the Future of the Book’s Bob Stein did have one concern:

“What I get scared about is that the only thing any major publisher will want to do is swing to the fences so they can make a Harry Potter-type franchise and generate the kind of profits that Harry Potter did that enabled them to create something like Pottermore,” he said.

ewitt@observer.com

Mr. Kirshbaum is a veteran of New York publishing with 40 years of industry experience, including 10 years as CEO of Time Warner Books (now the Hachette Book Group). Under his watch, Time Warner and its imprints published everything from David Baldacci to David Foster Wallace. In 2005, he started an agency, LJK Literary Management. His return to head Amazon Publishing is a clear sign that New York publishing houses will now be competing against one of their biggest retailers to sign up writers.

"Larry Kirshbaum is a highly admired ... figure in the publishing world," said Peter Osnos, the founder and editor-at-large of Public Affairs. "The fact that he is back in the mix as a publisher is the kind of thing that would catch everybody's attention"

Catch everyone's attention it has, but it has also, for the first time, aroused fear that New York publishing might be facing a full-scale invasion from Seattle.

"What essentially happened is you had six players sitting at the table playing poker, then a seventh player who has more money than the others combined, sat down at the table, and the price of playing poker just went up," said Mike Shatzkin, CEO of the Idea Logical Company, which advises publishers on digital books. "I think it means that the agents are all celebrating and the big publishers are all crying in their beer."

When Amazon began its foray into publishing, it was initially in areas in which it would not compete with the big six, such as self-publishing. Then, in 2009, the company launched AmazonEncore, described as "a new program whereby Amazon uses information such as customer reviews on Amazon websites to identify exceptional, overlooked books and authors that show potential for greater sales." That the imprint launched by republishing a self-published fantasy novel by a 16-year-old was reassuring to publishers. As long as Amazon was offering an encore only to writers whom publishers had turned down in the first place, there were no apparent conflicts.

But with the hiring of Mr. Kirshbaum, it's clear that Amazon will now be competing directly with the traditional houses. Amazon has already outbid its competitors in a number of high-profile auctions, although at least one writer was put off by an exclusivity clause written into Amazon's writers' contracts that stipulates their books will be available only in electronic form for the Kindle, which already has 67 percent of the e-reader market share. "This is a time when these customers are up for grabs," said Mr. Shatzkin. "Amazon has been very conscious of that. They try very hard, if they sell you your device, to keep the business." For instance, any Amazon-published books would be locked out of the Nook, Barnes & Noble's e-reader, which has more than 20 percent of the market share and is Kindle's only real competitor. In other words, if your favorite authors sign with Amazon, the only way you can read their books is on a Kindle.

But whether they are merely trying to eliminate the competition in the reader market, or in the publishing market as well, is not yet clear. To many, it seems the e-commerce giant has both goals in mind.

One agent was pointed about what he thinks is a bait and switch on Amazon's part. "It occurs to me," he said, "that what they have traditionally done is lower the costs of what they're selling so that when it comes to pricing nobody can compete, and then when the competition is weakened or eradicated they can then raise their retail prices, or use the site to sell other nonbook products. Doesn't it seem highly likely that what they may now be doing--and preparing to do--is raise the costs of what is being paid, for advances, and then when the competition, i.e., publishers, are weakened or eradicated Amazon can then behave how ever they want?"

Another person, who was approached by Amazon for hiring advice, had an objection that, though small, perhaps laid bare most plainly the cultural differences between old publishing and Amazon. "They never picked up the tab," he grumbled.

ewitt@observer.com

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