What Harry Potter e-books mean for Apple

Unless you were somehow locked into a Petrificus Totalus for most of the previous day, you've probably heard of J.K. Rowling's Pottermore, an online extension of the Harry Potter universe that will feature games, information about the series not previously released in the books, and more. Of course, the headliner for the October launch of Pottermore is the planned release of all seven Potter novels (finally!) as e-books.

Pottermore also deals a major blow to Apple, which will lose the right to sell the Harry Potter audiobooks when Pottermore launches, the Financial Times reports. Apple landed the exclusive deal with Rowling in 2005 to release the audiobooks on iTunes.

Apple did not release a statement in response to the Pottermore announcement, the Wall Street Journal stated.

While the books will be available for the iPhone and iPad, they won't be purchased through iBooks. Rowling said in her announcement that she did not want to be locked into a single digital format for her books. As such, the book will be DRM-free, an announcement that has a good many fans cheering, but is a kick in the teeth to companies such as Apple, Amazon and UK's Waterstone, which expressed its "disappointment" at not landing the books.

Despite the lost sales to Apple and other e-book storefronts, Pottermore will deliver the interactive experience that iPad-formatted books can (and do) achieve. Users can navigate through the story of the first Harry Potter book while discovering extra material from Rowling that never made it into the books.

Want to know the back history of Professor Minerva McGonagall? Pottermore's where you'll find it. When you get sorted into a house, you'll go to your own common room and learn information that's specific to the story role you've assumed. Want a different part of the story? Take on a different role. It's the marriage of text and interactivity that would be perfect for iBooks. If Apple had been able to woo Rowling to iBooks, it would have been the literary equivalent of landing the Beatles.

Rowling is pointedly eschewing all major e-book sellers while boosting the e-book market at the same time. Apple won't get its 30 percent cut of the millions of Harry Potter e-books that are guaranteed to sell. At the same time, neither will Amazon, Waterstone or anyone else beyond Rowling's print publishers Bloomsbury and Scholastic, which will get a share of the revenue, and Sony, which is a partner in the endeavor.

Furthermore, Rowling's smart business move to hold onto her digital-publishing rights could spread to other top-selling authors that are already mainstays in iBooks. While not all authors have the financial might that Rowling does, it could tempt other authors, such as Nora Roberts, Suzanne Collins, James Patterson and the estate of Stieg Larsson, to reconsider their digital-publishing options. All of these authors are members of Amazon's so-called Kindle Million Club, those who have sold a million or more e-books for the Kindle, and they bring in a hefty chunk of change for Apple as well.

If I could see anyone taking the Pottermore route next, it would be Nora Roberts. She's written more than 200 novels (including those published under the pseudonym J.D. Robb). She and her husband own Turn the Page, an independent bookstore in Boonsboro, Md., with two rooms filled with her books and merchandise based on her works. I can easily see her brokering some deal that keeps her print publishers, which include The Penguin Group, satisfied while retaining more control over her work and not forking over money to companies, such as Apple and Amazon, just for the privilege to sell through their online stores.

Roberts, like most other bestselling authors, has her books released under the agency model where the publisher establishes the price and was largely adopted thanks to the iPad. The agency model caused bestselling e-books to rise to between $13-15 rather than the $9.99 many e-book users have come to expect. The cost of an e-book version of a mass-market paperback novel is roughly the same as the print edition, which makes e-book fans fume.

Harry Potter e-book prices haven't been revealed, but it'll be interesting to see what Rowling charges. If she can undercut the agency model while retaining a larger share of the profits, it'll make the temptation to go it alone even bigger to bestselling authors. Or, even if she retains standard e-book pricing, the draw of having a DRM-free library accessible to any e-book reader is still attractive, as well as finally having a legal set of Harry Potter e-books.

We're going to have to wait and see what Pottermore does before we can see any lasting impact on Apple. Of course, the loss of the audiobooks is a substantial blow; they are still making the bestselling audiobook charts on iTunes with "Harry Potter and the Philosopher's Stone" ("Sorcerer's Stone" for us Yanks) coming in at #10 in the UK store and #18 in the US store.

There's no question that Pottermore will succeed. Avid Potter fans, myself included, won't care where the books are purchased from -- as long as they're finally available legally, in a format that's going to work for the growing plethora of e-book readers.