First position: 'Fifty Shades' is publishing story of 2012

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FILE- This file combo made of book cover images provided by Vintage Books shows the "Fifty Shades of Grey" trilogy by best-selling author E L James. EL James' erotic trilogy was easily the year's biggest hit, selling more than 35 million copies in the U.S. alone and topping bestseller lists for months. Rival publishers hurried to sign up similar books and debates started over who should star in the planned film version. Through James' books and how she wrote them, the general public was educated in the worlds of romance/erotica, start-up publishing and "fan fiction." (AP Photo/Vintage Books, File)

NEW YORK, N.Y. - The story of 2012 in publishing was the story of "Fifty Shades of Grey," in more ways than one.

E L James' erotic trilogy was easily the year's biggest hit, selling more than 35 million copies in the U.S. alone and topping bestseller lists for months. Rival publishers hurried to sign up similar books and debates started over who should star in the planned film version. Through James' books and how she wrote them, the general public was educated in the worlds of romance/erotica, start-up publishing and "fan fiction."

But the success of James' novels also captured the dual state of the book market — the advance of e-books and the resilience of paper. In a year when print was labeled as endangered and established publishers referred to as "legacy" companies, defined and beholden to the past, the allure remained for buying and reading bound books.

James already was an underground hit before signing in early 2012 with Vintage Books, a paperback imprint of Random House Inc., the house of Norman Mailer and Toni Morrison, a house where legacy is inseparable from the brand. She could have self-published her work through Amazon.com, or released her books from her own website, and received a far higher percentage of royalties.

"We had a very clear conversation back in January about the need for a very specific publishing strategy," says Vintage publisher Anne Messitte. "We talked about distribution, a physical format, publicity. And she was basically clear that she needed what we did as publishers to make that happen."

"Fifty Shades" began as an e-phenomenon, understandable since digital erotica means you can read it in public without fear of discovery. But according to Messitte, sales for the paperbacks quickly caught up to those for e-books and have surpassed them comfortably for the last several months. Everyone was in on the secret. The series sold big at Amazon.com, but also at Barnes & Noble and independents, at drugstores and airports.

Publishers from several major houses agreed that e-books comprise 25-30 per cent of overall sales, exponentially higher than a few years ago, but not nearly enough to erase the power of paper. And the rate of growth is levelling off, inevitable as a new format matures. Simon & Schuster CEO Carolyn Reidy said e-sales were up around 30 per cent this year, less than half what she had expected.

"We saw all these huge sales for tablets and huge sales for other machines coming out and assumed there would be a lot of new e-book readers," Reidy says. "But in retrospect there were a lot of current e-book readers who were upgrading their machines. And tablet owners do not use e-books as much as those with dedicated e-book readers" such as Amazon's Kindle.

"There are some people who think that print will go away, but 'Fifty Shades' is an indication of why that's not going to happen," says Messitte, who added that the books attracted many non-readers who don't own e-devices. "You're going to need a mix of ways to read."

The rise of e-books has shaken, but not broken the way books are published and sold. Membership in the independent stores' trade group, the American Booksellers Association, has increased three years in a row after decades of decline. Amazon is a draw for many self-published authors, but its efforts at acquiring and editing books — "legacy" publishing — have been mixed.

An in-house imprint, headed by former Time Warner Book Group chief Laurence J. Kirshbaum, has so far landed few works of note beyond a memoir by Penny Marshall and an advice book on cooking by lifestyle guru Timothy Ferriss. Rival sellers have refused to stock Amazon's books, limiting their sales potential. And if publishers suffer from their reputation — often earned — of being slow to adapt to technology, they benefit from a reputation — often earned — for being nice to their writers.

"There certainly is the comfort factor, and part of that comfort factor is the culture of old publishing, which is very collegial and warm and friendly," says Richard Curtis, a literary agent who represents several writers publishing with Amazon. "Authors contemplating Amazon are concerned about a loss of that warmth."

Amazon, the acknowledged leader in e-book commerce, remains the dominant player in what could still become the dominant format, and two of the year's major stories would never have happened without industry concern over the Internet retailer and publisher.

In April, the U.S. Department of Justice sued Apple and five publishers for alleged price fixing of electronic books, a lawsuit originating from Apple's 2010 launch of the iPad and iBookstore, which publishers hoped would weaken Amazon's ability to discount works so deeply that no other seller could compete. In October, the corporate parents of Random House Inc. and Penguin Group (USA) announced a planned merger, widely believed as a way to counter Amazon.

One of the publishers sued, HarperCollins, settled in the fall and prices for such new works as Michael Chabon's "Telegraph Avenue" dropped from $12.99-$14.99, common under the Apple model, to Amazon's preferred $9.99. But Chantal Restivo-Alessi, HarperCollins' chief digital officer, said there was no noticeable difference in sales, adding that bargain hunters tend to seek out older books.

"With new books, if you want to read that book, you're going to read that book," she said. "You're not going to replace it with a cheaper book."