Six book publishing lessons from Open Road Media’s first three years

When the former HarperCollins CEO Jane Friedman cofounded Open Road Media in 2009, the publisher was one of the first of its kind: The idea was that it would mine the backlist for books that had never been available as ebooks, snap up the digital rights and publish the ebooks for the first time, thus introducing authors like William Styron and Alice Walker to new audiences.

Nearly four years and 3,000 titles later (with an additional 1,000 titles under contract), the company is still focused around acquiring and marketing backlist titles. Open Road has raised $15 million so far, from Kohlberg Ventures, Golden Seeds and Azure. (The company would not disclose revenues or whether it is profitable.) It still does not pay advances and still splits revenues 50-50 (after recouping some digitization costs) with authors, but it has also expanded its focus. It is publishing print books, expanding to new verticals like romance and the Vietnam War, signing up a limited number of original manuscripts, and handling digital distribution and marketing for both U.S. and international publishers.

These changes reflect Open Road’s adaptability to a changing market, but are also evidence of the fact that, in 2013, it faces more competition from other publishers than it did four years ago. The backlist — which covers books that have been out for a least a year and that in some cases are decades old — is estimated to make up around 40 percent of the trade book market, and many publishers are seeking to mine those rights. HarperCollins is currently suing Open Road over the digital rights to Jean Craighead George’s Julie of the Wolves; the case hasn’t yet gone to trial. Amazon (s AMZN) has bought up the backlists of several small publishers and plans to release those titles as ebooks for the first time.

Arthur Klebanoff is the CEO of RosettaBooks, which led the way in 2001 as a company focused on marketing the backlist in digital formats. Rosetta and Open Road are often described as competitors, and they are, but, Klebanoff noted, “I think any ebook-only publisher really has to say its primary competition is each of the print publishers of any size. Those print publishers, for the better part of 10 years, have been trying to license back the digital rights to everything in their backlist.” One reason they don’t always succeed — allowing publishers like Rosetta and Open Road to get the rights instead — is that they almost always still only offer a 25 percent royalty (rather than a cut of the sales) and they are more focused on new titles than on the backlist.

In those areas and others, Open Road hopes to stay ahead. Here are some of the things it’s doing.

Open Road Jane FriedmanAlways be marketing

Open Road has always been centered around marketing. The company has over 40 in-house employees, and more than half hold marketing roles.

Open Road describes its marketing strategy — a combination of publicity, promotion, online merchandising and social media — as proprietary technology. Chief marketing officer Rachel Chou told me that it is a custom-built software platform that lets “all parts of the company look at the same material at the same time” and integrates product management, asset management and campaign management into one system — whereas at a traditional publisher, editorial departments and marketing departments might all work on different platforms for the same book.

Open Road develops a marketing plan for each book, each quarter. If a particular campaign doesn’t work, Open Road tries a different one. That separates it from traditional publishers, which have to “cut their losses” a few months after a book hits the market, cofounder and CEO Friedman said. She tells agents and authors that “the first quarter means nothing…if in that first quarter a significant milestone related to that title hasn’t happened, then it’s the second quarter where it might happen, and where everything starts to grow. We’re selling more of our authors’ works year-in and year-out.”

Forget selling direct…at least for now

Conventional wisdom says that publishers have to start selling books directly to customers. Open Road disagrees. “We’re not going to have a storefront,” Friedman said. Instead, the company relies on retailers to sell its books, and offers them campaign ideas for promotions.

“I have always been very supportive of the retailer,” Friedman said. “The retailers are doing a very good job, and I don’t think we can do better.”

One caveat is that Open Road wants to run special sales involving promotional codes — to give a reader 10 percent off a title, for instance. Friedman said that with the exception of Sony, the retailers don’t support these yet, and so Open Road might run a limited number of promotions itself in the future.

Open Road authorsVideo doesn’t mean book trailers

Video is a key component of Open Road’s marketing initiatives. Luke Parker Bowles, the executive director of production, oversees creation of video content and describes video as Open Road’s “special sauce” — but said the videos shouldn’t be confused with book trailers. “The author is the brand. The title is not the brand.” Open Road aims to sit down and film video with each of its authors, or with the estate or family members if an author has died. The company has a chief researcher, Galen Glaze, who spends every day doing research to find out new things to ask the company’s authors.

The unique content is key because Open Road doesn’t consider its own site a destination for video content. Rather, the company pushes the content out to sites like the Huffington Post, Daily Beast and Fox News. A click-to-buy button appears at the end of each video so that users can buy either a single book or a number of books from different authors on one theme, and Open Road tracks how the videos convert to sales.

Change it up

At the beginning, Open Road was focused on literary fiction, but it has since expanded into genres like mystery, romance and science fiction — the areas that are “just exploding in e,” publisher Tina Pohlman said. The company is also publishing around 12 new titles a year. This fall, for instance, it will release The Salinger Contract by Adam Langer, who was previously published by Riverhead and Spiegel & Grau.

“Our acquiring of content has become more scientific, for lack of a better word,” Friedman said, because it is now purposely harnessing areas that are seeing the greatest digital growth.

Open Road StyronSometimes you need print…

While most of Open Road’s titles are still only available as ebooks, the company does make a sliver of its titles available through print-on-demand (90 titles so far) or through short traditional print runs (70 titles so far).

“There are certain books that really need to be in a physical bookstore,” Chou said at the Making Information Pay conference recently. “They deserve that table up front.” Open Road starts print runs at 500 copies, and the largest print run they have done is 15,000 copies. “If we’ve done a print run and we find that it’s really taking awhile to get through the inventory,” Chou said, “we can switch it back” to POD.

…and sometimes you just need to get lucky

One title that Open Road will be making available in print is a never-published, forty-year-old manuscript by the author Pearl Buck. Buck wrote The Eternal Wonder shortly before her death in 1973, and it remained unseen until a woman in Texas came across it in a storage locker that she found at auction. The woman got in touch with Pearl Buck’s son through the Pearl Buck International foundation, and he bought it from her for a small fee. He then got in touch with Open Road, which had published Buck’s other titles as ebooks. The company will publish The Eternal Wonder as an ebook and a paperback this October.

The discovery of The Eternal Wonder is a reminder that, even in a data-driven age, a publisher needs luck. So far, one of Open Road’s greatest assets has been timing. The fact that Friedman built her company before ebooks had really taken off helped it get its footing and get ahold of digital rights that big publishers hadn’t yet focused on. Nearly four years in, it can build from that base.

“The speed of what’s happened has been staggering,” Friedman said. “I think this isn’t about the Big Six at all. We’re living in a very exciting time for publishing, for independent publishing, for new kinds of publishing. This is the golden age…It’s not about the giants. It’s about the small guys.”

A previous version of this article referred to Open Road’s researcher as Galen Blaze. His name is Galen Glaze. I apologize for the error.

Photos by Rani Molla