Author Of Her Own Destiny

The solitary bookcase in Jane Friedman's SoHo office is half empty. Her home library has 10,000 volumes, she says, but after a 40-year publishing career that saw her rise from being a Dictaphone typist at Random House to chief executive of HarperCollins, she rarely picks up a hardback nowadays.

Three years after her abrupt exit from Rupert Murdoch's books division, Ms Friedman now reads on an Amazon Kindle. It is one of many changes since setting up Open Road Integrated Media in 2009 to crack the challenging market created by the Kindle and rival e-reading devices, such as Barnes & Noble's Nook and the Sony Reader, and Apple's iPad.

At the helm of HarperCollins, Ms Friedman oversaw a staff of 3,000, from New York to New Delhi. Now her employees number about 25 and she is not ready to disclose her start-up's revenues and targets.

She has traded the trappings of corporate life for a space in a building of small design studios, with little decoration but for some orchids and a poster of Elvis reading. ("The book is upside down," she notes, with glee.)

"I am very happy not to be in the corner office of one of the major legacy publishers," Ms Friedman says. She sees publishing houses as hurrying to acquire the "very different skills" needed as e-reading devices costing less than $100 make ebooks mainstream, but being held back by their traditional business models.

At HarperCollins, Ms Friedman watched Barnes & Noble, Oprah Winfrey and Amazon change the books industry, but she viewed ebooks as one more interesting and new revenue stream rather than a secular change. "I didn't realise the model of publishing was broken."

Such comments irk some former peers, who question what impact a start-up can have against established divisions of well-resourced media groups, which now include digital rights in new contracts as a matter of course and are building their digital revenues. Such groups include Penguin, which, like the Financial Times, is owned by Pearson, HarperCollins, owned by News Corp, and Random House, part of Bertelsmann.

"There are people who for 40 years have been my friends and now, I wouldn't say they're my enemies, I'd say they're my frenemies," she explains, adding that she is not going head-on against large publishers.

Since her early days at Knopf (part of Random House) working with authors such as John Updike, Joseph Heller and Michael Crichton, Ms Friedman competed for "frontlist" – new – titles from the big authors of the day. Now, she emphasises, chasing bestsellers is not Open Road's business.

Instead, it operates in three main areas: reviving old "backlist" titles from authors who never thought about digital rights; publishing a few new, digital-only works – "e-riginals"; and distributing electronic titles for independent publishers that lack resources to do so themselves.

Its model requires authors to share digitisation costs, but Ms Friedman says these are typically less than $500, "so the author's in the money after under 100 downloads". In its partnerships, Open Road and the publisher share royalty costs. For e-riginals, authors must share the costs of editing and publicity, but also split profits 50-50, which is more than in traditional publishing. The offer of a new book is "a little irresistible" even in a backlist-focused business, Ms Friedman admits, "but not irresistible enough for me to pay an advance".

Open Road has amassed old titles from authors including Pat Conroy, Iris Murdoch, William Styron and Alice Walker; claimed a top-30 Kindle hit with a new novel, Mary Glickman's Home in the Morning; and shared in the viral success of Go the Fuck to Sleep, a profanity-filled bedtime book for frazzled parents.

On top of these efforts is a multimedia marketing effort, producing short documentaries about authors with which Open Road seeds social media sites and blogs to build buzz. "We'll see how I handle this," she says, reaching for a laptop to demonstrate the digital platform through which Open Road pushes content to anywhere from Twitter to Barnes & Noble blogs.

In ebooks, the big marketing prize is prominence in Amazon's Kindle store. Ms Friedman met Jeff Bezos, Amazon's founder, when he had just six employees. She was "enamoured" by his vision and enthusiasm, but did not think much of the brand, she recalls.

Now Amazon is the book industry's biggest retailer, and is penetrating deeper into publishers' markets. It has hired literary agent Laurence Kirchbaum to build an imprint with splashy signings such as Tim Ferriss, the self-help author of The 4-Hour Workweek, acquired full rights to 450 children's books from Marshall Cavendish, and seen two Kindle titles reach its list of 2011's 10 bestsellers.

"There's a fear factor and an anger factor" about Amazon among publishers, but the etailer is "a great pal of ours", Ms Friedman claims, adding that Open Road "doesn't have the legacy relationship with them where every single move is part of the overall chess match".

She doubts technology companies will make big inroads into publishing: "One of the reasons that publishers never made a lot of money is that it's an art form rather than a science."

Ms Friedman launched Open Road with $3m from Jim Kohlberg of Kohlberg Ventures, to whom she was introduced after leaving HarperCollins. From the day she left she stayed busy, she says, taking consulting projects, talking to friends in start-ups and going to parties – all in aid of getting her venture off the ground.

Mr Kohlberg has since put in another $4m, then participated in an $8m financing led by Azure Capital to bring Open Road's funding to $15m.

Questions about who owns digital rights have been a source of bitter dispute between authors, agents and publishers, and traditional publishers question how big an unexploited market Open Road can find.

One publisher talks about the uninspiring task of "going around finding cracks in contract files", but Ms Friedman says she is always finding catalogues where digital rights remain up for grabs. She says forcefully: "These are authors who shouldn't have been forgotten."

She adds that switching to a three-strong start-up in a spare room was "wonderful, not terrible", because it gave her more contact with authors.

Now 66, Ms Friedman still reads print books to her little granddaughter, but "she presses them, she wants them to move" as though the words and images were on an iPad screen.

"I don't think anything will replace the smell of a new book, the binding, the feel of the paper, but that's my generation," she says. "I don't know if [my granddaughter] and your children will miss that if they don't have it."

More News From Financial Times