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Call it the Fifty Shades effect. The hottest genre in the book world is self-published fan fiction -- original stories based on existing characters, typically traded online for free. Thanks to the steamy E.L. James trilogy, which began as Twilight fanfic before becoming a successful e-book and now a 20 million-selling worldwide sensation, publishers are racing to secure the next hot titles.



Berkley Books in July paid a "substantial seven-figure" sum to acquire Gabriel's Inferno, a Twilight fanfic novel by an anonymous author with the pen name Sylvain Reynard. Originally released on Twilighted.net, a fan site, a reworked version was published in April 2011 by Omnific, a small e-book publisher started by Twilighted founder Elizabeth Harper. (Early editions of Fifty Shades thanked "S.R. … for going first.") Inferno sold only 4,000 copies before Fifty Shades exploded in March. Sales jumped to 10,000 that month and 60,000 in July.

In June, Berkley issued 500,000 copies of Sylvia Day's Bared to You, a self-published erotic romance. On Aug. 7, Atria released 250,000 copies of Jamie McGuire's self- published hit Beautiful Disaster, less than a month after acquiring it in a two-book deal.

Fan fiction and self-published books accounted for half of The New York Times' top-25 list of best-selling e-books Aug. 5, with Smashwords, which provides an easy-to-use self-publishing platform, alone holding seven spots. Founder and CEO Mark Coker says Smashwords is "the farm leagues, where all the next major hits are going to come from." Robert Gottlieb, chairman of Trident Media, which has scored deals for several self-published clients, calls the trend the "reverse-engineering" of the book business.

Major publishers are jumping into the game. Judith Curr of Atria says her imprint is "uniquely positioned" as a gateway from self-publishing to traditional deals, touting the big label's marketing and retail infrastructure so "writers can focus on writing." St. Martin's (Trylle) and Vintage (Fifty Shades) also have been aggressive, and Hollywood isn't far behind, especially after Fifty Shades movie rights sold to Universal and Focus Features for $5 million in March. "This is the new place for content," says one literary manager.

Expect more such deals in the coming months. Two other Twilight fanfic hits from the Fifty Shades era -- The Office and Wide Awake -- remain unsold. In fact, many fans consider Office the greatest Twilight fanfic ever, but its author, "tby789," seems uninterested in commercial crossover.

Curr, who signed self-publishing star Colleen Hoover to a two-book deal, says she has two of her 11 editors combing the e-book ranks, with perhaps 25 percent of new books in 2013 coming from nontraditional sources.

Coker thinks the next move will be a major media conglomerate like News Corp. buying a big self-publisher. Already, Penguin Pearson spent $116 million to acquire self-publishing firm Author Solutions in July. Many believe there is untapped value in a company like Smashwords not from book sales but in exploiting its library of content and rich trove of consumer data. Asks Coker, "Why wouldn't a big media conglomerate want access to a pipeline of incredible stories?"



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