This story comes from John Kremer's Book Marketing Bestsellars Blog by way of David Kirkpatrick's Fast Forward blog at Fortune.com. Unfortunately we don't have the link to the original interview and story.
Author Paulo Coelho is convinced that publishing entire digital
versions of his books have boosted his book sales which are now at 100
million books a year. If you are an author and are "afraid" to publish your chapters online, for fear of diminishing sales, you should read this.
In 1999, best-selling author Paulo Coelho, who wrote The Alchemist, was
failing in Russia. That year he sold only about 1,000 books, and his
Russian publisher dropped him. But after he found another, Coelho took
a radical step. On his own Web site, launched in 1996, he posted a
digital Russian copy of The Alchemist.
Coelho explained why he thinks giving books away online leads to selling more copies in print: "It's very difficult to read a book on your computer. People start printing out their own copies. But if they like the book, after reading 30-40 pages they just go out and buy it."
Now Coelho is a convert to the Internet way of doing things. His online e-mail newsletter, published since 2000, has 200,000 subscribers. In 2006 he started blogging. Last year he joined MySpace and Facebook to interact more actively with readers.
Now he's running a contest in partnership with Hewlett-Packard to encourage visitors to make films of segments of his books.
If you think you're spending a lot of time on the computer, read this:
He spends about three hours online every day, interacting with readers who send him over 1,000 e-mails and messages daily. A fulltime staff of six helps manage his manifold Net activities, and the entire operation costs him $15,000 each month, which he pays out of his own pocket.
"I don't understand why publishers don't understand that this new medium is not killing books," Coelho says. "I'm doing it mostly because the joy of a writer is to be read. But at the end of the day, you will sell more books."
If that doesn't encourage you to write more on the web, then you need to drink more coffee. With a staff of six that he can afford to pay himself, who cares if there are thousands of emails every day?

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I read this on Kremer's blog as well. I have heard that ebooks do boost sales in some genres, especially nonfiction since it gives the buyer a chance to see what the book is all about. However, one has to wonder with Coelho if this sort of success would have happened if the Alchemist was not such a major hit.
Posted by: Book Marketing newbie | February 04, 2008 at 07:46 AM
hello!
I'm a big Paulo Coelho's fan and I don't know if you heard about his blog
http://www.paulocoelhoblog.com
I've started as a fan and now I'm collaborating with him and thought that you would like to enter his universe.
Check the blog.
You'll see a community of warriors of light sharing ideas, dreams and most importantly following their personal legend.
QUOTE OF THE DAY:
We need to forget what we think we are, so that we can really become what we are.
Have a nice day!
Aart
Posted by: aarthilal | February 04, 2008 at 12:52 PM
I am so glad to see writers like Coelho shedding light on an oft misunderstood medium to get noticed and sell. Since I work with self-publishing authors, Coelho is just one more success story I can share with others about online and self-publishing. Bravo to him! and yes, I am a fan.
Posted by: Bea | February 06, 2008 at 02:22 PM