Barry Diller and Scott Rudin Explore Ebook Venture (Updated)

Barry Diller, chairman of IAC/InterActive Corp., and producer Scott Rudin are exploring the idea of establishing a highbrow literary ebook publishing concern, according to an informed source.

Key details about what authors might be involved and how they would be compensated, as well as whether the imprint would issue print versions of books, are not known.

In March, Rudin hired John Schoenfelder, the editor of genre imprint Mulholland Books and previously an editor at St. Martin's Press and Little Brown, to be the director of development for his production company.

Rudin declined to comment about the proposed venture. 

Overall, ebook revenues now surpass what publishers get from hardcover books, though both lag paperbacks. For the first quarter of 2012, adult hardcover revenue totaled $228 million versus $282 million for ebooks and $398 million for paperbacks.

Boutique ebook publishing ventures are a new concept. Open Road Media, founded by former HarperCollins CEO Jane Friedman and Academy Award-nominated producer Jeff Sharp (Boys Don't Cry), describes itself as a "digital publisher and multimedia content company." Its highest profile efforts to date include the ebook backlist for prominent older authors like William Styron and Pat Conroy.

Open Road's "e-riginals" series has focused on lower-profile authors or given higher-profile authors an outlet for smaller projects. For example, Jennifer Weiner (Good in Bed), Meg Cabot (Princess Diaries) andJane Green (Jemima J) each penned a romantic short story for the collection Cosmo's Sexiest Stories Ever: Three Naughty Tales.

 Amazon has set up its own publishing imprint, hiring Laurence Kirshbaum, the former Chairman of the Time Warner Book Group to run it, and signing several high-profile projects, including a memoir by Penny Marshall and a new book from Tim Feriss (Four Hour Workweek). Amazon has partnered with Houghton Mifflin to produce print versions of its titles.

Self-published books have been a huge part of the market, but mainly at the low end. Two self-published ebooks made Amazon's list of its ten bestselling fiction titles of 2011. This summer's breakout success Fifty Shades of Grey, started as a self-published book before it was issued as an ebook by a small Australian publisher and then  acquired by Vintage Books.

The self-published segment tends to be highly price sensitive, with the biggest hits priced at $2.99 or less.

CORRECTION: An earlier version of this story incorrectly stated that literary agent Luke Janklow of Janklow & Nesbit Associates was involved in the venture.  He had early discussions with Barry Diller about the concept but was never formally involved. The Hollywood Reporter regrets the error.