by Andrew Shaffer / Illustration by Thomas Allen

Half a century before e-books turned publishing upside down, a different format threatened to destroy the industry.

Here’s a little perspective: In 1939, gas cost 10 cents a gallon at the pump. A movie ticket set you back 20 cents. John Steinbeck’s The Grapes of Wrath, the year’s bestselling hardcover book, was $2.75. For a nation suffering 20 percent unemployment, books were an impossible expense.

But in just one day, Robert de Graff changed that. On June 19, 1939, the tall, dynamic entrepreneur took out a bold, full-page ad in The New York Times: OUT TODAY—THE NEW POCKET BOOKS THAT MAY TRANSFORM NEW YORK’S READING HABITS.

The ad was timed to coincide with the debut of his newest endeavor, an imprint called Pocket Books. Starting with a test run of 10 titles, which included classics as well as modern hits, de Graff planned to unleash tote-able paperbacks on the American market. But it wasn’t just the softcover format that was revolutionary: De Graff was pricing his Pocket Books at a mere 25 cents.

Despite its audacity, de Graff’s ad wasn’t brazen enough for his taste. A former publishing exec who’d cut his teeth running imprints for Doubleday, de Graff wanted the ad to read THE NEW POCKET BOOKS THAT WILL TRANSFORM NEW YORK’S READING HABITS. His business partners at Simon & Schuster were less confident and forced the edit. Even though some European publishers were making waves with paperbacks—Penguin in England and Albatross in Germany—New York publishers didn’t think the cheap, flimsy books would translate to the American market.

They were wrong. It took just a week for Pocket Books to sell out its initial 100,000 copy run. Despite industry skepticism, paperbacks were about to transform America’s relationship with reading forever.

The New Books on the Block

If paperbacks were going to succeed in America, they would need a new model. De Graff, for his part, was well acquainted with the economics of books. He knew that printing costs were high because volumes were low—an average hardcover print run of 10,000 might cost 40 cents per copy. With only 500 bookstores in the U.S., most located in major cities, low demand was baked into the equation.

In the U.K., things were different. There, four years prior, Penguin Books founder Allen Lane had started publishing popular titles with paper bindings and distributed them in train stations and department stores. In his first year of operation, Lane sold more than three million “mass-market” paperbacks.

Quantity was key. De Graff knew that if he could print 100,000 paperbound books, production costs would plummet to 10 cents per copy. But it would be impossible for Pocket Books to turn a profit if it couldn’t reach hundreds of thousands of readers. And that would never happen as long as de Graff relied solely on bookstores for distribution. So de Graff devised a plan to get his books into places where books weren’t traditionally sold. His twist? Using magazine distributors to place Pocket Books in newsstands, subway stations, drugstores, and other outlets to reach the underserved suburban and rural populace. But if Pocket Books were going to sell, they couldn’t just stick to the highbrow. De Graff avoided the stately, color-coded covers of European paperbacks, which lacked graphics other than the publishers’ logos, and splashed colorful, eye-catching drawings on his books.

Even with the success of Pocket Books’ test run, hardcover publishers scoffed at the idea of paperbacks for the masses. Still, they were more than willing to sell Pocket Books the reprint rights to their hardcover titles, if only to humor de Graff. “We feel we ought to give it a chance—to show that it won’t work here,” an anonymous publisher told Time shortly after Pocket Books’ launch. For every paperback sold, the hardcover publisher would receive a penny royalty per copy—which it split fifty-fifty with the author. Pocket Books would also make about a penny in profit for each copy sold.

Since de Graff offered refunds for unsold copies, carrying the books was a no-brainer. In 1939, de Graff told Publishers Weekly that he’d been deluged with requests from “out-of-town dealers.” And from the get-go Americans devoured every 25-cent paperback de Graff could feed them. By the time Pocket Books sold its 100 millionth copy in September 1944, its books could be found in more than 70,000 outlets across the U.S. They might not have had the glamour and sophistication of hardcovers, but paperbacks were making serious money. It wasn’t long before other publishers decided to jump into the game.

Cover Stories

In the late 1930s, Penguin’s Allen Lane met Ian Ballantine, a young American graduate student at the London School of Economics whose thesis examined the paperback business. Impressed by his research, Lane hired Ballantine to launch a U.S. branch of Penguin in 1939, the same year Pocket Books got its start.

At first, Penguin wasn’t much of a threat to de Graff, since Ballantine, with the help of his 19-year-old bride, Betty, mainly imported the parent company’s books from the U.K. The covers featured little besides the title, the author’s name, and the Penguin logo, giving them a generic, minimalist look that failed to excite the American market. But as World War II escalated, Lane’s control over U.S. operations became tenuous. Imports from the U.K. were scarce, and the Ballantines took the opportunity to print their own selections under the Penguin banner, adding illustrated covers to compete with Pocket Books.

After the war, Lane was horrified to see his prestigious Penguin logo stamped on such tawdry covers. In 1945, he forced the Ballantines out. Lane expected his new hires, German publisher Kurt Enoch and American Victor Weybright, to fall in line with his refined sensibilities, but they too failed him. Graphic (and sometimes lurid) illustrations were necessary for the American market, Weybright argued. “The general intention of our covers is to attract Americans, who, more elementary than the Britishers, are schooled from infancy to disdain even the best product unless it is smoothly packaged and merchandised,” Weybright wrote to Lane.

Pocket Watch

With Pocket Books and Penguin paving the way, the paperback gold rush had begun. Other paperback houses soon followed, including Popular Library, Dell, Fawcett Publications, and Avon Pocket Size Books. In 1948, Lane washed his hands of Penguin U.S., selling the operation to Weybright and Enoch, who renamed it New American Library of World Literature (NAL). Hardcover publishers watched nervously as these new players chipped away at their market share. For the most part, their only stake in the new paperback houses lay in the reprint royalties they split with authors. “If other publishers had any sense, they would combine against them and suppress them,” George Orwell once said of paperbacks, which he considered a “splendid” value.

Months after his removal from Penguin, Ian Ballantine pitched hardcover reprinter Grosset & Dunlap the idea of starting a new paperback business. Grosset & Dunlap was a joint venture of the day’s biggest hardcover players: Random House, Harper’s, Charles Scribner’s Sons, Book-of-the-Month Club, and Little, Brown. Each of these companies was looking for a way to dip its toes into the exploding market, and Ballantine had come to them at the right time.

De Graff himself unwittingly helped seal the deal by advising the publishers that the paperback industry wasn’t worth exploring. Random House president Bennett Cerf said, “When Bob came as a ‘friend’ to give us a talk about why we shouldn’t go into the business, we figured it must be a damned good idea.” Grosset & Dunlap, along with distributor Curtis, became shareholders in Ballantine’s new paperback house, Bantam Books.

Bantam’s impact was immediate—its initial printings were usually 200,000 copies or more. Crazier still, almost every title sold out. Each month, Bantam published four new books from the large backlist available via Grosset & Dunlap, and it had no shortage of quality titles, including The Great Gatsby and The Grapes of Wrath (now just 25 cents). How would other publishers keep up?

A Novel Idea

Toward the end of the 1940s, with so many new entrants in the booming paperback business, magazine and comic book publisher Fawcett Publications gave the industry a new idea to mock: paperback originals. Up to that point, paperback publishers had limited themselves to reprinting hardcover titles or publishing quick, timely original nonfiction such as the wartime bestseller What’s That Plane, a guide to identifying American and Japanese aircraft.

Fawcett was saddled with a distribution agreement that prevented it from publishing and distributing its own reprints of hardcover titles. Seeking to exploit a loophole, editor in chief Ralph Daigh announced that Fawcett would begin publishing original fiction in paperback form beginning in February 1950.

“Successful authors are not interested in original publishing at 25 cents,” Freeman Lewis, executive vice-president of Pocket Books said. Hardcover publisher Doubleday’s LeBaron R. Barker claimed that the concept could “undermine the whole structure of publishing.” Hardcover publishers, of course, had a vested interest in maintaining the status quo. They were still receiving 50 percent of the royalties by selling reprint rights.

Fawcett silenced the skeptics by selling more than nine million copies within six months. Authors did the math, and writers of genre fiction—thrillers, Westerns, and romance especially—jumped at the opportunity to write paperback originals. Still, “serious” literary writers insisted on staying in the hardcover market for the prestige, and critics in turn declined to review paperback originals. Clearly, the stigma was still there.

Trading Up

Literary authors and critics weren’t the only ones turning up their noses at paperbacks. Bookstore owners, for the most part, refused to stock them, and students at most schools and universities still used hardcover texts.

Enter the “trade paperback.” Publishers had been unsuccessfully experimenting with larger-sized paperbacks since the 1940s, but it wasn’t until Doubleday’s Jason Epstein introduced Anchor Books trade paperbacks in 1953 that the idea caught fire. The idea arose from Epstein’s own college experience. “The writers we had discovered in college were either out of print or available only in expensive hardcover editions,” he wrote in Book Business. Instead of reprinting last year’s hardcover bestsellers and classics, Epstein envisioned a line of “upscale paperbacks” handpicked for their literary merit from publishers’ deep backlists.

Anchor’s trade paperbacks were larger and more durable than mass-market paperbacks and were an instant hit with high schools and colleges. Their attractive covers, illustrated by fine artists such as Edward Gorey, immediately distinguished them from the grittier pulp paperbacks, and they appealed to a more “intellectual” market. As a result, they found a nice middle ground in price. Epstein’s paperbacks had small print runs of about 20,000 and sold for 65 cents to $1.25 when mass-market paperbacks were still going for 25 to 50 cents. Trade paperbacks also opened doors to bookstores. Within 10 years, 85 percent of bookstores carried the handsome volumes.

In 1960, revenues from paperbacks of all shapes and sizes finally surpassed those from hardcover sales. The same year, Pocket Books became the first publisher to be publicly traded on a stock exchange, essentially marking paperbacks' ascent to the mainstream. Hardcovers never died out in the United States, though paperbacks continued to outsell them as recently as 2010, thanks in no small part to the continuing price difference—for example, George R.R. Martin’s bestselling novel A Game of Thrones retails for $32 in hardcover and just $8.99 in mass-market paperback.

Today, it’s de rigueur for major publishers to print both hardcover and paperback books. And of course, there’s a new “pocket book” transforming reading habits, the e-book. Now that Amazon—and the other online booksellers who followed—have untethered e-books from computers by offering inexpensive e-readers, the e-book revolution has done de Graff’s brilliant distribution scheme one better: These days, anyone with a smartphone has an entire bookstore in his or her pocket.

This article originally appeared in a 2012 issue of mental_floss magazine, available wherever brilliant/lots of magazines are sold.