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NEW YORK (Reuters) - The mood at this week's giant Book Expo America was upbeat as publishers' excitement over the growth of electronic books - or ebooks - and the future of digital publishing offset concern over sluggish sales of traditional books.
Book publishing is undergoing a sea change that parallels the transformation of music publishing over the past decade, and book sellers are starting to feel their way forward.
Borders Group, once the second largest U.S. book retailer, which helped pioneer brick-and-mortar book superstores, liquidated its 40-year-old business in September of last year after failing to overcome competition from larger rival Barnes & Noble Inc. and online book seller Amazon.com Inc.
Reflecting that change at the annual three-day gathering of writers, booksellers and publishing house executives, ebook publishers and technology companies were given more prominent space in the heart of the showroom.
Star authors, including Zadie Smith, Jo Nesbo and Michael Chabon, also took the spotlight, and there were plenty of jokes about erotic fiction hit, "Fifty Shades of Grey."
But the future of the industry was the focus, and the general feeling was that writers and publishers are coming to a better understanding of electronic publishing and marketing.
"This year it felt like there was high energy," said Todd Humphrey of Canadian digital book company Kobo, one of the ebook companies that was moved from the Expo's corner, where most of them were previously placed, to the middle of the floor next to major publishers like Random House.
Random House, the world's largest general interest book publisher, is owned by Bertelsmann AG of Germany.
"Last year, the publishing industry as a whole felt like it was a bit on its heels. This year there were a lot more smiles," he added. "People are realizing, things are moving to digital, people need to adjust."
Things are not all sweetness and light on the ebook publishing front, though.
The Justice Department sued Apple Inc. and several publishers over ebook prices in April, accusing publishers of conspiring to exert price controls over digital book downloads.
Hachette Book Group, HarperCollins and Simon & Schuster reached a settlement with Justice that requires them to allow retailers including Amazon and Barnes & Noble to reduce the prices of ebooks they sell.
Apple, The Macmillan Group and Penguin Group did not agree to a settlement, and the Justice Department has promised to pursue the case against them vigorously.
Digital publishing companies, many of which produce ebooks for traditional publishers to meet demand for Apple's iPad, Amazon's Kindle or Barnes & Noble's Nook, said they had noticed differences in attitude from big publishing houses.
Major publishers have been criticized in the past for being slow to embrace digital formats. Now they are reducing the number of printed books as ebook sales increase.
Ebook net sales revenue for 2011 was $21.5 million, a gain of 332.6 percent over 2010. Print sales in 2011 were $335.9 million, compared to $328.3 million in 2010, a paltry 2 percent increase, according to a May report from the Association of American Publishers.
"I don't think any of the publishers have their head in the sand anymore," said Mark Gaff, director of operations at My Tablet Books, which specializes in illustrated book printing conversions. "Last year, there were still some ... saying, 'It's not going to happen'."
He added that many publishers had shifted their concerns to how to improve the visual quality of e-books.
The growing use of digital self-publishing, as well as newer methods of promoting books on the Web, were also key topics owing, at least in part, to the huge success of E.L. James "Fifty Shades of Grey," which was originally self-released.
This week, Kobo expanded its ereader business with a new self-publishing platform but, like others, Humphrey said direct marketing by authors was still evolving.
David Shanks, chief executive of Penguin Group USA, said marketing was the biggest change on people's minds this year, with the "discoverability" of books from traditional print media becoming "fewer and fewer."
"It feels like there is a momentum building online," said Shanks. "More than ever, if you can get a digital buzz going, starting with this show, then we think we can replace some of the exposure that we are losing."
In addition, he said, any "momentum" of self-published books was viewed as "an opportunity" for major publishers looking for authors who had already built their own buzz, as did James with "Fifty Shades."
Still, some attendees saw reason to joke about the future of digital books, as well as the popularity of James' erotic novel, with its central character Christian Grey. Actress Kirstie Alley told one audience she was neither an ebook reader nor an ebook writer while promoting her new memoir "The Art of Men."
But there was a guy in her new book, she said, "who sort of made Christian Grey look like Justin Bieber."
Editing by Todd Eastham