A few years ago, Internet entrepreneur Josh Schanker was asked by a friend to help brainstorm ways to get e-books from lesser known authors discovered. He came up with the idea of giving away and deeply discounting e-books to help writers build a fan base, but he still needed an effective way to advertise the promotions to readers. “We decided to test building our own e-mail list,” said Schanker. “Readers loved the idea of a regular e-mail featuring flash sales on e-books, but we soon realized that the service would work best if it featured titles from all publishers and authors.” So, in early 2012, he and Nicholas Ciarelli, who has a background in digital media, founded BookBub, a daily deal site for e-books based in Cambridge, Mass.

With no experience in publishing, Schanker was surprised to discover that a product akin to BookBub didn’t already exist. As he learned more about the history of book retailing and the new directions in book buying afforded by the ascension of the e-book, he realized this direct-to-consumer deal blast was his niche to fill. “It wasn’t until the rise of e-commerce and e-books, allowing readers to get books anywhere and anytime they wanted, that publishers [began] shifting an increasing amount of resources toward marketing direct to consumers, creating a need for consumer-marketing vehicles used in other industries that had not yet developed in publishing,” he explained.

Almost two years since its launch, BookBub is nearing the two million–member milestone, one Schanker expects to hit at the end of this year or the beginning of 2014. “We’ve been incredibly fortunate that so many of our members have spread the word about us to their friends, allowing us to grow so rapidly,” he said.

BookBub functions as an advertorial, relying on an in-house editorial team to select books distributed via a daily e-mail to its subscribers. A title must be marked down by at least 50%, be a full-length work, and not featured on BookBub in the last six months in order to be considered. The company receives 50 to 100 submissions per day from publishers and authors that meet those minimum requirements, and on average, BookBub editors select around 20% of submissions, most of which are listed at $2.99 or below, and many are 99¢ or free.

“We believe that curating and targeting the books we include allows us to maintain a high-quality product with an engaged and active user-base,” said Katie Donelan, director of business development at BookBub. “Which is ultimately what makes BookBub an effective marketing service for our partners.”

Once a book is selected, it is then slotted for a BookBub e-mail on a particular date and in a certain category, or list. Fees for inclusion are based on the discounted price of the book, as well as the size of the category, or how many subscribers have signed up to receive books for that particular list. Prices range from $30 to place a free book in the new adult and college romance category, to $1,250 for a book with a price of greater than $2 listed as a mystery title. Mysteries and contemporary romance have always been BookBub’s largest and fastest growing lists, Donelan said, and according to the BookBub Web site, the mysteries category is the largest, with more than 750,000 subscribers. On average, free books in that category see 17,000 downloads, and the average number of discounted books sold is 1,150.

BookBub works with the big five publishers, midsize and smaller publishers, and, from the get-go, self-published writers. “Self-published authors were some of our earliest partners,” said Donelan. “In large part because many of them were early adopters of experimental and strategic pricing.”

BookBub proves especially useful for large publishers to generate buzz on a given author, especially when his or her book doesn’t have support from a retailer-specific promotional discount, according to Donelan. Though, many publishers do use BookBub in addition to retailer programs like Amazon’s Kindle Daily Deal and Barnes & Noble’s Nook Daily Find, she added.

To demonstrate the BookBub effect, Donelan pointed to a promotion for Kristin Hannah’s Between Sisters (Ballantine) that ran in October. The title was available for 99 cents for a limited time, listed in BookBub’s “bestseller” list, which includes submissions that appeal to a broad audience. “Average sales [per book] on our bestseller list usually range between 2,000 and 6,000,” said Donelan. “But this title sold tens of thousands of copies during the promotion. It jumped to #1 on the Kindle bestseller list during the BookBub promotion and hit the New York Times combined list at #5, and the e-book fiction list at #1, the week after the BookBub listing.”

At a time when the book and media industries are deep in questions about the value of content in a digital age, is BookBub’s growing popularity a further indication that readers are no longer willing to pay list, or even close to list, for e-books? Schanker said all signs point to no, so far. “Our readers regularly report that when they discover an author they like through a BookBub promotion, they go on to purchase other books by that author at full price,” he said. “And our partners tell us they see sales jumps on other titles from the same author during and after the price promotion, including new releases. Ultimately, publishers want to get their books into the hands of as many readers as possible, and price promotions help do just that.”