Carrboro publisher carves out niche in e-book market

glloyd@newsobserver.comOctober 7, 2012 

— Since starting TIPS Technical Publishing in 1997, Robert Kern has watched as the book industry has undergone a gradual transformation that has forced him to reinvent the company several times.

TIPS started out offering print services for academic textbook publishers. But when the technology book market collapsed a decade ago, hard times ensued. The company has survived, and positioned itself for growth, by carving out a niche in the growing market for e-books.

The company has produced hundreds of e-books for major publishers, including designing big-name titles such as Neil Degrasse Tyson’s “Space Chronicles” and “Moneyball,” by Michael Lewis.

“We don’t write books, we don’t print books, but we do everything in between, including the editing, design, indexing and conversion,” said Kern, 49, who today has three full-time employees, several part-time employees, freelancers and several interns from area universities.

The company’s primary client is W.W. Norton. TIPS is tackling the job of digitally publishing new Norton trade and professional titles, as well as the large backlist of older books the New York-based publisher has never released digitally before.

The evolution of TIPS mirrors the gradual switch from print to digital for the book industry. While print books still dominate the market, e-books are gaining popularity with readers every year. A Pew Research study conducted after the 2011 holiday season found 19 percent of adults owned an e-reader, nearly double the number who owned one before Christmas.

Industry data collected by the Association of American Publishers show sales in the e-book industry more than doubled last year, to more than $2 billion, up from $869 million in 2010. Overall, that’s still a small portion of book sales, since printed books brought in more than $11 billion. The 388 million e-books sold made up about 15 percent of overall book sales.

Costs similar

The question of how much an e-book should cost has riled the publishing world and led to federal authorities’ accusations of collusion.

In April, the Justice Department and 15 states sued Apple, Macmillan and Penguin Group for what Attorney General Eric Holder said was a conspiracy to raise the price of e-books.

Adding $2 to $5 to the cost of each e-book cost consumers more than $100 million in the past two years, according to the lawsuit.

When Amazon tried to set the price of e-books sold on its website at $9.99, significantly less than the cost of the average hardcover, Holder said, top publishing executives conspired to raise prices by eliminating competition. Hachette, HarperCollins and Simon & Schuster settled with the Justice Department before the lawsuit was filed.

In an April blog post on his website, Duke professor and author Dan Ariely pointed out how, when a Kindle version of an e-book sold for more than the hardcover version, which had been heavily discounted by Amazon, angry customers responded with a torrent of one-star reviews to show their displeasure at paying the same price as the hardcover for what they perceived as an overpriced electronic book.

Since e-books eliminate costs from printing to shipping to stocking bookshelves, and no trees are cut down for digital content, many consumers assume e-books must be cheap to produce.

The actual cost to a publisher of printing a book adds up to only a few dollars per book, however, and e-books of new releases sell for less than the traditional hardcover book price of around $25. Major costs to the publisher remain the same whether a book is an electronic download or a physical product made of dead trees.

“The costs of a book are primarily the purveying of content no matter the format – the distribution, marketing, advertisements, art, cover, author and design,” Kern said.

Those few extra dollars per book can add up for companies looking to cut costs. TIPS got its start in digital publication by assisting GlaxoSmithKline into savings of $250,000 a year by moving its quarterly updates and compliance documents to digital form.

Designing an e-book

In the tricky, developing new digital landscape of e-books, perfect design does not mean a book will look anything like you designed it when a reader opens it on a Kindle or iPad. And no two books are exactly the same for design purposes.

That means the design of each book is a problem that Erin Campbell, TIPS chief e-book designer, has to solve.

The relationship between e-books and readers usually requires a middleman – an e-reader that allows the reader to read the e-book, whether it’s on a Kindle or an iPhone or a Nook. Each of these devices has different proprietary e-book formats, but publishers sell only one e-book to fit them all – a conundrum that makes it difficult for e-book designers like Campbell, who has to create one file that works the best on all devices.

The reader with the largest user base, Amazon’s Kindle, uses a .mobi file format that was the first in the e-book game and predates the improved open standard ePub format. Amazon, Sony, Apple and Barnes & Noble make up 90 percent of the e-reader market.

“As a consumer, I love my Kindle,” Campbell said. “As a developer, I hate it.”

The e-books TIPS produces are the most cutting-edge in the industry, Kern said, but Campbell compared the process to designing a website for Google Chrome – in 1995.

The most difficult conversions to format are cookbooks or textbooks with many images. Things get tricky with footnotes, notes, links and interactive content – e-books are similar to portable websites, Campbell noted. While print content has historically been quoted per page, to accurately quote digital content, publishers like TIPS must quote by the hour.

Reading e-books designed by other people for pleasure can sometimes be trying for a perfectionist like Campbell.

“It drives me crazy to see other people’s e-books, because they’re not done right,” she said.

Lloyd: 919-829-4649

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