Steve PotashWouldn’t it make more sense for OverDrive to focus on distribution and retail operations and wind down the one in format conversion? I’ve said so before, and now it looks as if the company has quietly been doing exactly that. Good move!

I asked OverDrive head Steve Potash, also president of the Open eBook Forum, for comment on Dorothea’s Salo’s recent blog item about format conversion. Too, I requested a report on the financial well-being of his company–on which so many small publishers depend. Here’s the lowdown from Steve directly:

Winding down of our conversion business has been ongoing for nearly a year. We were losing accounts due to our pricing model which relied mostly on our US staff and could not compete on price with Asian sources.

We have been growing dramatically in library, distribution and retail services and determined we would apply our data services team to support the growth of Content Reserve with new sources of materials including audio.

We have an in-house conversion team supporting our catalog and metadata services, protyping periodicals and new eDocs, and setting up production for audio book encoding. 4 years ago publishers needed a local partner for OeBF and PDF eBook production and workflow. Now, most larger publishers have automated their eBook production or found the cheapest sources offshore.

We are proud of the quality and inventory and workflow we designed. I expect we will always have a few folks fixing titles, scanning covers, meeting deadlines, etc. But we determined to focus and invest in our distribution-based services where we are in constant demand.

Revenues are growing and we are doing fine.

Good to know. With just $10-$20 million in global revenue, the e-book business has lots of room to grow, and OverDrive has its share of contributions to make, especially since Steve seems to be showing more flexibility on the format front.

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