Mobility is the buzzword in the current content industry. And the e-book has finally landed. After all, who needs more convincing when 13 American publishers reported that their e-book sales soared 176.6% in 2009 to $169.5 million? Numbers talk, and everybody—especially trade publishers and their content services providers—is listening. Hard.
Add recent events (iPad launch, iBookstore announcement, agency model, and Amazon’s tussle with publishers) to giddy prognostications (“the printed book is dead,” “iPad the Kindle killer,” “mobile apps are the future”), and you would think that nothing else mattered last year except e-books and mobile content.
Well, that’s only half of the story. American and European publishers outsourced more SSTM and journal projects (covering editorial, composition, and e-deliverables) than ever to India in order to reduce costs and keep afloat amid the floundering global economy. Digitization projects for both front- and backlists were also up and showing no signs of deceleration.
But stalled U.S. federal and state government funding did render the k—12 segment near comatose and put a damper on a higher-ed segment that has seen a welcome upswing in college enrollment and adult/continuing education. On the bright side, publishers are embracing e-learning in a big way and preparing to take lessons anywhere the audience may be.
Before you get swept along by the unbridled enthusiasm for Kindle, Nook, Sony Reader, Blio, Iceberg, or iPad, remember this: e-readers (dedicated or multifunctional) and their software come and go, but the basics—in this case, the ePub and the underlying XML standards—are here for good. Sticking to preferred formats while remaining device agnostic is the way forward. Remember, too, that e-learning is often derived from or based on print products, as are e-books and mobile apps.
As for vendors to help you convert, design, manage, dechunk, distribute, or archive your content, there are at least 150 companies in India standing by. Your challenge is to determine who will best serve your needs while meeting your budget.
Know that every vendor, just like you and fellow publishers, is staring at tremendous margin pressure and price competition due to rising wages, escalating operating costs, skilled labor shortage, and new market entrants. Meanwhile, commoditization of certain services such as keyboarding, typesetting, and basic digitization has prompted value addition and portfolio extension into specialized knowledge-based services such as high-level copyediting, research, and content authoring.
The Indian publishing outsourcing industry is expected to hit $1.2 billion by 2012, up from $660 million in 2008. That astonishing figure, however, is merely a drop in the ocean, as the global English-language publishing market—including the newspaper, magazine, and legal segments—is estimated to be worth well over $250 billion. (And we have not even begun to size up the up-and-coming non—English-language market.)
The following review of 13 vendors, randomly selected and alphabetically arranged, is not intended to endorse, recommend, or promote any specific company or service. You, as the buyer, have to practice due diligence when selecting vendors and negotiating contracts.
Helping publishers redefine the “book,” and profit from it, in today’s digital and mobile world is Aptara’s focus. “We have gone beyond converting back files and creating digital stills to helping publishers incorporate sound and motion—the most effective way of delivering content, especially for the educational segment,” says CEO Dev Ganesan, who points out that more b2b enterprises are distributing up-to-date corporate information on e-books. “The surge in e-book popularity has also sparked a growth in training courses delivered just in time via mobile devices, also known as m-learning. We expect to see a significant expansion in the mobile segment.” Aptara is also busy producing bestselling children’s titles as e-books for mobile distribution for Walker Books, Candlewick Press, and others.
The new facility in Trivandrum, Kerala, which brings Aptara’s staff strength in India to over 4,000, expands its KPO (knowledge process outsourcing) in areas such as subscriber management, content mining and development, and database development and maintenance, adds Ganesan. “Our clients are seeking deeper and more sustained cost savings and higher revenue growth by outsourcing the entire content processing workflow, not just projects or individual tasks. In this regard, we have been able to help publishers respond to the economic downturn by making their operations more cost-effective and giving them the agility needed to adapt to a rapidly changing digital marketplace. In fact, 2009 was our best year ever despite the U.S. financial crisis. We saw massive growth in digital publishing, especially for e-books, KPO services, and significant updates of journals.”
Aptara’s latest technology product, eGen, offers the ability to convert existing XML files to e-books directly and with minimal manual intervention. “It is unique in its ability to turn complex books with illustrations, pictures, formulas, graphs, and sophisticated style sheets into high-quality output,” says Ganesan. “Several large STM journal publishers are now using eGen to move titles to e-book formats such as EPub for immediate sale.”
The big news at diacriTech is the launch of its proprietary Flash-based e-book called ActiveBook. “This is our answer to a changing publishing industry that is either busy augmenting print products or moving away from print to the digital environment. Our ActiveBooks are built from PDF or application files and maintain rich layouts for best visual appeal,” says v-p A.R.M. Gopinath, pointing out that ActiveBooks can also embed audio, video, and Flash animations. “Magazine publishers are capitalizing on this by upselling their print advertisements with animation and interactive content for the ActiveBook version. School and college publishers, on the other hand, are adding interactive exercises within the book, and at times replacing digital stills with videos. Publishers may also personalize the content by inserting author introductions or explanations to different sections of a book.”
But the most important feature of ActiveBook, adds Gopinath, is that it allows readers to share notes, highlights, and bookmarks with friends. “It enables and facilitates book groups, and in order for friends to view a shared asset, they would have to purchase the book. From the publisher’s standpoint, you now have your readers selling the books for you.” ActiveBooks do not permit viewing by unauthorized persons and are therefore secure, and publishers can control the printing or the copying and pasting of parts or all of a book. “Titles are made available on our server, activefolio.com, but clients have several hosting options, including the turnkey solution, where diacriTech places the ActiveBooks on their server. We will be introducing the offline version of ActiveBook soon.”
Adds v-p Mahesh Balakrishnan, “We have also been creating content and markups for mobile delivery for a while now. Recently, we started developing mobile apps, mostly educational, with a gaming interface, such as math problem solvers and word builders to keep kids engaged while imparting knowledge and stimulating their brains. In short, we’re helping publishers produce better products that take into consideration changing consumer demands and competing platforms.”
Glyph was the result of a merger of Infomedia 18’s publishing services businesses: Cepha Imaging, ITC, and Keyword. After an extensive rebranding campaign last year, Glyph has now established five sales offices in the U.S. (New York, Minneapolis, and Ft. Lauderdale, Fla.), Canada, and Britain. Its portfolio has expanded to include trade titles, magazines, and marketing collaterals. “We entered the magazine segment a few months back,” says Waseem Andrabi, executive v-p of international operations. “It allows us to extend our project management and graphics capabilities, honed after years of handling complex higher-ed titles.”
Meanwhile, its parent company’s vast resources have allowed Glyph to push its music publishing business up a notch. Adds Andrabi, “We have had experience with music titles, but never to the scale required by one current project that involves music filming, editing, and typesetting. The technical expertise is provided by one of our sister companies. We are also fortunate to have a team of typesetters who understand music and know how it should be set. This highlights the extent we are prepared to go for our customers. We believe that the only way to grow in the content services industry is to innovate processes, expand domain expertise and be prepared to grab any opportunity. Unexplored niches abound, but we must keep innovating to be able to tap into them.”
Over at Glyph Bangalore, the stream of new media projects, especially e-books, continues unabated. “We have developed the expertise in producing ePub files for most available devices,” says Hymanand Angara, executive v-p of India operations, who notes that shifting industry dynamics and consumer demands have made most of his traditional publishing clients consider e-books. “However, doubts persist about how well e-books will be received by the STM audience and what kind of content should be selected for e-book conversion. But by all indications, e-books are definitely here to stay.”
IBH Process Solutions
At IBH, the main focus is to provide braille, NIMAS, and DAISY conversion services to universities around the globe. As India’s top provider in these specialized products, its projects in this segment have grown about 80% per year since 2005. And a substantial part of its revenue, more than for any other vendors reviewed in this report, comes from Australia (not the usual North America).
“The Australian market is not huge. I regard it more as a boutique market where potential business volume is smaller compared to other territories, but quality delivery and personalized service are of paramount importance all the same. Since we have worked with Australian universities for quite a while, and we have been able to maintain consistent quality, our business has benefited from referrals and positive feedback,” says CEO Nizam Ahmed. “We do a lot of conversion and coding projects from source documents in such formats as PDF, TIFF, JPEG, and print, and we process around 20,000 to 30,000 pages monthly. The finished products may be in Word, XML, HTML, ePub, Mobipocket, DAISY, or braille. Short turnaround time is usually the biggest challenge for these projects. The cyclical nature of such jobs also creates a problem to staffing.”
Recent months have also seen IBH’s publishing services growing steadily. “Overall, our revenue has risen about 35% compared to 2008, and this is probably due to our expansion into services such as copyediting and indexing. Our strategy is to move up the service ladder and to provide more specialized services. In addition to major publishers and reputable universities, we are also assisting small and medium-size clients with end-to-end publishing services, technical support, and business solutions,” adds Ahmed, whose team is busy implementing information security measures throughout its work processes and within the production floor. His goal is to obtain certification by the end of this year.
“Educators, especially in America, are switching to e-books and e-readers,” says Jan Palmen, senior v-p and head of publishing practice. “These formats are more cost-effective, highly interactive and more eco-friendly than print material. California and Texas have launched e-learning initiatives, and educational publishers are seizing this opportunity. McGraw-Hill, for instance, has made all its higher-ed material available in Kindle. And with the availability of full-color e-readers such as the iPad, magazines and newspapers are expected to follow suit.” In 2009, Innodata Isogen’s e-book business doubled in size, and this format, says Palmen, “will morph into e-publishing. This segment is going to get more exciting.”
Meanwhile, its much-lauded KPO services continue to differentiate Innodata Isogen from other vendors. “In the past year, we have seen demand for high-end KPO services jump as clients turned to us for services that were once considered impossible to outsource. We have successfully authored original content and provided complex technical editing for STM and legal titles,” says Palmen. Innodata Isogen’s investment in technical and consultative business has also paid off. “We recognize that our clients need integrated total solutions, not just knowledge, process, or content technology solutions. Our relatively new Consulting and Technology Services group helps clients achieve lower costs and improve the value derived from their content supply chain and infrastructure through outsourcing.”
Not surprisingly, Innodata Isogen has enjoyed its third consecutive year of record revenue growth with nearly half of its business coming from non-American markets. “Although we have seen some new product development initiatives slowing down, the financial crisis has opened up new opportunities. Many services previously labeled 'core’ are now being outsourced. Companies also understand the tremendous value we provide, and they see the results of that value in the marketplace,” adds Palmen, who is focused on growing e-books and e-publishing services. “Another focus area is legal publishing, in which we have been a leader for some years. Another priority is to continue building our authoring, content origination, and editorial services.”
Ranked #1 for customization, reliability, and deployment, and #2 overall, in the 2009 Black Book of Outsourcing, Integra was also awarded for excellence in gender inclusivity by NASSCOM, India’s premier trade body and chamber of commerce for IT-related business processes outsourcing (BPO) industries. These accolades encapsulate the company’s quest for operational success and care for its staff (and the Pondicherry community). Its Sriram Charitable Trust goes beyond tree planting and environmental concerns to cover health care, education, social rehabilitation, rural uplift, women’s empowerment, and governance improvement. Meanwhile, the desire to build the industry’s talent pool and visibility has prompted CEO and founder Sriram Subramanya and COO Anu Sriram to design India’s first digital publishing degree course, now being offered at South Tamil Nadu’s Periyar Maniammai University. Since 2008, Subramanya has also been organizing and chairing an annual publishing BPO conference for industry players to exchange ideas and share information.
Integra’s journal projects grew more than 50% last year. “Much is owed to our team’s domain expertise in understanding clients’ requirements and their ability to meet tight deadlines,” says Subramanya, adding, “On-demand publishing is on the rise as publishers look to reducing inventory in order to be more eco-friendly and to save costs. Nonprint formats and more innovative content delivery methods are also becoming the norm in publishing. Of late, we are seeing more requests for ePub conversion. To meet all these needs, we now have a dedicated ePub delivery unit, proven multilingual capability, and a highly automated XML-first workflow.”
Integra’s full-service packaging services are boosted by its acquisition of New York—based Silver Editions last November. “Our flexible and scalable full service covers editorial development, design, project management, production, photo research, art buying, and composition up to final deliverables. This model enables handling of large volume, and close collaboration with clients further reduces our total cost of engagement,” adds Subramanya, who reinvests 4% of the company’s annual revenue in technology development and upgrades. “Cost pressures necessitate constant innovation and creation of new, higher-end solutions, which in turn offer differentiation.”
Expanding existing services, building a stronger U.S. presence and strengthening editorial capabilities top CEO Indira Rajan’s to-do list this year. Increased competition in the marketplace, she says, has brought greater cost and margin pressures. “So there is a lot of talk about increasing work efficiencies. For us, it means meeting growing operational needs by having a well-trained workforce, highly automated workflow, new software and well-tested infrastructure in place and ready to start on any project.” Publishers, she adds, “have been consolidating purchasing activities. They now demand end-to-end solutions, from concept to deliverables, from a single vendor. This has triggered a slew of acquisitions in our industry with the main goal of fortifying one’s capabilities.”
At the same time, she notes that more trade publishers are looking for e-book conversion services, especially in ePub and Kindle formats. “Our e-book business grew 12% last year. Based on the number of new enquiries from medium-size and small trade publishers, we may hit 30% this year. And with educational publishers moving aggressively into digital products, we should be seeing e-textbooks in Kindle or ePub soon.” With 60%—70% of Lapiz’s revenue coming from publishing clients, Rajan aims to capture as much of the fast-growing digital products market as possible.
“Digital products may be in PDF, proprietary, HTML, Flash, or e-book formats. Whichever, we have been producing them in addition to the print version for a long time. Our portfolio also covers whiteboard-compatible product development,” adds Rajan, whose team completed a science and social studies program of more than 10,000 pages recently. “Customization of various components is usually required for different U.S. territories. Besides major changes to the student book, it also requires fast turnaround and close collaboration between our Boston-based project management team and the client. Although we have handled many huge and complex STM projects, we always find k—12 projects most challenging, and also most interesting.” Leveraging its k—12 expertise, the team started offering illustrative art services last year, and feedback has been positive.
Going for a high degree of automation, says CEO Samudra Sen, is “the latest trend in the e-learning segment. For instance, we are currently building several projects using Adobe Flash and Flex technologies that involve creation of tools and templates to enable authoring of content, questions, and interactive exercises for various subjects. The tool sets we built are integrated into the client’s digital platform, allowing them the flexibility to scale content offerings accordingly. Our challenge is to achieve seamless integration besides ensuring an intuitive and simple user experience in content authoring. We also add blogs, wikis, and links to social networks such as Facebook and Twitter to our projects to make learning more engaging and fun.”
Armed with substantial funding from private equity fund Helix Investments, LearningMate is now preparing to shift to a revenue- and risk-sharing partner model. “We believe that, given the huge growth in the online education market, which has an estimated CAGR of 20%, the reward would far outweigh the risk. We would like to partner with reputable clients that have the ability to attract high rates of student subscription,” adds Sen, who is in the process of signing agreements with leading online schools in the k—12 segment and with a few publishers’ custom publishing divisions. “And while we stay focused on quarterly results, the key question is whether we are doing the right things to build value over the next three to four years and, more importantly, if the value is sustainable and scalable.”
For Sen, the sluggish k—12 segment has a silver lining. “As budgets are cut and the move to the electronic medium begins in order to save on printing, logistics, and distribution costs, many U.S. states are raising e-learning spending. In fact, 2009 was the year major publishers made significant investment in their digital strategy. That is really good for our industry.” And despite last year’s unfavorable economic situation, LearningMate grew 25%, improved its margins through efficient cost management, and, instead of downsizing, enlarged its workforce.
A strong focus on digital products has stood PMG in good stead in recent months. But co-CEO Kapil Viswanathan is not satisfied with the status quo, planning instead “to continue investing in R&D to discover new and better ways to help publishers deal with various digital content platforms, such as whiteboard, Kindle, and iPad. We also want to assist them in better packaging their content to suit digital consumers’ short attention spans. Now that multimedia delivery in the classroom is driving fundamental changes in pedagogy, we are adapting all our processes—from editorial development to production—to meet these new requirements. The goal is to help publishers to capitalize on this change and to view it as an opportunity instead of a threat.”
In 2009, PMG’s sales in the U.S. continued to grow despite the country’s financial turmoil and publishing industry slump. Growth came mostly from the higher-ed segment, which PMG expects to continue this year, possibly reaching 25%—30%. Noting that the k—12 market is starting to come out of a bad time, Jane Petlinksi, v-p of product development (k—12 division), says, “Several U.S. states have announced that they are moving ahead with plans to buy new materials. This means that school publishers will be busy developing new products this year. Since we expect digital products to be a key component in these new programs, our expertise in this area as well as in print-based offerings will come into play.”
Publishers’ move toward vendor consolidation has also benefited PMG. With its onshore/offshore delivery model, PMG is increasing its market share and solidifying its reputation as a full-service provider. “We have had multiple opportunities over the last several months to leverage our full-service capabilities for publishers in both k—12 and higher-ed markets. These projects have been highly successful due to the seamless interaction between our editorial, design, and production teams, flexibility and agility in implementation, and our focus on product innovation,” says Rick Vayo, president of the higher-ed division.
After successfully launching its interactive whiteboard (IWB) for primary science and math in the U.K. with Accelerated Learning System last year, Q2AMedia has turned its attention to Poland. “We have partnered with Transfer Learning to implement the IWB program in about 500 schools. Our partner helped us translate and customize it for the Polish school curriculum,” says cofounder and COO Gayatri Singh, who will be launching the same program in India soon. “Our strategy is to diversify our business beyond the U.S. and U.K., so we create content that can be readily customized to fit different needs and curricula.”
Last year, Q2AMedia also signed up with Collins Language to develop dictionaries and language products for the EFL (English as a foreign language) and ELT (English language teaching) markets. Adds Singh, “These products are designed for users aged 5—18 and will be launched in several markets, including India.”
Interestingly, India is high up on Singh’s target markets list. “The Indian economy has been growing rapidly in recent years and will continue expanding. This expansion has brought tremendous changes to our industry, especially in the education sector, which is attracting considerable interest from international players. It has led to educational institutions mushrooming. There is now a thirst for good content, and Indian players have realized that quality international content is key to business differentiation,” adds Singh, whose team is piloting the IWB program in schools across India and working with several Indian companies to help them create digital and print products.
Recently, Q2AMedia adapted its IWB content for the iPhone, thus allowing classroom content to be transferred into the home learning environment. “We also created an e-book engine for rapid conversion of pages, and we have produced more than 60 e-books with integrated audio for a pre-k program. The main challenge is to keep abreast of new technologies and grab emerging opportunities,” says Singh.
Year 2009 marked Thomson Digital’s foray into the Indian educational market. “We have successfully developed a series of elementary textbooks for leading schools in Delhi. So far, we have launched 15 titles in science and English and will be working on other subjects such as math and social studies,” says executive director Vinay Singh, who recently opened a new 28,000-sq.-ft. facility with a 350-seat capacity. This additional space, he adds, is “critical to our success in branching out into new media services, content design and development, and other value-added solutions.”
Thomson Digital also ventured into the magazine segment last year. “This is an emerging, and largely untapped, segment. With several magazine publishers considering outsourcing some of their production processes to cut costs, we decided that it was high time to go in. Additionally, our capabilities in such languages as French, Dutch, Spanish, and Italian would give us an edge. We have completed projects in as little as two hours for some of our magazine customers.” Over in the k—12 segment (as “the sluggish U.S. market has prompted us to explore elsewhere”), a 6,636-page reading program showcased the team’s mastery of the K4 system and project management skills. “We received tear-sheets as inputs and had considerable tracking to do although it was a reprint. We ended up with about 300 components and 900 files.”
With e-learning becoming an indispensable part of education, Singh is adopting it for in-house training. “We also combine our various expertise areas to develop an interactive editorial system for clients. Additionally, our new Media Services division offers multimedia educational programs and interactive whiteboard content that use proven instructional design methods. We want to offer a rich learning experience as well as a more self-directed e-learning system that allows students to choose tools and content that are appropriate for them. By capitalizing on our development, design, and language capabilities, we will add value to any content and assist publishers in producing new products for different platforms.”
Establishing credibility and building capacity is what Mumbai-based Tridat has been working toward since its inception five years ago. Working behind the scenes for major e-learning companies such as Tata Interactive Systems, LearningMate, Lionbridge, and NIIT, Tridat has leveraged each project to fortify its portfolio, business know-how, and industry expertise. Now this 150-strong company is focusing on expanding its B2B model by going direct to end customers, both local and international.
Cofounded by directors Ebrahim Mookhtiar and Praveen Rodrigues, Tridat’s vision revolves around providing dependable and scalable B2B services to local IT-related companies. “India’s e-learning market is driven by big players; but even for these established firms, resource requirement is often unpredictable. This has led them to develop and nurture dependable vendors like us to assist their project team,” says Mookhtiar. “To differentiate ourselves from the many new e-learning setups in the marketplace, we created a highly scalable work model that is achieved through a standardized and automated workflow, as opposed to increased production capacity as is often the case in the industry.”
Adds Rodrigues, “We have our own training system that provides productive resources right from the get-go, and manage every project in a CMMI [capability maturity model integration]-compliant manner.” Tridat has developed and implemented the Enterprise Application Simulator training system for several private banks in India. This highly intuitive, robust and flexible system can be customized for a multitude of industries.
“Over the years, we have grown from a software development and e-book publishing company to one with proven e-learning expertise. We are equally strong in programming and design. For any e-learning project, you will find our multimedia and graphics team working alongside technologists to deliver the best solutions possible,” says Mookhtiar, who is looking forward to creating localized adaptations of popular international training materials as well as providing content for the k—12 segment. “At the same time, we are strengthening our content writing and instructional design expertise.”
This year, CEO A.R. Nallathambi is focused on digitization projects from both domestic and international markets, and he anticipates a twofold increase in imaging-related activities from magazine publishers. In testing the reliability of Vikatan’s digitization system, “we are very lucky in that our parent company, Vikatan Publishing Group, has a diverse portfolio of magazines, newspapers, and books that we could use for trial runs. We ran our 80-year-old archive through the system and worked out the kinks. After several rounds of adjustments and test runs, we have a foolproof workflow that can be customized for any product. While I’m not in the position to compare our system with our competitors’, I can say that this is one of the best applications that I have seen in the marketplace in the past decade.”
One major digitization project arrived recently that requires both XML and e-book deliverables. “Each of the e-books is to be provided as a nonduplicable one-off installation. So security is the key feature of this project. Once uploaded, the e-books are ready for online purchase, with each successful transaction prompting automatic generation of keys for installation,” he adds. “This project involves over 500 staff working on more than 10 million pages. We expect to finish it by the end of the year. Another 50 million pages are in the pipeline.”
For Nallathambi, the most promising trend in the publishing industry is the move to make content available online in XML and e-book formats. “We started offering e-book conversion a couple of years ago when interest in e-books picked up significantly. So far, most of our e-book projects are from medical publishers, and the trend is to convert books and journals—both front- and backlists—into ePub files. Given the recent excitement surrounding iPad and its ePub support, we are looking at even more conversion projects for this format.” Needless to say, Nallathambi has been busy beefing up training to meet growing XML enquiries and ramping up capacity for a 30% growth in revenue from this segment this year.