Launched in March 2011, 1DollarScan is an unusual business venture that allows anyone to send the company a physical book and they will scan it and send the customer a high resolution PDF for $1—but the physical book will be destroyed and recycled in the process. 1DollarScan is marking its second anniversary and CEO Hiroshi Nakano told PW, its business is growing quickly.

1DollarScan markets its services as an efficient way for businesses, institutions and consumers to digitize and archive important documents and to clear space used to store old books, paper and print documents and photographs. Nakano said the service has grown from scanning “tens of thousands of books in our first year to several hundred thousand books over the past year. ” 1DollarScan has about 20 employees based in San Jose, Calif.

The company uses a scanning technology called Fine Tune that it claims delivers a PDF with high quality resolution and color and also optimizes the PDF for reading on a variety of devices, from smartphones to tablets. The company has an informal affiliation—but no financial or legal connections—with Book Scan, a Japanese company that pioneered the business of scanning books and documents for personal use, which Nakano said is a huge business in Japan, where limited housing space forces people to discard old books.

However, the Authors Guild takes a dim view of their operation and Guild executive director Paul Aiken has called 1DollarScan’s services, “copyright infringement.” To the Authors Guild, anyone turning copyrighted print content into an e-book without the author’s permission is violating that author’s copyright. Nakano said 1DollarScan’s business model is based on Fair Use, that it digitizes books for the person who has purchased them and that the PDF is for their use only. He emphasized that 1DollarScan’s terms and user agreements prohibit the sharing of the PDF online and that users must sign an agreement to that effect, which is delivered along with the finished PDF.

The company also offers a “copyright management center” that it claims allows publishers and authors to list their publications and approve or disapprove of scans. How often authors/publishers actually use the center is unclear. Nakano said, “we do not scan the books if “the copyright holder” has registered in our copyright management center,” but he declined to say how often he has turned down a request to scan or how many publishers and authors have registered at the copyright management center. “We do not disclose this type of information, sorry,” he said, noting that “we have got only a few inquiries from a few publishers and authors but they have just asked and have not completed the registration process.”

Nakano said the company periodically checks online to make sure that its customers are not sharing the PDF files. He also told PW that 1DollarScan tends to attract “repeat customers” and emphasized that “we will terminate an account,” that is found to be sharing 1DollarScan files. However, he also said the company has never found any of their scans being shared. He emphasized that “we get questions but there has never been any legal action filed against us.”

Nakano also said the company wants to create business relationships with booksellers (he said 30% of their customers are online bookstores), publishers and libraries. The company allows customers to buy a physical book from a store and have it shipped directly to them for scannning. Indeed, 1DollarScan has a partnership called Amazon Direct, which allows customers to buy a physical book that will be shipped directly to 1DollarSan, scanned, destroyed (the spine is removed for scanning), recycled and the PDF sent to the owner. While the service is generally used to scan older books, Nakano said “even new books come to us, it’s proof that people want e-books.” He said he’s also interested in sharing customer data with publishers—which books people are turning into e-books and demographics of the consumer—and is also talking with libraries. Although he emphasized that it’s very preliminary, he said that in Japan some book scanning companies have “just started” talking to publishers about revenue sharing. “We would be happy to be a part of that discussion here,” he said.