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Interview with Russell Reeder, LibreDigital

For our company profile today, we spoke with Austin-based LibreDigital (www.libredigital.com) is a local technology firm which develops software used for digital publishing. Russ Reeder is President and CEO of the firm, and told us more about what they do and their customers.

What does LibreDigital do?

Russ Reeder: The company started about 10 years ago, as NewsStand. The whole idea was to help put published material on digital devices. The only problem was--digital devices weren't there yet. What we actually focused on was newspapers, and digitizing newspapers to put them online. About three years ago, we created a division focused on the book publishing space. We would take in books, digitize those book, and distribute them to any device--secured on demand--based on a publisher's rules. We started on the newspaper side and magazines, and now we've grown up. They brought me in about six months ago to take advantage of the two different divisions, NewsStand, and the LibreDigital division. We've brought those two together, and now we're focused on all things digital. All digital content, all things published--whether that is a magazine, a newspaper, or a book--and we provide a warehouse for the publishers to store, and deliver all these to the new e-ink devices out there.

Why do customers need your product--can't they easily convert their books to digital form?

Russ Reeder: It's not like an MP3 player, where you can RIP a WAV, or turn it into an MP3, and it runs on every device. We convert the PDF to XML, so you can free flow to any device, whether that's an iPhone, a Kindle, or the Sony E-book Reader. It's a complex conversion, and we have proprietary technology that helps with that conversion. Harper Collins, for example, which is a customer and investor--their CEO is on our board--uses us specifically so they don't have to go to Amazon, Google, and every device out there and convert to their specific format. Instead, you drop off your content, set the rules on where you want that content to be delivered, and on the fly, we convert it to the specific standards for that device. Otherwise, it's very complicated. Take Amazon, for example. If you look at a book online, you have the "Look Inside" function. We provide that for our publishers--seven of the top ten book publishers use us to provide content to Amazon. However, if you want to buy that book, you may not know it but it might be print-on-demand, which is a whole other division in Amazon. With their print on Demand Division, it's another file type required to send to them to print. Then, there's yet another side, which is the Kindle, where you have to send a whole different set of files to the Kindle. And that's just one company, HarperCollins. Our other customers also have to send all three different file types. So what we do, it we take that file one time, and distribute it based on the rules for any device.

Given your position in the industry, where do you think digital publishing is right now as an industry?

Russ Reeder: It's starting to take off, but I don't think we're at the tipping point yet---at least until you see one hundred dollar devices, which I think is probably about a year away. That will be the tipping point. However, you wouldn't want to start a company at the tipping point, you want to have the leverage, and reputation, and experience before it blows up. However, the growth we are seeing right now is exponential. We have publishers like Harlequin Mills, who are seeing tremendous success with e-books. Maybe it's because people don't want to have their Harlequin book at the office or an airport, but they can have it digitally. Or, they don't want a large font book on their desk, but with a ebook you can raise the font to any size. For all of these reasons, it's a market that people are hitting, and people are paying a premium to have--it's more than just business travelers. It's the users with special interests, special needs who can't just do this with print. In an industry, such as the publishing industry, which is seeing flat growth, plus a recession, there's 35 percent annual growth in the e-book world. That's the piece we're focused on.

Is there much competition in this space?

Russ Reeder: There is Ingram, one of our competitors--and there's a very large competitor called Google. Google will help you convert your books, but just for Google. We also somewhat compete with Amazon, although we're also a partner with them. With Google, they are backing up their truck and scanning the contents of your book, but they're only doing it for Google's benefit. Google is scanning books and converting them, but Google is not distributing those to Amazon, Sony, or others--you can only search within Google. The same with Amazon--you can send in your book, and they will scan it for you, but they're not going to allow you to monetize on any device except the Kindle. Publishers don't see any benefit to their entire marketplace by getting their content to any device, or to their own web site. If I send my content to Google, I can't sell that on my own site. If I send it to Amazon, you can't sell those books unless you use LibreDigital.

We convert the content, allow you to sell it on your marketplace. For example, you can go to Harlequin, and download their e-books, which is DRM-wrapped through Adobe's latest DRM. We deliver it to your customers, based on the marketplace, rules of the publisher, and based on the device you are using. You can also sell it on sites like Barnes and Noble--which is interesting, as many book publishers prefer the Barnes and Noble approach, where content is actually stored on our repository, and that content is coming from our server. That way, the publisher doesn't have to give their entire PDF to Barnes and Noble, and a publisher can maintain control that way.

Speaking of Google, what do you think of their recent settlement with publishers over book scanning?

Russ Reeder: I think it's best for Google, but not for the publisher. It's become a huge PR tool, on how they benefit a publisher--when you think about it, the only benefit is if you want to show your content on Google. People are going to be reading your content on all kinds of devices, and buying your content on all kinds of websites. If you want to sell your content on Google, then it's great. But if you want to sell off your web site, on other devices, it's not so good for you.

What's behind the many recent executive hires?

Russ Reeder: It's because we're growing, and we're closing more deals. I think publishers are really understanding the need to maintain control of their digital file. Even in the recession, our business is booming.

How big is the firm now, and how many people do you have here in Austin?

Russ Reeder: We have 100 employees in Texas, about 7 people in New York City, and a couple in London.

Finally, why should publishers be working with LibreDigital?

Russ Reeder: Most publishers are going with us for two reasons. Number one, is when you go digital and secure with us, we can also help them with things like widgets, marketing tools, and increased print sales--it's not all about e-Books. The work they do preparing for e-books help them monetize, and increase revenue for existing print products. The first step, which has hard ROI, is getting books so that people can find them, can read them, or browse them online, and help to increase the print sales of the book. In the process of doing that, you're getting prepared for an increased e-book landslide.