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Then the publishing world is way behind the times.
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It is. It definitely is ...
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So I do not believe that there are no existing electronic formats for most books published over that time period.
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Sure, PDF optimized for print, which is the least favorite format you'd use to create an ePub or Kindle eBook. You won't believe how many publishers (or authors) simply deleted any DOC or RTF after the PDF was created. So silly ...
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Yes there are other programs that will read in Word files and output html.
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Sure, there are. But it is still your craft and your very own two eyes which get the job done. Never rely on software when you can do better yourself.
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Even if that cost is $800 per book (one full person day fully costed at $100/hr) it is insignificant when split over the number of units sold.
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Definitely right. But still $800 (in your example). Quite some money for small press publishers if they want to offer their whole product line. Not for the big companies, agreed.