First off, I'm a retired librarian, archivist and experienced in digital imaging and PDF creation (scanning, photography, PDF creation, POD publishing) both as a profession and as a hobby.
So how does General Books and other similar setups do their stuff? Easy. Download a pdf from Google or the Internet Archive. Process through Acrobat (sorry, I'm not going to go into the specifics as that would simply further propagate the whole ripoff system) to create a relatively clean PDF. For an ebook, if it's not already available, run OCR through either Acrobat, ABBYY FineReader, LuraSoft or your OCR engine of choice. Extract the text layer and send your book to a Print On Demand outfit and presto, you have a flawed book.
Or, simply extract and clean the Google Books or Internet Archive pdf, create a new document in a desk top publishing program (complete with facing margins, gutters, margins, etc), Distill it in Acrobat and there you go, a press ready pdf for your POD printer of choice.
For the record, I do quality facsimile reproductions of books and journals... All from material in my personal collection or as a consultant. Let me tell you, no one and I mean no one could possibly produce as many titles as General Books, or any of the other multitude of scams out there and still make any money at it. It takes an inordinate amount of time to image, proof, photoshop, compile and edit a book. And... I do some books from scratch on my own and some I send out to a service for digitizing to TIFF, from which I produce the reprint.
Take a look at ABE.com and you'll see the rampant spread of this new scam. I do predict that, given time, these companies will fail and disappear from the books marketplace.
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