Bangalore: Muppets of the American television series Sesame Street will come alive in digital books in the US on Tuesday, their format and technology driven by a little-known Bangalore-based publishing outsourcer, Impelsys Inc.

The company will also sell the e-books based on the popular kids’ series online, marking its debut as an e-retailer in a fast-growing industry.

That’s a big jump for a firm that started off in 2001 making compact discs, or CDs, to go with textbooks—by scanning hardbound copies on to a storage device for textbook publishers—at its Bangalore technology centre.

Business model: Impelsys team-members Kiran Kishan Singh,Vipin Chandran, Ulhas Anand and Sachin Nayak at its technology centre, Bangalore. The firm earns annual revenue of $10 mn from publishing. Hemant Mishra/Mint

“The effort is to create our own IP (intellectual property), not just be a service provider," said Sameer Sharif, chief executive of Impelsys, in a telephone interview. “There is a huge shift globally from print to electronic; we can leverage this transition."

Impelsys currently earns nearly $10 million (Rs46.4 crore) a year in revenue from just publishing.

Other publishing firms such as Aptara Inc., which has development centres in India, too, have built technologies for delivering digital content online as well as for e-readers, hand-held devices for reading e-books.

A spokesperson for Aptara could not be reached on Monday.

“Producing e-books is just a natural extension of their capabilities," said Vivek Shenoy, an analyst with ValueNotes Database Pvt. Ltd, a research firm. “E-books are emerging as a new revenue channel for publishers worldwide."

Indian service providers, however, need to offer peripheral services such as digital rights management and online distribution services to augment their current e-book offerings, Shenoy said.

The Indian publishing outsourcing industry, which remotely designs and lays out textbooks, legal publishing and other material such as corporate brochures, is expected to grow to $1.2 billion by 2012 from $660 million in 2008, according to a May note by the Pune-based ValueNotes Database.

It did not have an estimate specifically for e-books.

India currently employs around 35,000 professionals in the publishing outsourcing space and the number is expected to grow to 55,000 by 2012, it said.