MP3 Audio Is the Next Big Thing. Unless It’s Audiobook Suicide.
The average Los Angeles motorist now spends 136 hours per year sitting stock-still in traffic, according to the landmark Texas Transportation Institute study, and audiobook publishers are thrilled. Indeed, the apocalyptic fate of our nation’s highway infrastructure is rehearsed by audio industry brass with barely repressed glee: 97 million people in America commute to work by car, up 15% over the last decade. Mean travel time to work has grown to 24.3 minutes each way, up 7% from 1990. And New York’s rush-hour delays — a breeze by LA standards — clocked in at a soul-crushing 73 hours per year.
This is extremely gladdening, of course, because nearly 60% of audiobook fans log most of their listening hours in cars, according to the Consumer Electronics Association and its eBrain market research division. Gridlock has gotten so good, the study concluded, that audiobook compatible in-dash systems could pump up sales by almost 15%, kicking the US audiobook market, which is conservatively estimated at $400 million, into overdrive. So honk all you want, folks, because what was not long ago deemed “the most underpenetrated segment of publishing” may be on the cusp of a listening revolution.
“Audiobooks are still growing at a faster rate than print books,” explains Eileen Hutton, President of the Audio Publisher Association. “There’s an incredible amount of interest in the audiobook industry by personal stereo manufacturers, especially those in the MP3 market.” And anyone familiar with Napster knows that MP3 allows more content to fit on one CD — up to 20 hours of spoken audio — than ever before. That could mean lower price-points for audiobooks (ditch those 14-cassette titles) and more fun for the consumer (download Jack Welch direct to your hard drive). The problem is that MP3 players currently have a dismal market share. And the vanguard of today’s audiobook consumers have only recently warmed to the idea of books on conventional CDs. But in the paradoxical land of audio, bad news breeds optimism, and by some measures the audio industry’s pursuit of revenue opportunities, courtship of device manufacturers, and focus on “unprecedented convenience for consumers” makes the audio biz a model of growth that print and ebook divisions can only dream of.
The Aura of Audible
If you’re looking for optimism, you can’t do better than this: digital audio pioneer Audible, Inc., which downloads audio files directly to consumers’ computers, may one day earn a profit. “What Audible has done is created a more convenient channel of distribution of the audiobook product,” says CEO Don Katz. “But it has also created like-minded audio products based on a pre-branded and desirable piece of media. There was never really a way to get the Wall Street Journal into someone’s drivetime before we invented it.” Katz is referring to exclusive audio digests of the WSJ, along with other options such as The New York Times, In Bed With Susie Bright, and a virtually unlimited supply of old NPR programs. All told, there are 6,000 audiobooks and 14,000 other programs that can be downloaded to MP3 players and even burned onto a CD. (To avoid the Napster effect, the company limits playback of audio files to specifically identified personal computers and hand-held digital audio players.) Audible is also flogging its “AudibleListener” program, which allows a customer to choose one audiobook and one periodical every month for $14.95 per month — and they’re throwing in a free Otis MP3 player with a 12-month subscription. Titles are typically priced at about 30% less than the same audiobook on cassette or CD, and discounts can reach the 80% range. “Most importantly, we’ve got over 200,000 paying customers who have taken on habitual listening to this product,” says Katz. “Half the customers who have become dedicated users through Audible.com had never used audiobooks before.”
“The MP3 CD has taken off,” adds Paul Coughlin, Sales and Publicity Manager for Blackstone Audiobooks. Coughlin cites the format’s high-quality audio and price savings for unabridged audiobooks. He also predicts that DVD players will before long be standard equipment in cars (put Junior in back and pop in Terminator 2), and those players are MP3 compatible. Of Blackstone’s 2,000 titles, over 500 are available on CD, and 300 are out on MP3 CD. This summer, the publisher will begin offering digital downloads from its website, and “we see an increase every year in both the rental market of audiobooks,” says Coughlin, “as well as purchases from libraries.”
To be sure, libraries are fast becoming a proving ground for digital technology, and other audio publishers report that their library sales have been “growing exponentially.” In what was touted as “the first such deals by a major US trade publisher,” HarperCollins said last week that the publisher’s PerfectBound ebooks would be downloadable and circulated to patrons over the Internet, via distribution from netLibrary and OverDrive. Buried in the press release was the detail that OverDrive’s library package would support digital audio as well. This March the Cleveland Public Library, for example, debuts its digital media collection, which can allow audio downloads directly to patrons’ own devices. (Titles expire on the borrower’s computer at the end of the loan period, and can then be recirculated.) Library Deputy Director Sari Feldman says they’re also creating an online library card to attract “a large market of people” who don’t physically use libraries, but would happily download from home.
Audible now works with 50 library systems, among them the Kalamazoo Public Library, which circulates Rio MP3 players pre-loaded with an audiobook. Library Director Saul Amdursky says he downloads titles according to consumer demand: “If you come into my library and say you want Airframe, you wait while we download it first to our computer and then to a MP3 player. You go away satisfied immediately.” An even more ambitious program has launched at Washington State’s King County Library System, according to Bruce Schauer, Associate Director for Collection Management Services. The library purchased 200 Rio players and picked up 15 titles for its initial “eAudio” collection, and soon added another 400 audio players, with management begging Audible for some way for cardholders to download content directly to their own player.
Cutting Your Own Throat?
Traditional publishers aren’t so sold on the MP3 marketplace. “We can adopt all the technologies we want,” says David Naggar, President of Random House Audio and Diversified Publishing, “but the bottom line is, you’re looking for a consumer to make a purchase. As an industry, we haven’t even made a full implementation to CD, because the consumer isn’t ready.” More than half of Random’s audio sales are still on cassette, he notes. And too many formats can be “hurtful to the industry,” because retailers with scarce audio shelf space don’t know which one to choose. “If you all of a sudden add a third format, you’re basically cutting your own throat,” says Naggar. Such caution may reflect lessons learned from the Random House Audible imprint, with Internet distribution of audiobooks exclusively by Audible.com, in which it has an investment.
“It’s sexy and cool to be talking about MP3,” adds Carrie Kania, VP, Associate Publisher of HarperAudio, “but we’re just losing sight of our main focus — giving audiobooks the best possible representation in bookstores.” Shelf space in stores hasn’t kept pace as the audio industry has grown, she says, and that hurts backlist sales. And Gilles Dana, President and Publisher of Simon & Schuster Audio, says he tested the market with Stephen King’s The Talisman as a MP3 CD, partnering with Borders to sell the disc set both in the audiobook section and in the music aisle. Priced at $49.95 (well below the $75 CD set), it seemed like the perfect way to grab all those early adopters. Would he do it again? “Not tomorrow,” Dana says. “I don’t think the audience is ready for it yet.”
Still, many in the industry are warily eyeing music-based services such as Pressplay, MusicNet, and RealNetworks, lest they too bound into the downloadable spoken audio market. And MediaBay has recently announced the strategic decision to “aggressively grow our Audio Book Club membership by expanding our targeted direct mail campaigns and Internet marketing efforts,” counting a customer base of over 2.8 million spoken audio buyers. Flush from the acquisitions of audiobook clubs at Columbia House and Doubleday Direct, MediaBay is now rolling out niche audio clubs, including he already successful Christian club Audio Passages, and is salivating over self-help, mystery, and Spanish club opportunities. Then there’s the company’s new monthly “Digital Audio Subscription Service,” allowing users to download up to 20 hours of content each month — including audiobooks — for $9.95.
The folks back at Audible, trying to stay one step ahead of the game, have been in market trials with AT&T Wireless for downloads right to your earpiece. From Katz’s perspective, it’s just one more way to get books into whatever future is coming down the pike. “It’s in its early stage, but so was the paperback book and other new innovations that are now the bread and butter of the publishing industry,” he says, ever the investor-visionary. “Audio represents a transitional opportunity for a print product to become part of the look and feel of everyday life.”
