Saturday, July 02, 2005

What does it mean when we can listen to something instead of reading it?

And how will the role of the written word change?

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iPod to the Rescue: Can Digital Audio Save Publishing?
June 29, 2005
By Rachel Deahl

At the South Huntington Public Library in South Huntington, N.Y., one of the most popular programs doesn’t involve books (in the strictest sense), or even reading (in the strictest sense). The big hit? Books on iPod. Library director Ken Weil says the branch purchased 14 iPod Shuffles in March that members can check out with pre-downloaded audiobooks. (And no, they don’t play the chapters in shuffle mode.) The iPods, Weil says, are “always out.”

That folks can pick up a gadget approximately the size of a cigarette lighter at their local library, programmed with a current bestseller for their listening pleasure, is the realization of countless sci-fi movies and Philip K. Dick novels. The future has clearly arrived: Apple’s immensely popular iPod—the software company shipped 5.3 million of the variously priced and sized devices in its second fiscal quarter of 2005 alone—is making consumers more comfortable with the idea of downloading audiobooks and listening on-the-go. So could DABs—which are more accessible, hip and cost-effective than traditional formats like cassettes and CDs—be the next big thing?

“[Digital audio] is the fastest-growing area of publishing,” says Lori Bell, head librarian at Mid-Illinois Talking Book Center in Peoria, Ill. “Books have stayed the same, but the audio publishing industry is the only one that’s really growing quickly.” For an industry constantly confronting the fear that it is thoroughly invested in a dying product, the growing popularity of DABs may point to salvation, promising to bring in younger, and more, consumers.

“Our download sales have gone up steadily over the course of the past year or so,” concurs Chris Lynch, executive vice president and publisher of Simon & Schuster Audio. “There’s definitely been an increase in [digital downloading of audiobooks], whether it’s to iPods or other devices like smart phones.” Such devices, says Steve Potash, CEO of OverDrive, one of the major distributors of DABs to libraries, are “changing the landscape [of the audiobook market] dramatically.”

One of the companies basking particularly comfortably in the success of DABs is Audible. The leading provider of spoken-word audio, Audible partnered with Apple in September 2004 to sell digital audio titles through the software company’s popular online music store, iTunes. According to David Joseph, Audible’s vice president of communications and strategy, 14 percent of the company’s revenue in the first quarter of 2005 came from purchases through iTunes.

Audible, which saw revenue of $34.3 million last year and attracted 72,000 new customers over its last fiscal quarter, is watching as the audiobook market expands in dramatic fashion. “We’ve been providing digital audio since 1997,” Joseph says, “but we haven’t seen accelerated growth since the last several years.” The way Joseph see it, these devices are “freeing” spoken-word audio in as dramatic a way as “printers freed text from computers” a generation ago.

Although iPods remain a top choice for downloadable audio (Lynch says he has seen a “noticeable” increase in the sale of digital audio since Audible partnered with iTunes), other gadgets are coming into the fold. Audible, for instance, allows users to download titles to 135 different devices including PDAs, pocket PCs and smart phones.

While cassettes were eclipsed years ago by CDs as the popular format for audiobooks (Lynch says publishing on cassette has become “more the exception than the rule”), the digital format offers even more advantages than CDs (which often, like cassettes, require consumers to deal with multiple discs to listen to a single book). Currently, one of the most attractive aspects is their price: often nearly 40% less than traditional audiobooks. With the lower price may come younger, first-time buyers. “In general, I think price is not a huge deal for our regular customers,” says Lynch. “But I think it is for people who are new to the format.” Lynch says that although Simon & Schuster Audio isn’t approaching its list yet with an eye toward titles skewing to younger listeners, his team is “paying close attention” to how titles geared to younger demographics fare.

Hilary Rubin, an audio rights agent at Trident Media Group, says that she’s seen a shift in the sale of audio rights for YA titles over the past few years. “I think there’s a direct connection to iPods,” she says. “Publishers are starting to see there is a market for this.”

In addition to YA titles, Rubin says, there is also a market for DABs geared to 20- and 30-somethings. Citing successes like John Stewart’s America the Book (Rubin’s agency reps the comedian/author), which sold very well in digital audio, Rubin thinks the audiobook market is accepting the idea that younger listeners are out there. “Warner did a lot of youth-targeted promotions for [America] and younger generations were buying that book more than 60-year-olds. I think this proves that if you market to younger readers, they’ll buy.”

Audible is also recognizing the potential market for DABs among younger consumers. The company is launching Audible Education in the third quarter of this year, through a partnership with the textbook publisher Pearson, to make inroads to the college market. As part of the deal, Audible will produce 100 audio study guides to be sold alongside the print editions of Pearson’s textbooks. The guides, which are to include chapter reviews and other information, will essentially allow students to listen to their homework while doing laundry or working out.

In an additional effort to bring digital audio to another audience—romance readers—Audible will be rolling out a 72-title program with romance-category leader Harlequin. The titles, 35 of which will be new releases (Audible will be producing the audio tracks for these editions), will all be available in digital audio for the first time.

Of course, younger readers aren’t the only ones flocking to DABs. Older readers, who were always considered the main demographic for books on tape, are also warming to the idea of downloading titles. And one place they’re finding DABs is at their local libraries. Along with South Huntington’s Books-on-iPod program, similar initiatives have become mainstays at libraries across the country. In one of the more publicized DAB programs, the New York Public Library announced on June 6 that it would be offering downloadable books through its website. (Piracy concerns are addressed by all the files being copy-protected and designed to “expire” in 21 days.)

Potash, whose OverDrive launched last year and is now one of the major companies providing libraries with digital audio, witnesses thousands of OverDrive users download audiobooks each month. Positing that since the library market typically skews to an older audience, Potash believes that the core group of listeners who once enjoyed the traditional, clunkier versions of audiobooks have gone digital. (A poll conducted recently by the Denver Public Library, for instance, showed that the most significant member group checking out its DABs was made up of consumers age 44 or older, with a third of them listening to the files on their computer.) “You can’t really pigeonhole the listening group,” Potash says, “but a mainstay of it is 40-plus and people looking for drive-time [books].”

As more consumers start downloading digital audiobooks, and more retailers start featuring them, the sky seems to be the limit for this new market. (One indicator: Amazon, which currently sells DABs through a partnership with Audible, recently announced plans to launch its own digital audio store.) This kind of vast potential and unbridled enthusiasm is a rarity in the book business, and a welcome one. “We’re all at the cusp of this technology,” says rights agent Rubin. “Everyone is trying to figure out the best method for taking advantage of it.”

© 2005 VNU eMedia Inc. All rights reserved.

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