Guest Column: The Price of E-Popularity
The major objection to a comparison to the music industry is in the duration of the experience. Although a record album traditionally fills a CD, most music consumers are interested in one particular song at a time, which has led to single-track downloads and the decline of the "album" concept (and CD sales). Audio-book listeners, however, routinely commit to eight to 10 CDs' worth of a story; a single track is useless to them.
So, for the differences: We've added value to the book experience, and we have a longer run-time than music.
But Like the Music Industry and E-books …
How are we similar to the music and book models? Like music, audio books have been available for download for more than a decade, playing on the same devices as music downloads. And like e-books, audio-book downloads offer instant purchase and a reduced price thanks to eliminating print and distribution from the fixed costs.
Those two words—"reduced price"—I believe represent our biggest challenge. As the APA reported in its recent "Sales Survey" (released in June 2010, with data from 2009), audio-book consumers purchased 900,000 more audio books in 2009 than in 2008. That's a 4.7-percent increase in audio-book unit sales. Unfortunately, that resulted in a 12-percent decline in publisher net revenues, due to the lower prices on downloads (and some price decreases overall).
So while we're grateful for the growing interest in audio books, we're challenged by the changes lower pricing will require in our companies. Like the print industry, the audio-book industry is built on a model of shipping hard goods (and accepting returns months later). However, we have a higher production cost before we even enter the sales stream. So how do we cover that cost, when the average digital price is half the retail package price?