Technology Once Again Transforms the Audiobook Market

A commuter driving on the freeway. A businessman riding the subway. A stay-at-home mom exercising on an elliptical. If there’s one thing they all have in common, it’s that they can listen to an audiobook while going about their business.

From self-improvement and personal finance to blockbuster fiction titles and biographies, the audiobook market is booming. Sales neared the $1 billion mark in 2006, and with increasingly busy lifestyles and the rising popularity of personal audio players, the industry is poised for continued growth.

Bringing Books to Readers With Technology
A 2006 survey by the Audio Publishers Association (APA) found that nearly 25 percent of the U.S. adult population listens to audiobooks. According to the survey, these listeners tend to have higher incomes, more education and read more books than non-audiobook listeners, and almost 35 percent of them have an iPod or MP3 player. Audible.com Senior Vice President and Publisher Beth Anderson says that audiobook listeners are actually avid readers that use the multitasking opportunities presented by audiobooks to consume more books.

“There is sometimes a general perception that people who listen to audiobooks are lazy or not good readers, who are somehow taking a shortcut. It’s exactly the opposite, and they generally just want to fit more books [into] their [lives],” says Anderson.

Audiobooks date back to the 1930s, when they were used on turntables to provide books for the blind. With the development of cassette recorders and players, audiobooks became more popular, and expanded into libraries in the 1960s. Within two decades, the industry became mainstream, bringing fiction works along with self-improvement titles and lectures to tape. The advent of compact discs expanded the market further, because more information and larger books could be put into smaller packages. In 1987, the APA was founded to increase public awareness of the audiobook industry through publicity efforts, consumer surveys, trade shows and the Audie Awards competition.

As a market significantly impacted by technology, audiobooks have evolved from records to highly compressed digital files that can now be downloaded directly from a publisher’s Web site. Anthony Goff, publisher/director at Hachette Audio, says that audio publishers need to stay on top of new technologies, and that new formats are always emerging. While CDs remain approximately 85 percent of Hachette’s business, Goff says that many consumers still listen to cassettes, while even more are moving toward digital files. Keeping an eye on the future, while still producing current formats, calls for versatility.

Dan Balow, associate publisher at Oasis Audio, says that what’s selling at electronics stores may ultimately dictate the format of audiobooks. Although a 2006 sales survey by the APA showed that 77 percent of audiobook sales were on CD, downloads are rapidly increasing, and are expected to be the preferred format of the future.

“It’s pretty much accepted across the publishing industry that at some point, the majority of sales will occur as downloads instead of visible product sales, whether that is three, five or 10 years from now,” says Balow.

Big Productions Behind the Scenes
Many audiobooks carry retail prices that are significantly higher than that of the print versions. A downloaded audiobook that requires no packaging, distribution or shipping may appear to have a higher profit margin, but audio publishers say that production costs can be high. Whereas a print book involves a writer and a team of editors, an audiobook expands on that with sound production and narration that may include guest speakers, musicians, high-tech recording equipment and time at expensive recording studios.

“There is very high production value in [the blockbuster-type] books. We really take care of them, and make sure that they’re well-produced and have all of the effects,” says Goff.

Large audiobook publishers that distribute their books via download must also maintain entire departments to deal with issues that most print publishers will never experience. Hefty investments must be made in servers and computer equipment, and technical staff must be hired to maintain the Web site and handle customer-service calls related to downloads and compatibility. Even though CD-duplication costs have come down in recent years, producing and packaging a 10-disc book can carry hefty expenses.

Anderson says that one benefit of the digital format is that publishers can work with books on both the long and short end of the scale. For purposes of distribution and packaging, it doesn’t matter if a book is 10 minutes or 10 hours.

“In the digital world, you really don’t have to worry about those manufacturing constraints, and you’re less limited by running times,” says Anderson.

Rapid Growth in the Industry
The 2006 APA survey revealed audiobook sales of $923 million, a 6-percent increase over 2005. Direct sales to libraries, representing 32 percent of the market, are closely followed by retail sales as being the largest sales channels for audiobooks. Sixty-nine percent of sales are in the fiction category, and 71 percent of the sales are unabridged books.

Goff notes that because audiobooks are intricately tied to technology, their marketability is growing as personal music devices such as iPods become more popular. Such devices used to be more of a youth-oriented product, but people of all generations now see MP3s and digital files as a convenient and cost-effective music medium. And just as newspapers and magazines have recently expanded digitally with podcasts and other Web 2.0 applications, book publishers are learning to take their product to the digital audio world.

One problem that the growing market has experienced is finding the right price point for downloaded books. Because it is an intangible product, consumers generally expect lower prices. Some Web sites offer subscription-style services where, for a monthly charge, members can download a specified number of books each month. Audible.com offers a monthly service for $22.95, where members can download two books per month.

William Anderson, director of sales and marketing for Naxos AudioBooks, says that the industry is still trying to figure out what the appropriate price points should be for downloads. “There is this feeling that since you didn’t have to put it in a box, since you didn’t have to ship it, that it should be cheaper. But what is that price? There is still cause for concerns on what is fair to the publisher, the writer, the distributor and the supplier,” he explains.

Audible.com’s Beth Anderson says that one of the biggest benefits of digital is that it offers an instant and direct route to the market.

Piracy a Challenge
Ironically, the technologies that make audiobooks so marketable are the same technologies that make them so vulnerable to copyright infringement and unauthorized use. Scanning or copying a 200-page print book can be a tedious process, but anyone with a home computer can burn audio files to a CD or even upload them to the Internet for mass distribution.

Goff says digital rights management (DRM) controls are used to prevent some CDs and files from being copied or duplicated for fear of theft, and many audio publishers do not publish their books as MP3 files, which can easily be replicated.

“We just can’t offer our books unprotected at this point because one college student might buy it, and another 300,000 would download it. It is something we think about all the time,” says Goff.

The downside of protecting content with DRM is that it gives consumers fewer choices and control over the products that they buy. DRM-protected materials may not work on or be compatible with certain MP3 and audio devices.

William Anderson, however, says that, unlike in the music industry, where there is a huge market for cheap, pirated songs and albums, there just doesn’t seem to be an urgency to steal literature. Taking a leap of faith on that thought, Naxos has released all of its content without DRM.

“You can put it on any device, and I think that is what the consumer really wants. We certainly see some direction and change in that, and a lot of people are interested in audiobooks that they can use anywhere,” he says.

Craig Guillot is a New Orleans-based writer who has written for such publications as The Washington Post, San Francisco Chronicle, Stores Magazine and NationalGeographic.com. You can read more about his work at www.CraigGuillot.com.