Audiobooks: Adapting To Digital Age
... Price Wars & Multi-Media Options
By James Adams
Founder & CEO, BeeAudio
July 18, 2010
I was browsing through some CD versions of audiobooks the other day and was struck by the prices, which are often more than double that of a book.
At the same time, a price war has broken out among the two principal players in the eReader market, Amazon's Kindle and Barnes & Noble's Nook.
First, the Nook's price comes down from $259 to $199 and then the Kindle drops its price from $259 to $189.
This leaves Sony's eReader as an outlier, but it is clear that its price will have to come down as well.
The exception to this downward spiral is Apple's iPAD, which has far more functionality than any other competitor and is well over double the price.
WHERE'S IT GOING?
What does all this mean?
First, industry predictions are that the price of eReaders will drop to below $100 by the end of the year.
The question then is whether or not Apple will have the market to itself and be able to sustain its lock on the top end of the field.
In the short term, Apple's position is strong, as they have sold more than 2 million iPADs in the first couple of months - and that's a lot of people committed to one solution.
However, market forces always prevail. While the iPhone continues to do very well, Google's Android is closing the gap, and in the long haul my money's on Google.
Just remember what happened to Apple with the Mac back in the last century when they had the coolest and best product - and then IBM, Sony and everyone else ate their lunch with Microsoft's software solutions.
There are a ton of new tablets on their way that will compete directly with Apple, and they will all use Flash and have an open operating system that will be reflective of current reality rather than Steve Jobs' paranoia and obsession with control.
DOWNLOADS WILL RISE
If eReaders cost less than $100 and the cost of a Tablet is driven down to around $200 or less, it is very hard to imagine that anyone is ever going to spend $35 on an audio CD.
It seems inevitable that the pre-packaged CD will go the way of VHS and vanish to museums as a passing consumer fancy.
Instead, digital downloads are already where the action is, and that is where the market will continue to grow.
But here, as well, there are real pressures both on price and the nature of the product.
While the eBook market is very strong - 6.6m downloads expected this year compared with 3.1m last year - competition is fierce, and every vendor is seeking a way to discriminate product in the crowded market.
LIKE DVD DIRECTOR'S CUT
For example, check out David Baldacci's latest potboiler Deliver Us From Evil in its eBook version. This is rather like a Director's Cut version of a DVD, as Baldacci has included:
Baldacci is unusual among authors in that he has truly embraced the eBook concept and he also has an excellent understanding of marketing.
It's interesting to note that two eBook success stories, Baldacci and thriller writer James Patterson, who recently became the first author to sell more than a million eBooks, are both published by Hachette.
In the same way that eBooks are offering more than just the finished text, so audiobooks will have to adapt.
That will mean tiered offerings of the 'standard' audiobook and then an 'enhanced' and slightly more expensive version.
This will apply both to downloads and to apps, and will create a truly multi-media experience.
FOLLOWS YOU EVERYWHERE
For the educational market for example, students will download an audiobook to their reader or other device (and soon enough every form of eReader will have greater functionality than right now, and many schools will choose to distribute them to every student instead of buying expensive books).
The audio version will sync perfectly with the text version, so that as you move from car to house and a different way of accessing the data, the device will know exactly where you are in the book.
There will be tools for:
The self-publishing market is leading the way because they tend to be more nimble than the more traditional publishing houses.
Amazon is taking a strategic position in the market through its acquisition of Audible and Brilliance, as well as Jeff Bezos's investment in 37Signals.
Amazon and Barnes & Noble are both offering self-publishing opportunities.
A newcomer, Folium Partners is developing a Storefront solution that will allow authors to choose from a menu of audio, enhanced audio and apps with instant and inexpensive access to iPhone, iPad, Android and others.
All of this suggests some pretty clear strategic signposts for anyone in the audiobook business:
1. CDs ...
CDs as a business model is collapsing. It's not completely over, but it does mean that any audiobook business must have multiple outlets (CD, library, downloads).
2. Fallout ...
As the dust begins to settle, there are only going to be a very few large players left standing (Amazon, Barnes & Noble, Google, one or two others).
3. Rights ...
The buying of rights and the selling of product will become an increasingly high risk business as prices - and thus, margins - get squeezed.
4. Scale ...
Scale will be everything. Small operations will disappear as it becomes too expensive to compete.
5. Marketing ...
While content will remain king, brand will be the market differentiator.
Without a massive marketing budget (eg, Audible's reputed $1m a month on Google key words), it will be impossible to rise above the noise.
6. Technology ...
Technology, and not talent, will decide who wins. There's tons of talent out there, but it is how it is used at an affordable price that will allow for margin.
7. Cross-Selling ...
Every author will become his or her own brand, which means that synergistic cross-selling through all media will be vital for success.
8. Multi-Media & Apps ...
The simple audiobook (just reading the edited text on the page) is soon not going to be enough.
That means either the audiobook publisher or the audio creator must be closely allied to those with outstanding software solutions for apps, content aggregation and multi-media solutions.
9. Survival ...
Only the nimble will survive, so rapid decision-making in the face of changing market forces is essential.
10. Accept Change ...
Create a culture that welcomes change.
ABOUT JAMES ...
James Adams is founder and CEO of BeeAudio, an audiobook publisher offering fixed-price digital service and a voice talent pool of 40 narrators. Adams is a former Managing Editor of the London Sunday Times, CEO of United Press International, founder and CEO of iDEFENSE - a cyber intelligence company, board member at the National Security Agency and NCIS, author of 13 bestselling books on warfare and intelligence, and is currently chairman of ADRevolution. This article is reprinted with permission from a recent BeeAudio newsletter.