One of my old favorite companies, Audible, has entered into an agreement with Amazon to be acquired for $300 million. While this represents a slight decline in their perceived value from their all time stock high, it assures the future for this pioneer.
I own dozens of Audible books. Not familiar with Audible? Think "books on tape," but digital. Years ago, before MP3's really took off and long before the advent of podcasts, Audible led the way by digitizing thousands of books, and offering them for download. For folks who had long commutes, this was a dream come true. Better, Audible also offered discounted players; my first MP3 player was a Nomad, thanks to Audible. Their file formats were not quite MP3's, but were much smaller; before the iPod, we actually considered file size! They went on to introduce dozens of innovations, including a subscription service (2 books a month for $20!), and multiple file formats, so you could choose audio quality over file size, and more.
They really hit the motherlode with three major advents:
- First, they recognized the demographic of their customer probably overlapped with NPR listeners, and capitalized by offering subscriptions to popular NPR programs, such as Car Talk and Fresh Air. This enabled Audible listeners to, in essence, time shift their NPR listening. Until mid last year, this was the only option for listening to Car Talk, other than real-time. VERY smart.
- Second, they baked themselves into the iPod from day 1. How they got Steve to sign off on that, I have no idea, but it ensured their content was compatible with the most popular MP3 player ever. Even today, it's baked into every single iPod model. That meant they attracted new subscribers with every iPod purchase.
- Finally, they did an amazing deal with Amazon to be the exclusive audiobook provider. Looking at those bestsellers? Wait, an audio version, and I can get it right now? Sign me up! The fruits of this last deal were clear to both parties, and easily led to today's deal.
This is practically a case study for effective business development, and looks to be a win for both parties, as Amazon wants to strengthen their transition to digital media, and Audible is under increasing pressure for earlobes with the podcast revolution, XM/Sirius, and HD Radio.
So what's next? Well, the Audible acquisition nets Amazon a nice native port to the iPod. Potentially, Amazon could expand their media through that pipe, but Sir Steve is sure to crack down if they do. More likely, Amazon will leverage their recent Kindle success with publishers to encourage more content than ever to be available; listen on your Kindle or iPod. I also expect Amazon to tout the lesser known gems of Audible's content library: a daily recap of the NY Times and Wall Street Journal; live performances and lectures, and more.
My applause is Audible.