Over the past week a number of announcements from major publishers and the start-ups who want to disrupt Amazon's dominance of the digital download market suggest that a new frontier of competition is opening up over audiobooks.
Until now the audiobook market has looked pretty much sewn up by the Amazon subsidiary Audible on both sides of the Atlantic. Audible isn't just the leading provider of audiobooks through its own site, it's also the distributor that provides audiobook content to both Amazon's ecommerce sites and to Apple's iTunes store. Other channels to market, such as selling audiobooks on physical CDs, are still available, but have been of declining importance. Nevertheless, even if it has been heavily reliant on Amazon and its subsidiary companies, the audio market has grown significantly in recent years. A recent article in Publisher's Weekly estimated the size of the audiobook market as $2.6bn, and cited a New York Times article that suggested the market grew 28% in the first eight months of 2014.
This rate of growth, coupled with a perception among publishers that their audiobook revenues might be too reliant on one distribution channel, seems to have encouraged them to start experimenting with their business models for audio content. For example, in the last six months: -
- Ebook subscription platform Scribd (which added audiobooks to its platform in November 2014) has announced it has added 9,000 audiobooks from Penguin Random House to its catalogue of 45,000 audiobooks. Interestingly this is the first time that PRH has provided content to a subscription platform. It also looks like a climbdown from the strategic statement that UK CEO made in November 2014 at The Bookseller's Futurebook conference, where he appeared to rule the company out from working with subscription providers
- Hailo (a UK-based taxi hailing app) has brokered an experimental partnership with PRH in the UK to make audiobook extracts available to passengers via its app. Details of whether this is part of a Direct to Consumer retail strategy are vague (again, this is something PRH seems to have ruled out), but it does appear to be part of a plan to get audio content out to a wider and largely captive audience of people stuck in taxis with spare time on their hands
- 3M's Cloud Library service (a competitor to more established ebook lending services such as Overdrive) granted service users access to a catalogue of 40,000 audiobooks. This service, which delivers audiobooks to 3M Cloud Library's apps is provided by Findaway World, a distributor that has a similar agreement with Scribd
- Ratuken's acquisition of Overdrive for $410m doesn't just give the company that owns ebook platform Kobo a bridgehead into the library market, it also adds audiobook expertise to the company. Overdrive doesn't break out how great a proportion of its catalogue is audiobooks, but a quick search of the company's website suggests that it could be many thousands of titles
- Struggling ebook retailer Nook added an audiobook proposition to its business, also in November 2014 by launching a dedicated audiobooks app. The move would seem to take Nook into direct competition with Audible. The main difference seems to be that while Audible seems to rely on a membership model which allows members to download one book a month for a monthly fee, Nook's audiobook app expects listeners to buy content on an a la carte basis. Given that retail prices of audiobooks are quite high (often $20 or more for a single digital title), it's uncertain how Nook plans to drive sales in sufficient volumes to make a difference to its overrarching digital business
- Amazon-owned Goodreads also made an interesting announcement that acknowleges that audio content has a powerful role to play in the book discovery process. From late April onwards, the book recommendation and reading community site will feature free audio samples for around 180,000 titles available on (also Amazon-owned) Audible.
If the audio market is achieving double digit growth it's no surprise that publishers and booksellers alike are suddenly seeking to diversify their businesses or seek a greater slice of the pie. With adult fiction and non-fiction markets both static or declining in the major publishing markets, the industry has had to look towards children's content to stabilise their businesses recent years. The news that audio could provide an alternative path to growth is tantalising. And it also implies that Amazon will find competition in the audio category heating up in the coming years.