MediaBay Closes
By Jim Milliot -- Publishers Weekly, 7/11/2007 3:22:00 PM
After investing millions of dollars in an unsuccessful attempt to develop a digital download system for spoken word audio, MediaBay said Wednesday afternoon that it was closing down all of it operations. The company, which had been operating with a skeleton staff for the past several months, began looking for a buyer in spring 2006. In its statement, MediaBay said "it has been unsuccessful in its attempt to sell the company, and has no viable alternative except to cease operations and liquidate its assets." MediaBay hopes to complete the sales process by early September.
Once the dominate book club for spoken word audio through its Audio Book Club division, MediaBay began to try to transform itself from a traditional direct mail company to a digital distributor in 2004 when it discontinued recruiting new members to its old clubs. As a result of that decision, sales through its traditional channels dried up and total revenue in 2005--the last year for which figures are available--fell to $9 million from $18.8 million. At its height in 2002, MediaBay had sales of $45 million, although the company lost money every year and as of December 2005 had an accumulate deficit of $163 million.
Despite developing several Web sites in 2006 that offered downloadable audio, the digital services did not catch on with consumers and never generated more than minimal sales. MediaBay’s problems are in contrast to digital download leader Audible which posted revenue of $82 million in 2006 and has swung between profitability and loss the last three years.
