MediaBay announced last week that it received $1.5 million in additional financing from a company wholly owned by MediaBay chairman Norton Herrick. MediaBay will use the funds to expand marketing efforts for its Audio Book Club business and to grow its audiobook continuity programs.
The company has begun testing two spoken-word audio continuity programs that will feature original content. Foul Play will be dedicated to detective stories, while Swept Away will focus on romance titles. Michael Herrick, MediaBay CEO, said that by developing original content, "we believe we are also building franchise value that could be exploited in other media, including television, film and written books." If the tests are successful, the company hopes to roll out the programs on a regular basis in 2003.
The new investment by Herrick puts the total investment by Herrick, his sons and affiliated companies in MediaBay at $20 million. The financing comes at a time when the company's stock price is in free fall. From a one-time high of $6.04, MediaBay's share price closed at 78 cents on September 30, the day before the publisher issued the news about Herrick's investment (see Stock Watch, p. 10).
In a statement, Herrick said, "I continue to invest in MediaBay because I believe in the company. I continue to work for the long-term benefit of the company and its shareholders and I have never sold a share of MediaBay stock." Herrick added, "I believe that my investment is secure and that all the shareholders, including myself, will benefit as the company earns profits and continues to grow."