Higher operating costs and investments at Audible resulted in a loss of $577,000 in 2005, compared to net income of $2 million in 2004, despite a 83% jump in revenue, to $63 million. Audible had previously announced that investments to upgrade its Web site as well as other higher expenses would mean a loss for the year.
Among the higher expenses were royalties and other content charges, which increased to $22.2 million from $10.6 million in 2004. Marketing costs, as well as general and administrative costs, also rose significantly in the year. Audible chairman Don Katz acknowledged that the transition to the new Web site was "a tough one," but said the company "is now far better positioned for the future."
During 2005, the company added 237,000 members to its core AudibleListener program, ending the year with 248,000 AudibleListener members out of a total of 303,000 customers, a 67% increase over 2004.
For a number of reasons, including new accounting rules and the many ways customers buy Audible's services, Katz said, Audible was declining to make long-term financial predictions. Regarding 2006, he said Audible anticipates a loss in the first quarter, but expects results to improve throughout the year.
