Company is on the move with new leadership, audiobook downloading and $4 million in funding.

NewStar Media continues expansion of its spoken-word audio division. The company recently launched a Web site to sell audiobooks (, announced plans to launch a lower-priced imprint for mass merchants and restructured its executive staff (News, June 21).

Now NewStar is getting involved in the emerging technology of downloading audiobooks. Downloading has been a hot topic in the music industry of late, but for the audiobook industry it is still in its infancy, with the pioneer in this regard. Audiobook downloading allows consumers to pay for an audiobook online and immediately download it to the computer. Then the purchaser can listen to the audiobook through the computer's speakers or carry it around in a handheld device such as the Diamond Rio or the Nomad, available nationwide at electronics stores like Radio Shack.

NewStar will be the first audiobook publisher to sell its titles directly by downloading from its own Web site. "We'll have 500 titles available for downloading within the next 60 to 90 days," noted Peter Engel, president and chief operating officer of NewStar Publishing and Internet Services. "The initial list will contain the best of our backlist titles, plus some brand-new titles to be announced within 30 days. Eventually, all of our product will be available in this form. We're doing this to get a head start; we believe that within a short time, a year maybe, there will be millions of these portable receivers in the hands of consumers." The downloads will be encoded to prevent pirating, he added. The price structure for the downloads has not yet been set.

NewStar also has plans to amass a "stock audio library," similar to a stock photo library, of downloadable audio clips from historic speeches, classic radio programs, comedy routines (think Abbott and Costello's "Who's on First?"), p try, great moments in sports and other archival sound bites. "All over the world, there are piles of this stuff, but it's never been made easily available in one place," Engel pointed out. "We have a team of people acquiring these sound bites from all sorts of public domain and uncatalogued sources. It will be an audio Bartlett's, if you will. It will be available to students doing essays as well as advertising agencies, filmmakers, audio stations or anyone else needing particular sound clips." The service will be "virtually free," according to Engel. "We will be charging a purely nominal amount of money," he said. "For a consumer it might be something like $10 for a six-month membership."

NewStar's Platinum Collection, the imprint targeted to mass merchants, supermarkets and drugstores, will hit retail in September. It is currently being tested in the K mart and Eckerd chains. One-cassette titles will retail for $4.99, two-cassette titles for $7.99. The initial release of approximately 50 titles includes a few new ones as well as shortened versions of popular backlist Dove titles that were originally released in four-cassette form -- for example, Robert James Waller's Bridges of Madison County, LaVyrle Spencer's That Camden Summer, Amy Tan's The Joy Luck Club and Dave Barry's Guide to Guys. "Our purpose is to expand the audiobook market," declared Engel. "Right now audiobooks are available mainly in bookstores, but 90% of the public never g s to bookstores. We believe there is a tremendous opportunity here to reach new consumers."

The Platinum Collection follows in the footsteps of other low-priced audiobook lines such as DH Audio's Paperback Audio and Brilliance Corp.'s Paperback Nova. But unlike those lines, NewStar will offer new titles as well as backlist, commented Engel. "We are now well enough financed to be able to compete in auctions for rights to the best of the bestsellers," he explained. New titles acquired by NewStar will be selectively released in two formats simultaneously: a Dove Audio version that is unabridged or abridged on four cassettes, and a Platinum version that is abridged on one or two cassettes at a lower price.

To market the new lines, NewStar has made arrangements with food and drug distributors around the country "who are representing our audiobooks to mass retailers in the same way they represent Clorox and Alpo," disclosed Engel. "I don't think that's ever been done before." Four regional managers will supervise the line.

Completing its corporate restructuring, NewStar has promoted Stefan Rudnicki to publisher of the audio division. Rudnicki served as executive producer of NewStar's audio publishing division since 1997 and was responsible for Dove Audio's productions since 1994. As a producer, he has won six Audie Awards and a Grammy Award.

To fund these new initiatives, NewStar recently sold about 3.5 million shares of its common stock and received roughly $4.2 million after expenses and commissions. One of the company's new investors was Engel himself, and NewStar chairman/CEO Terrence Elkes and vice-chairman Kenneth Gorman increased their investment by purchasing additional shares of the company's common stock. Elkes commented, "With the additional working capital, NewStar is better positioned to implement its growth strategy and to build its publishing and Internet business into a dynamic and profitable operation. Management's increased personal financial investment in the company reflects its confidence in the future of NewStar and dedication to increasing shareholder value."

At press time, NewStar's stock remained below $2 a share.