The nation's economy may be spiraling downward, but you'd never know it to look at audiobook sales. The audio industry is having one its best years ever. Most audio publishers contacted by PW report double-digit sales increases for the first quarter of 2001 over the same period last year.
At Time Warner AudioBooks, sales are up about 33%. Brilliance Audio's sales are up 25%, and Simon & Schuster Audio is experiencing double-digit increases. Sales are also "dramatically" up at HarperAudio and Random House AudioBooks, say executives at those companies.
"Business is booming," says Eileen Hutton, v-p and associate publisher of Brilliance Audio. "In this economy, people may be cautious about buying a new car, but they're still willing to spend money on audio."
An exceptionally strong slate of spring releases has boosted both sales and awareness of the product. Stephen King's Dreamcatcher (Simon & Schuster Audio), Amy Tan's The Bonesetter's Daughter (New Millennium), Anne Tyler's Back When We Were Grownups (Random House AudioBooks), James Patterson's 1st to Die (Time Warner AudioBooks), Sue Grafton's P Is for Peril (Random House AudioBooks) and Andre Dubus III's The House of Sand and Fog (HarperAudio) are among the many hot current fiction audiobooks. Non-fiction is flourishing on the strength of World War II titles, including Hampton Sides's Ghost Soldiers (BDD Audio) and Tom Brokaw's Greatest Generation series and its latest entry, An Album of Memories (Random House AudioBooks), along with perennial business titles such as Spencer Johnson's Who Moved My Cheese? (Simon & Schuster Audio.)
The ever-increasing demand for unabridged and CD titles (which have higher price points than abridged cassette versions) has also helped publishers' bottom line.
But sales are only part of the story. Today there are more audiobook fans than ever before. The Audio Publishers Association's latest market survey finds that 22.5% of American households have listened to audiobooks in the past year, up from 21% in 1999.
"Something's different," says Maja Thomas, v-p of Time Warner AudioBooks. "It's reached a kind of critical momentum. We are delighted by how things are going. We're not shocked—we've been prepared for success, we've always known that our product is good and that the consumer will want it. So happy days are here."
The APA itself has gained momentum in the past few years, creating successful, innovative new programs. Last year saw the debut of JAM (Jobs in the Audiobook Market), a daylong annual event that allows pre-screened, qualified narrators, abridgers and editors to audition and meet with interested publishers.
This year, the APA launched the Audio Buyers Conference, in which audio buyers for diverse markets (truck stops, mass merchants, catalogues and others) spoke about the specific needs of their customers and met with publishers in one-on-one sessions. The result has been increased communication and understanding between all parts of the industry.
The APA has also fine-tuned its annual conference, built up the Audie Awards into an elegant, first-class event and increased its commitment to the "June Is Audiobook Month" campaign. "This year, we increased our production of audiobook samplers by 100,000 and added CDs for the first time," says APA president Paul Rush. "All the samplers were gone by mid-May."
Publishers note improved relations with retailers in recent years. "Communication with the booksellers and buyers is growing. The store support has been incredible on all levels," says HarperAudio associate publisher Carrie Kania. "BookSense has been a tremendous supporter to us as well—they had 10 audio titles on their May/June 'BookSense 76' [list of recommended titles]. It's great that independent bookstores are realizing that we're doing really good titles."
Retailers have also become more sophisticated in their handling of audiobooks. Last year, when unabridged and CD versions became popular, publishers complained that the multiple formats of each title were taking up too much shelf space, squeezing out other titles and reducing the available selection. While the need for more shelf space remains pressing, the multiple-format issue is gradually working itself out, as retailers become more selective. "The market has developed to the point where retailers know what format their consumers want. So it's like niche marketing in a way," says Time Warner's Maja Thomas. "At this point, I would be very surprised to go into a store and see all four of our formats together. Instead, I would expect that unabridged CDs and cassettes will go to the library market, almost all book retailers will take abridged cassettes and CDs, and then markets with certain demographics will be interested in unabridged CDs."
Still, publishers wish that the shelf space allotted to audiobooks in stores would reflect the burgeoning growth of audiobook sales. "We're continually trying to show booksellers that the profitability of audio per foot is higher than that of other products," says Robert Allen, publisher of Random House Adult Audio. "We've also found that when retailers move audio into a higher traffic area, audio sales triple. People don't often think about that, but audio can be an impulse item. Placement, racking and shelving could all be improved."
Publishers especially mourn the lack of room for backlist titles. "It's so important not to lose focus on the backlist," says Kania, pointing out that older titles can be very profitable when marketed well. "We had two surprise bestsellers last year. One was James Joyce's Dubliners—we've sold in the five figures on that. Six or seven reprints down the line, it's selling more this year than last year. The other was The Edgar Allan Poe Audio Collection, which was a surprise Christmas hit. These are older titles, dead authors. It's a testament to what can be done with backlist if we just give it some attention. I want booksellers to remember that titles we published a year ago, 10 years ago, 50 years ago are still viable."
"Unfortunately, for all but the superstores, it's become a 'greatest hits' business," says Michael Viner, founder of New Millennium Entertainment. "I think it's shortsighted of the retail establishment, because it sends business elsewhere. But it's making the people who sell effectively on the Web—Audible, for instance—more successful."
Indeed, Audible's download business has flourished recently. In the first quarter of 2001, Audible's revenues increased 319% over the same period a year earlier, and 29% over the prior quarter, while its losses from operations declined.
Publishers agree that although downloading is still a long way from being the primary source of audiobooks, it's a format that is growing rapidly. This year Random House launched Random House Audible, a series of download-only titles with no cassette or CD counterpart. The imprint created both buzz and controversy when it debuted with Oprah pick Drowning Ruth. Random House defended the decision, saying that speedy digital downloading was the only way to get the audio version to consumers in time to coincide with the hardcover release. But booksellers were outraged at being left out of the loop entirely for what would have been a certain audio bestseller.
Simon & Schuster plans to launch its own proprietary downloading site by the end of the year, while continuing to offer titles through Audible. Time Warner AudioBooks plans to release two unabridged Neil Stephenson science fiction audiobooks as Audible downloads prior to putting out cassette/CD versions at retail.
"I believe that digital audio really has a future," says Gilles Dana, senior v-p and publisher of Simon & Schuster Audio. "It's not going to happen tomorrow. But once the hardware prices go down, and people feel comfortable downloading, and you can easily listen to it in your car, it's going to happen. When people can download that recording and then burn it onto a CD and play it in their car, that will be the major breakthrough."
Other futuristic possibilities are MP3 CDs and enhanced CDs, both of which are being experimented with by publishers. MP3 CDs are especially promising, considering the growth of the unabridged market, because one disc can hold 12 hours of audio. "It's perfect, because rather than have 23 CDs, you can fit it onto two MP3 CDs," says Dana.
Blackstone marketing director Paul Coughlin is also enthusiastic about the format. "Customers can purchase a new portable CD player plus an MP3 CD for around the same price of one unabridged audiobook in standard CD format," he says. "An MP3 CD audiobook saves customers 60%—80% off the retail price, promotes safer driving habits [because listeners don't need to change the disc to hear more of the audiobook], and is attractive to bookstores since it only takes up as much shelf space as a music CD."
MP3 CDs offer other advantages as well. "MP3 audio has a wider frequency range than cassettes do," says Delia White, owner of the Reader's Chair, an audio publisher. "Bookmarking is easy, as each audiobook is divided into scenes—the way the author intended. Users can navigate through their audiobooks instantly with just a click of a mouse or press of a button."
MP3 players are "easily available," says Timberwolf Press founder Patrick Seaman. "Right now you can go down to Kmart and buy a CD player for $85 that also plays MP3 CDs," he says. "Eventually, all new CD players will play MP3 CDs. MP3 CDs allow us to offer unabridged audiobooks at a much lower price point, so if enough publishers get on board, this format could really broaden the market for audiobooks."
Timberwolf Press was the first to release audiobooks on MP3 CD last year. Recently, the Reader's Chair announced that it would issue its entire catalogue in the MP3 CD format. Blackstone Audiobooks currently has 40 titles in the MC3-CD format, and plans to release an additional 10 to 15 titles each month, comprising both frontlist and backlist titles.
The format will soon get a boost from Simon & Schuster Audio, the first major publisher to offer an audiobook on MP3 CD. In September, Simon & Schuster will release The Talisman, the classic horror novel by Stephen King and Peter Straub, unabridged on cassette, CD and MP3 CD. Frank Muller reads the 27-hour audiobook, which retails at $75 for the regular CD version (24 CDs) and $49.95 for the MP3 CD version (three CDs). The Talisman will be the first #1 bestseller to appear in the MP3 format.
Although MP3 CD is an intriguing format, publishers caution that it won't become the norm for quite a while, if ever. "The hardware base does not exist yet," says Dana. "How many people have MP3 players in their car? GM is thinking of installing them, but it won't happen tomorrow. But I do think that 10 years from now, MP3 CD will be the standard."
Paul Rush, founder of the Earful of Books chain, adds, "I think it's like what CDs were up against: there has to be a mass of titles available before you go through the effort and expense of educating the consumer. If there are 500 titles available in the format, then from a retailing perspective, it makes sense to do that. If there are only 50 titles, then you scratch your head. But I do see it coming, and when it does, it will bring the price points down."
Enhanced CDs (also called CD+), which play like regular CDs but also offer text, video or graphics when put into a CD-ROM player, are also beginning to appear. Simon & Schuster was the first out of the gate, releasing Killing Pablo on enhanced CD format in April. HarperAudio will release an enhanced CD version of C.S. Lewis's The Magician's Nephew in the fall. "It's a good one to test it on because it's a very visual book with lots of art," says Harper's Carrie Kania.
Other publishers are more cautious. Time Warner's Maja Thomas says, "So far, the way we've been enhancing is, for example, putting an hour of extra tracks on the CD of Me Talk Pretty One Day. That's an enhancement our customer understands. Whereas a graphic or video interview is expensive, and I don't know if that makes a sale. Where are they going to use this enhanced CD? Certainly not in their car. Are they going to take it to work? So I didn't really feel it was a necessary innovation at this point."
Although audio has a whole is enjoying a banner year, there are still areas in need of improvement. One big disappointment for the industry is the poor reception of audio in mass merchants like Best Buy, Target, Wal-Mart and Kmart. Many mass merchants have downgraded their audio sections. Target has scrapped its former four-foot dedicated audio section and now just offers select audiobook releases in conjunction with hardcover bestsellers, says Sherri Stewart, product manager of audiobooks at Levy Home Entertainment, which distributes to Target, Wal-Mart and Best Buy. Best Buy formerly offered eight feet of audio space in all stores; now only some stores carry audio.
The problem, according to Stewart, is that audiobooks are not a destination purchase at mass merchants. People don't go to Kmart or Best Buy specifically looking for audiobooks. Therefore, to reach the consumer, audiobooks have to attract their attention. "Right now, they're not carrying much audio, and there's no signage, so the customer doesn't know it's there," she says.
But she believes that mass merchants do have strong potential to sell audio. To encourage impulse buying, she says, "I would like to see lower price points for mass merchants. I would like to see a better job of signage, to really scream out to the customer that what's down this aisle is different, to draw attention to the fact that it's not just paperbacks. Audiobook listening stations would also be great."
On the positive side, at the Audio Buyers Conference, distributors for truck stops reported increasing interest in audiobooks in those markets.
All in all, the future for audiobooks looks bright. A recent study of traffic congestion in urban areas conducted by the Texas Transportation Institute found that the average person spends 36 hours a year sitting in traffic that is not moving, up from 11 hours in 1982. With Americans spending so much time stuck in traffic, the desire for audiobooks can only get stronger.