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Random Inks Alliance With Audible
Jim Milliot -- 5/15/00
Random House Inc. has formed an alliance with Audible Inc., the digital distributor of spoken-word audio content, to form a new imprint. Random House Audible will be dedicated to producing spoken-word audio specifically for digital distribution. RHA will be an imprint of the Random House Audio Publishing Group, and all titles published by the unit will be distributed exclusively on the Internet by Audible to customer's personal computers or hand-held digital audio players. In addition to the alliance, Random House has taken a minority stake in Audible through Random House Ventures. Random president Erik Engstrom will join the Audible board.
The establishment of the new imprint "will make us look at the creation of content differently," Jenny Frost, president of Random's audio group, told PW. While the bulk of the titles will be based on books, RHA will acquire original content. "The new imprint gives us the flexibility to do different kinds of publishing, and by getting us to the market faster, we can tackle more topical issues," Frost noted.
Random House will oversee the operations of the imprint and will hire staff dedicated to the new unit. The company will also continue to offer titles from its three audio imprints on a nonexclusive basis to all eligible online and traditional retail customers, while Audible will continue to offer content from its other providers through www.audible.com.
Frost said pricing has not yet been determined, although she speculated that digital books would be priced lower than that of spoken-word cassettes or CDs. Frost hopes to have the first RHA products ready by summer.
The agreement with Random House is the most recent move by Audible to establish a major presence in the digital audio market. In January, Audible signed an agreement with Amazon.com that makes the company the exclusive provider of digital spoken-word content to Amazon (News, Feb. 5). Under the terms of the deal, Amazon will receive $10 million annually plus a percentage of revenues over a certain amount.
Audible currently has 20,000 hours of audio content including more than 3,000 digital audiobooks and more than 8,000 other audio selections.
Launched in 1997, Audible had sales of $1.7 million in 1999 compared to sales of $376,000 in 1998. The net loss last year was $14.6 million and the company has an accumulated deficit of $33.2 million. In 1999, sales from content and services were $478,000, while hardware sales were $314,000. Audible has discontinued its manufacturing operations and will focus on selling content. It finished 1999 with a customer base of 13,000.
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