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Salon Buys MP3Lit.com For $5 Million
Calvin Reid -- 5/15/00
Looking to add revenue streams from audiobook downloads and to repurpose more of its text content into audio formats, Salon.com, a popular news and culture Web daily, has acquired New York City-based MP3Lit.com, a Web site launched last year that offers free audiobook excerpts in the MP3 format. Purchase price was about $5 million in stock, warrants and cash. The acquisition will help facilitate the fall 2000 launch of LoudBooks.com, a previously announced venture by MP3Lit. com that will record and publish original, full-length frontlist audiobooks in MP3 and Windows Mediaplayer formats.
Michael O'Donnell, CEO and president of Salon.com, said the deal will allow Salon.com to deliver its content in new ways. "Audio programming and digital downloads are increasingly significant revenue streams. MP3Lit.com and LoudBooks.com will be major added value for our business: as heavily trafficked Web destinations, as audio-service providers and as new revenue potential from audiobook downloads."
Gary Hustwit, CEO of MP3Lit.com, will continue to direct its operations as well as the upcoming launch of LoudBooks.com. Hustwit is also the founder and publisher of print indie publishing house Incommunicado Press and was one of the 11 book industry figures named by PW as most likely to figure in shaping the new digital era of book publishing ("Eleven for the Millennium," Jan. 3).
Hustwit told PW that MP3Lit.com will immediately move into Salon.com's New York City offices off Union Square. He noted that while the firm will become a subsidiary of Salon. com, it "will retain its identity." MP3Lit. com's small Los Angeles office will merge its operations into Salon.com's San Francisco headquarters. MP3Lit.com currently has about four employees, and Hustwit said that "several more people will be hired" immediately. Hustwit noted that Salon.com is also building a "state of the art recording studio" at its New York offices that will be used for "audio and video recording, interviews and live Webcasts," featuring authors as well as Salon.com writers.
MP3Lit.com will be instrumental in producing audio and video content for Salon.com's network of Web sites as well as producing downloadable Salon.com content for PDAs, proprietary e-book devices, laptop and desktop computers. Salon.com registers about three million impressions a month; Hustwit said MP3Lit.com receives about 150,000 a month, "mostly from word of mouth. I did this deal because Salon shares our vision of audio literature and has the resources to make us into a destination site." He also said that LoudBooks. com will launch with "hundreds" of original audiobook titles "released only in digital audio formats."
Hustwit told PW that although he will now be working full time on MP3Lit.com, Incommunicado Press "will continue as a press and as a small press bookstore" at its present location on the Lower East Side of Manhattan. "I'm going to have to find others to run the press, but I'm still committed to paper. I want to continue to do books."
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