The general word right now is that the AudioBook Publishing industry is fertile ground for new work, ’cause the medium of audiobooks (helped along by iTunes) is booming.
A newsletter the other day from James Adams offered an especially cogent assessment of the AudioBook Publishing industry, and I’m repurposing most of it below, with the express permission of Mr. Adams.
Here’s his resume’: James Adams is the former Managing Editor of the London Sunday Times, CEO of United Press International, founder and CEO of iDEFENSE, a cyber intelligence company, Board member at the National Security Agency and NCIS, author of 13 bestselling books on warfare and intelligence and currently Chairman of ADRevolution http://adrevolution.com.
Yeah, I know…pretty impressive. You’ll concur after reading his articles below.
Please pay special attention to the final article: WHAT PRICE NARRATORS?
IN A TIME OF SO MUCH TURMOIL in the publishing business, the one constant theme in all our lives is that of change. Everyone in the media is confronted with either the collapse of their existing business model or with the need for radical transformation with technology as the forcing function. No time is this more true than with the introduction this month of the iPad from Apple. While I may not buy one, there is no doubt that Tablets are going to be part of all our publishing futures whatever medium we happen to personally use. What does that mean for us? Well, more change for sure and as you will see below, some folks have some pretty radical ideas about what that change might look like. Whatever the answersmay be, we’ve all got to keep moving at warp speed if we are to survive and prosper. A fun challenge to embrace.
With best wishes, James Adams
APPS: THE NEW COMMODITY
Just last year when I was talking to some folks about developing apps for the iPhone and Android, the fairly standard quote seemed to be around $10k. Today, the price has tumbled as the whole app market has become commoditized, and now I can get a great working app for digital audio for less than $500. And the prices continue to fall.
Recognizing that the next step will be the effective elimination of the app as a cost, I started looking for a software tool that could create apps using a drag and drop tool on the desktop. I wanted one that could create the audio, store that in a database and then use the tool to create an app for any platform and then automatically post it to the location you want. At the same time, widgets associated with the software can place ads or audio links in the audio file to generate revenue.
Since Apple started offering apps for sale for the iPhone in 2008, more than $2.7 billion apps have been sold and 150,000 are available. However, it seems to me that the days of being able to charge anything to the consumer for access to an app are drawing to a close. Instead, revenue will come from ads and click throughs.
In its search for a different model, the Hearst Corporation has established a team that creates dozens of apps created around sports and news that aggregate existing web content and package it in what it hopes will be interesting and appealing new ways. Hearst expects to offer thousands of apps at 99 cents a pop. But, as apps become accessible to everyone – both the creator and the consumer – and the cost of entry falls ever closer to zero, charging for an app is no longer going to be viable.
As with so much about web 2.0, it’s the multiplication of revenue streams rather than the dependence on a single source that is going to dictate the future. Those who see every offer as an opportunity to connect in many different ways with other creators and consumers of content will make money. Those who can only see one way of making money will fail.
(editor’s note: this article written before the release of the iPad by Apple)
The Big Day is almost upon us: the launch of Apple’s iPad which must surely be one of the most hyped technology events of all time – even by Steve Job’s exacting standards.
The question for us who live and work in the world of audio is just what, if anything, may be the significance. Certainly, the form factor is cool and the eBook experience will be much better than the Kindle or the Nook but I’m not clear just why I want to own the device. And I say that as one who never knowingly passes up an opportunity to spend money on a new gizmo.
Much of the debate has been the tussle over eBook prices with Apple agreeing to publishers’ demands for a higher price and a different business model than that imposed on a reluctant market by Amazon. It now looks like the iPad’s ebook price is going to settle at around $14.99 compared with Amazon’s $9.99.
While the publishing industry is seeing this as a reprieve for its profit margins, the public wants to know just why publishers are insisting that an eBook is somehow just as expensive to produce as a regular hardcover. The answer lies in the overhead which is roughly the same for both types of book. And the reason for that is that publishers have been terrified to make the kind of changes that will be necessary to accommodate the digital universe.
This reluctance in the face of the inevitability of change will do nothing but damage to the publishing industry. Look at newspapers. They have resisted change for a generation and now their business is falling off a cliff. Apple, long seen as an innovator, has become an enabler of the status quo with the iPad. When the cliff edge finally comes, there will be blood on the floor of the whole publishing industry with famous names shuttered and hundreds of layoffs. Meanwhile, the self-publishing industry will continue to take market share and the digital download audio business will boom.
That said, it is very clear that the arrival of the iPad is acting as a forcing function in whole areas of digital industry. Not only are other big players like HP and Dell working on their own versions, but much of the book industry seems to see the iPad and its imitators as the tipping point for a whole new generation of reading and listening.
Brad Inman is a former journalist and serial entrepreneur who has created several successful ventures. His latest is a company called Vook that will combine a digital book with audio, video, and hyperlinks to enrich the whole reading/listening/watching experience. This is similar to a project over at Google and another that is being launched by Penguin specifically for the iPad.
What this means to me is that while the future business model is unclear, a multi-media experience attached to any book is certain. What is also certain is that the days of the audio CD are almost over, either as a retail product or for sale to libraries. The consumer wants more than an expensive stand alone shrink wrapped audio experience and these days, what the consumer wants, he or she gets.
I was talking the other day to the owners of a small bookstore about how they see their future. By any standards, it’s a successful local store, and the folks who run it have consistently made money. They stock a wide variety of books and a small selection of audiobooks. Like everyone else in that business, the last year or two has been tough with revenue down and margins cut.
They are hoping that the upturn in the economy will trickle down to them and that they will be able to settle back into a model that has worked for them for many years. I take a more pessimistic view and think that they are digging their own grave.
The days when the bookseller had any kind of control over what the consumer should read are over. Today, power truly has been transferred to the consumer and any supplier of content has to recognize the new reality in order to prosper. What does that mean? First, it means that hard and soft cover books are only one way of getting the written word, second, that the stranglehold that the publishing industry has held over authors has been loosened by the self-publishing industry, and third, that all content will be made available as consumers want it. That means hard and soft copy, audio as CD or digital downloads, apps, will be made available through any media the consumer wants. And at a price that the market dictates.
To me, that means a bookseller needs to offer traditional books, have a stellar website, a print-on-demand self-publishing outlet, and audio, both as a download for that impulse buy as well as on CD. Every bookseller who fails to accommodate this new market reality will go the wall.
THE FOUR Vs
Volume, Velocity, Variety and Veracity. Those are the four principal challenges that exist for all of us who are trying to play in the digital arena. Not only is the volume and variety continuing to grow exponentially (60% compound annual growth and accelerating) but trying to distinguish good data from bad gets more difficult every day.
According to The Economist, Wal-Mart handles more than one million transactions every hour, feeding databases that hold more than 2.5 petabytes, which is the equivalent of 167 times the number of books in the Library of Congress. Or, for another example, decoding the human genome took one year the first time it was done, and the same process can now be replicated in one week. So the volume of data and the velocity at which it moves continues to grow at almost unimaginable speed.
All this data flying around creates a tremendous amount of noise, and for everyone involved in the creation of content, the principal challenge is how to stand out from the crowd when everyone else is also shouting as loud as they can.
So, how can this be done in the audio world? Let’s say there’s an audiofile that contains thirty different 20-minute exercises, one for each day of the month. You offer an app or a digital download that might have an ad for Nike and Luna energy bars embedded within it. Every time the audiofile is accessed, that provides information about the consumer and his or her interests can be cross-referenced with other, already publicly available data. For example, the person interested in the exercise audio might also have recently had a child or is getting married. That aggregated information is valuable and provides multiple marketing opportunities and additional potential revenue streams.
Of course, companies like Amazon and Google do this already. What will be different going forward is that all content creators will have to learn to mine data, and the most well rewarded job will be that of the statistician.
WHAT PRICE NARRATORS?
There have always been more narrators than there are books to narrate and so that should create a buyers’ market driving down the finished hour cost to hire a decent voice. For years, the reality has been different, with the per finished hour price point for narrators varying widely and usually with no discernible relationship to the market or sales. Rather, prices have been set by a small group of friends, most of whom have known each other for years, and they take care of each other as friends should do.
But a cold wave of reality is sweeping through the narration business. As publishers have hit hard times, they have been cutting costs and poorly run companies have had their leadership replaced so sentiment is now at a premium.
Narrators are now being forced to record at home – why pay for an expensive studio and engineer when the quality can be matched by ProTools and a good mic? – and many of them are having to cut their prices to reflect the new market reality. I began BeeAudio with a view that a fixed flat rate for all narrators, including myself, was what the market needed and that seems to be borne out by what I’m hearing from publishers around the world.
Margy Bauman at Redwood Audiobooks has taken things a step further. Margy is one of the nicest and most respected figures in the business, and she has always been an innovator. Now, she has cut deals with some of the best names in publishing where, rather than paying them up front, she will split the net income with them. This means that narrators, too, will forgo cash in favor of a royalty over time.
It’s an interesting approach, and it’s too early to say whether it will work or not, or whether narrators will end up earning more or less under this structure. What is interesting though, is just how many of the top names have signed up to find out.