Visit the website of audio publisher Naxos and you will notice something different. Previously dominated by recordings of classics from Austen to Beckett, the audio books site now features a “contemporary” section, starring Japanese author Haruki Murakami.
Digital downloads of Naxos’s talking books account for about 12 per cent of sales in the US, bringing the iPod generation to a once-staid industry that was dominated by cassette tapes as recently as 2003. “I do think there’s a new audience for audio books,” says Nicolas Soames, publisher and founder of Naxos, a UK-based company. “We were not doing things like Murakami until a few years ago, when it was all on cassettes, and we wouldn’t see many cool, hip people with a cassette player.”
Driven by iPod, MP3 and smartphone users, a new market for audio books has been created. Audible, the leading provider of audio book downloads, says the majority of its customers – who number close to 900,000 worldwide – have never before bought a traditional audio book on tape or CD.
While e-books still account for less than 1 per cent of print sales, digital downloads more than doubled to 6 per cent of the $800m audio book market in 2004. Audible says its own sales have grown by more than 80 per cent since then.
Publisher Random House admits its e-book efforts went dormant after little enthusiasm from consumers, but it has dived into downloadable audio books with enthusiasm.
Its bestseller The Da Vinci Code has regularly topped the digital charts on download sites Audible.com and iTunes.com, while The Holy Blood and the Holy Grail, the book whose authors unsuccessfully sued Da Vinci Code author Dan Brown for plagiarism, recently made its audio debut in digital.
The trend is changing how audio books are sold, and even which titles are chosen for audio release. Penguin, owned by Financial Times publisher Pearson, produced the audio version of non-fiction bestseller Freakonomics only as a digital download in the UK. It will do the same with Neil Strauss’s lounge lizard bestseller The Game, which was published by Cannongate.
“I would not be surprised if the audio book outsold the print book,” says Jeremy Ettinghausen, audio and e-books publisher at Penguin. Mr Ettinghausen adds that digital audio downloads are bringing books to customers who might never visit a bookshop.
“The thing that’s really exciting is we’re able to sell to an entirely new demographic,” he says. “With the turmoil in high street retail sales, publishers are always looking at ways of directly reaching consumers.”
Audible last week launched its first audio-only novel, by comedy podcaster Brian Luff.
In many ways the success of downloadable audio books is down to the popularity of Apple’s iPod. But the books can also be listened to on other devices such as phones, which are being developed with ever-bigger capacity to store audio files.
Audible has a deal with Sony Ericsson in the UK under which new models of its Walkman phones and smartphones come loaded with Audible’s software and an abridged version of The Da Vinci Code.
Launched in the US nine years ago by entrepreneur and writer Donald Katz, Audible struggled with years of post-dotcom gloom and a relatively small membership before finally breaking even in 2004.
In the same year Naxos began selling an unabridged, 27-hour, 22-CD recording of James Joyce’s Ulysses. While it was a success, Mr Soames says that the sheer number of CDs has meant that abridged versions tend to be most popular.
Mr Soames explains that, until as late as 2003, books on cassette tapes outsold CDs. Some listeners, he says, appear to be moving from cassettes to audio downloads without buying CDs. He adds that the margins are lower in audio downloads, but it has the benefit of bringing new audiences.
Mr Ettinghausen also says the economics of downloadable books make more sense. Although recording costs remain, sales can be profitable on much smaller numbers, and the problem of returns is eliminated. Digital audio books never go “out of stock”, meaning publishers and distributors can take advantage of the “long tail” effect, in which low levels of demand sustain profits over a long period of time.
The most pressing issue for audio book publishers, according to Mr Soames, is the proliferation of file formats. While Audible’s software now comes bundled with new iPods and can be installed on to smartphones and MP3 players, rival audio sellers face the challenge of striking a similar deal with iTunes or risk being locked out of the massive market of iPod owners. The one format that works on almost any player is MP3, but it is difficult to include anti-piracy technology on these files.
This has not put off budding rivals to Audible. Mr Soames says Naxos plans to launch its own service by November and other dedicated companies such as Media Bay and, most recently, spokennetwork.com, are joining the fray. Amazon has also signalled it will follow suit, although it works with Audible to sell downloads.
Publishing rights also vary from country to country, meaning Audible must strike deals for book distribution separately in each territory. So far, it operates websites in the US, UK, Germany and France, and sells through iTunes in Japan.
Authors do not always allocate the audio rights for their works to the publisher that prints their books, and some audio contracts specify older media formats but do not include downloads, prompting renegotiation.
“That happens reasonably often,” says Chris McKee, managing director of Audible UK. “Certainly there’s a lot of activity in the UK at the moment with publishers talking to authors’ agents.”
Audible sometimes obtains the rights itself but frequently works with book publishers and audio recorders such as Naxos and the BBC. In some cases it creates its own recordings, and Mr McKee says it holds exclusive distribution rights for about one-third of its content.
In the music industry, digitisation threatened existing markets; so far, in the publishing industry, it appears to be creating new ones.