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Downloading audiobooks is skyrocketing, but will we live to see a day without physical audiobooks?

When Collier Black learned that his daughter was about to deliver his first grandchild, he packed in such a hurry that he left his iPod behind. So when he got to his daughter’s, he bought another.

“If I had to buy an iPod every month, I’d do it,” he says. “It’s that important to me.” Black, 53, pitched in the minor leagues in the early ’70s. He doesn’t run the bases these days, but he walks a lot—about 50 miles a week—and while he walks, he listens to audiobooks. “This morning my wife called when I was walking, and I was three or four miles from the house. And I said, ‘Why are you bothering me? I’m right in the middle of an air raid on Berlin.’”

On long drives, he and his wife, Peggy, both listen to audiobooks on their iPods. They both go to bed with their headphones on, too. “We’ve been married 31 years and our sex life is still great, but we love to listen to audiobooks,” says Black, who used to listen to tapes and CDs and still does, occasionally, in the car.

Collier Black is a goner, a walking billboard for Apple—not to mention Audible, from which he downloads up to 10 books a month. But he’s hardly alone. Today, 20 percent of Americans over the age of 12 own at least one iPod or other MP3 player, compared to only 8 percent in 2002, according to a study released in June by Ipsos Insight. Audible’s membership—people like Black who pay a monthly fee to download a given number of audiobooks—is currently at 308,000, a 51 percent increase over a year ago.

The growth of audiobook downloading at libraries, meanwhile, has been practically freakish. A year ago, OverDrive, which offers audiobook downloads to libraries, had programs in 1,000 libraries; now, the company has 3,000 libraries signed up and is adding as many as 15 a month. (Those numbers actually represent library systems, which usually have multiple branches.) Another company, netLibrary, which carries Recorded Books titles exclusively, has climbed from about 200 libraries a year ago to more than 1,000 today and is adding more on a daily basis.

But for all that growth, most publishers report that as a percentage of overall sales, revenue from downloads is still in the single digits. And, according to a recent Audio Publishers Association survey, just 7 percent of titles listened to in the past year were digital downloads. The dominant format by far is still CDs. And while the recording industry in general has pulled the plug on cassettes, they comprise—bulkiness and hissing be damned—a significant, though shrinking, share of the audiobook market.

So when will cassettes finally go the way of 8-tracks? When will listening to downloaded versions of audiobooks be more popular then listening to them on CD? When will even more cars be equipped to play iPods than the estimated 70 percent of 2007 models?

Industry insiders are reading the tea leaves differently on all these questions, but this much is clear: New technology is bringing new listeners and new revenue to the industry. So no matter what device you’re plugging your earphones into now, chances are you will have a choice of more titles with higher production values thanks to that growth.

Downloads take off: libraries on the cutting edge
It was only a few years ago that OverDrive’s Steve Potash was approaching both libraries and publishers to devise a program that would allow library patrons to download audiobooks from home. Potash was trying to conjure the chicken and the egg: He had to convince publishers to offer their titles even though there weren’t any libraries on board, and he had to convince libraries to commit to downloading even though there weren’t any publishers signed on. “We really had to evangelize,” he says.

Now it seems everyone’s got religion. Ten years ago, trying to check out an audiobook from the library in your underwear would have gotten you a ride in a police cruiser. Doing so today from your home computer upsets no one. On the contrary, Potash says that librarians are thrilled because downloading gives them one more way to reach out to patrons in the community. Downloaded audiobooks—like their cousins, e-books—allow libraries to transcend their walls and issue more library cards. And when it comes to looking for funding on ballot issues or votes on municipal budgets, libraries need all the new friends they can get.

Libraries are perfect places to introduce people to new technologies and new formats, says Potash. “They’re used to being centers for education. Each of the libraries has worked with us to educate listeners and acquaint first-time users.”

(One thing about which library patrons learn—or a better way to put it might be “are sadly informed”—is that iPod users are out of luck at libraries using OverDrive or netLibrary, since both systems are Windows Media-based and therefore incompatible. The problem is Apple won’t accommodate the format, though there’s hope that through goodwill or enlightened self-interest, Apple will in the future. OverDrive works to explain this to patrons on library Web sites, and the Boston Public Library puts it this way: “OverDrive, along with hundreds of online music and audiobook providers, is hopeful that Apple and Microsoft can reach an agreement that would enable support for Microsoft-based . . . materials on the iPod/Mac.”)

OverDrive is building a tribe of listeners through other channels as well. The site Realtor.org is offering free downloadable audiobooks on its site, many of them about sales strategies and other matters of lucre. Audiobooks are also getting new recruits—literally—through the military: At sea, some 350 naval ships are wired to download audiobooks from a Navy Web site, which even has recommendations from Navy brass. Audible, meanwhile, is making strides in the wireless market. If you have a Palm Treo smartphone, Audible can automatically beam you your choice of audiobook in 45-minute increments for your daily commute.

Audible spokesman Jon Korzen says that the company is not cannibalizing from CD or cassette sales but rather expanding listenership overall. “Half of our subscribers had never listened to an audiobook before they downloaded one,” Korzen says. “Anecdotally, we hear from people who say that after they listened to the download, they bought the CD version to give as a present.”

Simply Audiobooks, a rental company modeled after Netflix, is less than three years old, but it has shifted its business model to include—starting to see a pattern here?—downloads. The company’s Ian Small, who is overseeing the program, predicts the download business will be as big as the rental business in as little as two years. Some Simply Audiobook customers are dabbling in both formats: 21 percent of those who rent their CDs (they eschewed cassettes from the start) also download titles.

How to make a profit on downloads, however, is the 2.2-million-dollar question. That’s how much—despite its revenue being up 25 percent over last year—Audible posted as a loss for the second quarter of 2006.

Serious listeners: will they give up their cassettes, their CDs?
It’s hard to know where to begin to describe how serious David Chasey is about audiobooks, but his headphones are as good a place as any. Those would be the E4c Sound Isolating Earphones made by Shure. Earpieces fit comfortably in his ear, blocking outside noise, and the sound reproduction is astonishing.

“I think I’m getting over 20-decibel blockage,” Chasey says, and that sounds impressive, even if you haven’t a clue what it means.

They retail for $319. Worth every cent to Chasey, who, when he commutes to his job in Pittsburgh on public transportation and listens on his iPod to, say, James Joyce’s ULYSSES, does not care to hear you and your buddy droning on about the Steelers, thank you very much. Even when he’s mowing his lawn, he remains in an aural cocoon: He puts 24-decibel-blocking earmuffs over his earphones.

Chasey has been listening to books for over 20 years. “With cassettes you were walking down the street turning them over every 45 minutes and running through batteries like there’s no tomorrow,” Chasey says. “CD players are worse—you get through maybe two CDs before you burn through the batteries.” He’s been a member of Audible since 2000, and is grandfathered in on a “frequent listener” program that’s long gone: He can download six books a month for only $30. That’s like one of those crazy New York rent-control stories where someone is living in Greenwich Village for $200 a month—he’s downloading six books for well under the price he’d pay for a CD version of one.

Chasey owns plenty of books on cassette that he bought long ago. Now, however, instead of replaying the tapes when he wishes to re-listen, he uses a book credit to download the title from Audible so he doesn’t have to “monkey with a cassette.”

Mary Beth Roche, publisher of Audio Renaissance, offers a metaphor for the way cassette sales are dropping and downloadable sales are rising at her company. “A year ago, cassettes and downloads met on the escalator as cassettes were going down and downloads were going up,” she says. Today, she says her company releases “only a handful of titles on cassette—maybe 5 percent.”

At Hachette Audio (formerly Time Warner AudioBooks), Maja Thomas says they’re now only doing cassette versions for the “really big blockbusters.” Nevertheless, she says, “cassettes are still a major part of our revenue stream. Revenue’s greater for cassettes than downloadable audiobooks—it’s just not as sexy.”

Thomas is on a mission to sell audiobooks to people who, well, don’t buy audiobooks. Her thinking goes like this: It used to be that people who loved audiobooks would find their way to portable players. Now people who love their iPods and other portable players are looking for more content to put on them—and finding their way to audiobooks. (With Audible alone, if they have 308,000 members and, as the company maintains, half of them never listened to an audiobook before downloading, that’s 154,000 regular listeners who were audiobook virgins until they got iPods.)

With the audiobook version of Jon Stewart’s AMERICA, Thomas worked with Audible (which also provides downloadable books to iTunes and Amazon.com) to release the audio version of the book three weeks before the print version was published. “We positioned it on iTunes as Jon Stewart content instead of, ‘Here’s a new audiobook,’” says Thomas. “We communicate well with people who read and who listen to audiobooks, but we also want to communicate with people who don’t think of themselves as having that same habit. When you’ve got a brand like Jon Stewart, if you’re going to wave flags, people only respond to the flag that they know.”

At Harper Audio, publisher Ana Maria Allessi has been keeping an eye on the relationship of sales of digital downloads with sales of CDs. The latest Audio Publishers Association survey indicates 17 percent of those aged 18-24 listen to downloaded books, while just 6.4 percent of those aged 45-64 do. So you might expect to see different buying patterns with the double-clickers. “We thought at a certain point we’d start to see a different demographic buying digital downloads,” Allessi says. “We thought chick lit or cutting edge or whatever would appeal to a younger demographic and quickly rise to the top of downloads. But so far, the popularity of a title’s download has been pretty darn consistent with the popularity of the CD.”

Because little is spent on marketing and advertising audiobooks, success is still dependent on the success of the hard cover, Allessi explains. “We’re riding the marketing effort of the hard cover.”

At Recorded Books, which still releases every title on cassette as well as CD and has both sales and direct-to-consumer rental programs, Brian Downing has been scratching his head lately. “On rentals we’re still renting more cassettes than CDs,” Downing says. “It’s absolutely stunning. I thought I was getting wrong information from the IT department. I thought it might just be the older customers, but with newly acquired customers we’re finding the same thing. Maybe there are still more cassette players out there than we realize.”

Recorded Books’ sales of CDs, meanwhile, are much stronger than sales of cassettes. And while Downing is decidedly bullish on downloads, the company is still pulling in more greenbacks with cassettes. That’s largely a function of how little money they make per download, says Downing. If an audiobook is selling effectively for $11 on Audible (members get two monthly book credits for $22), Recorded Books makes a lot less than if they sell a cassette version for $40 or more. “It takes a lot of downloads to reach one cassette,” says Downing.

Still, Downing expects that in another three or four years, he won’t be releasing any titles on cassette. He won’t be nostalgic for cassettes when they go away, or for CDs should they ever be made obsolete by downloads or some other format. He can rhapsodize about the quality of Recorded Books’ master recordings, but not about whatever form of plastic they roll those recordings onto for listeners. “There’s a certain feel to a printed book,” Downing says. “But I’ve never seen anyone decorate a house with audiobooks.”

Years ago, before Collier Black became such a die-hard iPod fan, he used to listen to cassettes and found the audiobook selection so limited that he’d end up buying some clunkers. “I’d be listening to a cassette in my car and I’d say, ‘This is just a bunch of tripe,’ and I’d actually throw it out the window. I have littered before.” But if he downloads something he doesn’t like, he certainly won’t be tossing his beloved iPod onto the interstate.

“Ordinarily I’m not a walking commercial for anything,” Black says. “But I’d rather give up television and everything else than give up my audiobooks and my iPod.”—Andrew Adam Newman

OCT/NOV 06
© AudioFile 2006, Portland, Maine

Illustration © J.D. King