Audible.com's Don Katz wasn't gloating when he visited London recently - but he had a very good reason to feel pleased with himself. The spoken books company was crucified by investors when, two years ago, it announced it was launching a UK operation, knocking a third off the value of the business.
Now two years on from the June 2005 launch, the UK business has turned a profit. The Anglophile CEO's hunch that the British liked to hear books read was born out in 2004 by the strong data following a partnership with iTunes UK. Today it turns a profit even with the Apple excluded.
Audible.com was founded an eternity ago, in 1995, and is one of a handful of internet dotcoms to go public during the first bubble, and yet survive. "I started the business too early," he jokes now.
Katz's view is that the potential market that demands printed matter in audible form is vast - people can consume the material while driving, jogging, or gardening - but they find the immersive experience attractive.
"When text appeared the Greeks thought it was basically very suspect, and the true intellectual facilities would be atrophied by writing stuff down," he says. "Text was the 'disruptive technology' of the moment and it's had a great run - but there are other ways of creating powerful words."
So who's getting into Audible, we wondered?
"Half of our customers had never been fans of audio books because they'd never been exposed to them," he told us. "But they moved to other material we had to offer - comedy, erotica, and also educational applications." Self-improvement books are also popular, he says, with older subscribers returning to books in an audible form.
Katz has used the vast potential of the market to justify his decision to invest heavily in R&D to support new platforms. Audible.com isn't run as a cash cow for shareholders, although it has returned to within a whisker of break-even in the most recent quarter [Q2 earnings statement and transcript]. For example, 15 to 25 new devices appear each quarter, he says, with some surprising consequences - onboard SatNav players have been one of the biggest successes.
"Garmin and TomTom have given us the highest conversion rate of new customers we've ever seen," he says. "It isn't obvious, but the implementation of Audible on these is high profile and very easy to use."
What did he make of Kevin Kelly's contention that the book would disappear, dissolving into a (no kidding) "liquid fabric" (and prompting a Reg reader competition)? At around the same time bloggers were complaining of "burn out". Were the two related?
"There's something going on that touches on the future of reading. If you watch teenagers and acquire a sense of their culture, you see that silent reading is becoming a challenge: multi-sensory acquisition and input and assimilation is changing," Katz notes.
"But there is something primitively Freudian about the immersive experience." ®