Online audio book leader faces a tough future

Other delivery methods
As sales of Apple Computer Inc.'s iPods cool, Audible has moved into other delivery methods. For example, XM and Audible next year plan to market a new handheld device that can play programs from the satellite radio service and Audible's audio versions of books and newspapers.

In the other recent joint venture, Texas Instruments Inc. would produce chips that permit Audible software to be loaded onto cell phones as well as other devices, allowing users to download and then listen to a book on their phone. (An earlier venture by Audible to deliver content to handheld computers through the AT&T Wireless network was test-marketed but never got off the ground. This product, in contrast, would not be limited to one carrier's network).

In June, Audible entered podcasting, enabling content of periodicals, such as The New York Times and The Wall Street Journal, to be delivered automatically to its customers' devices.

It also has gone international, launching its United Kingdom Web site in June, a site for French language downloads in March, and a German site in December.

All this comes as Audible absorbs NPR's departure, which ended a six-year relationship.

"We are working on a strategy that would be more valuable to our stations and our listeners," NPR spokeswoman Jenny Lawhorn said. "We've been approached by all the major companies involved in podcasting, but we can't say they will play a role in our strategy."

Amazon remains a partner, but it is preparing its own audio section with a wider selection and "one-click shopping," spokeswoman Patty Smith said. Now, people purchasing Audible products at Amazon.com complete the transaction at Audible's Web site.

If Audible founder and CEO Donald Katz is disappointed or worried, it is not apparent.

The NPR separation is merely "a strategic change for both of us," while Amazon faces many technological hurdles if it launches a competing service, he said.

"It's not easy, and we get better at it all the time," Katz said.

As for a possible buyout, Katz responded, "I'd never comment on that. We're pretty happy being Audible right now."

Audible won't disclose how many people are regular subscribers to its service, but said it added 55,400 subscribers in the first three months of the year, compared to 23,000 in the same period a year earlier.

One loyal subscriber is Douglas G. Manter, 44, a computer technician for AT&T Corp. in Englewood, Colo. He turned to Audible nearly four years ago after exhausting the cassette rentals at a book store.

His subscription, $15.95 for two books a month, allows him to stuff his iPod with "escapist" literature and historical fiction.

"I don't think they should be too threatened by Amazon.com," said Manter, who praised the company's technical support. "They have their act together."

Less popular was Audible's decision announced in February to reinvest money in expansion rather than simply return it to the bottom line. Investors reacted by slashing Audible's stock price into the teens from a 52-week high of $30.65 in December.

Katz, an ex-writer who started Audible in 1995, defended the reinvestment, saying it was necessary to develop automated delivery of audio to cell phones and other projects.

"Doing the best thing for the mid-term and long-term," he said, "superseded doing the best thing for the short term."

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