Saturday, February 09, 2008

Beware of Gorillas


When faced with a Gorilla you have a limited number of choices. You can turnaround and walk away and pretend he wasn’t there. You can smile and concede the next move is his and that he now owns the garden. You can take him on ‘David and Goliath’ style. You can call your friends, the local zoo and hope that they turn up in time.

Audiobook publishers have now entered the garden and are faced with a new Gorilla Amazon / Audible sitting smiling at them. They understand Amazom and its audiobook position and they understand Audible and it position but what nobody but Amazon understands, is what their position is going forward. So just like all Gorillas they are unpredictable.

Audible has established an audio dominance based on largely on their DRM technology and ability to deploy it onto multiple platforms where there is no competitive offer and also their exclusive deal with iTunes, which is licensed till 2010. Amazon has its audio publishing publisher Brilliance, a subsidiary CustomFlix which supports both standard CD and mp3-CD audiobook formats in its "disc on demand" service which produces audio titles on CD on demand.

We have questioned what role Amazon will play; publisher, aggregator, retailer, technologist or all?

We have asked how the relationship will evolve when Amazon wants to go DRM free and MP3 on music and Audible, proprietary DRM phobic on audiobooks. Where does it leave iTunes with Amazon sitting now in their back garden?

Publisher’s have long stressed the need for greater competition but have understandably supported the DRM position and thereby restricted the market. Retailers have had little download options to date and even the few that have managed to do a ‘white label’ deal with Audible, now could find the tables shifting. Direct Sales will always exist but consumers want aggregation and choice.

The irony in much of this is the fact that it is so simple to take an audio CD and rip it to create a digital file. Its not rocket science and anyone can do it! So why the download DRM fixation and why do we assume that audiobooks will be treated any different to music, which has clearly woken up to the DRM myths. It would be very interesting to understand why Penguin withdrew for the recent MP3 audio trials whilst Random House didn’t. It will be also interesting to understand the potential implications of audio watermarking technology as a more passive and acceptable alternative to DRM.

The audiobook CD has still got a life, albeit a short one and one. Perhaps its time to think differently about the content and package and not merely replicate the CD as a download. After all, the format is identical.

It is essential the current retail channel is also able to participate in the audiobook download offer. Cutting out this channel will be far more dangerous than with ebooks where the physical book will always have a role and ebooks may only be a small slice of the market. If the audiobook market flips to downloads and an on demand model there will only be one Gorrilla sitting in the back garden and guess who will be dictating the terms?