Sidebar: ? Playing Audible Files Foy Sperring's vision of the future looks a lot like an episode of 'Star Trek.'
'They're all carrying handheld devices and we're all going to be doing the same,' predicts Sperring, director of marketing for Audible Inc., a New Jersey-based company that has become a proving ground for a novel concept in Web-based journalism: consumers actually paying for news content.
For a fee, Audible supplies downloadable digital audio versions of The Wall Street Journal, The New York Times, The Economist, and even National Public Radio programs that can be listened to on battery-powered, handheld devices. [See Playing Audible Files sidebar.]
While most publishers view their involvement with Audible as more of an experiment than an engine of significant revenue, they are intrigued by the possibilities.
'A lot of what we can't quite figure out about digital news content is how you make money distributing it,' explains Tom Baker, vice president of The Wall Street Journal Interactive. 'Here was a subscriber model that worked. People understood this was something you had to pay for.'
Beth O'Rorke, COO of The Economist Group, said that with consumers increasingly demanding convenience, it was a natural step for them to consider providing their weekly newsmagazine's material in an audio format that could be listened to during a daily commute. 'We thought, why not let's give it a ride?' said O'Rorke. 'We were surprised at the amount of usage we have gotten over the last year.'
If You Record It, They Will Come
Audible, a company founded in 1995 that recently filed for IPO, has a small but loyal user base of 53,000. The primary source of its revenues is selling audio books -- essentially digital versions of books on tape. But they have begun offering more and more news content because of demand from their subscribers. News content is relatively cheap. The daily 45-minute New York Times Audio Digest, for example, is available for $49.95 a year.
Among the more popular downloads is NPR's 'Fresh Air.' Although it is available free on the radio, Sperring says customers are willing to pay to 'time shift' the program, which airs in the afternoon when many people are at work.
Audible has also signed deals to provide selected material from the Harvard Business Review and recently began offering Slate in audio format.
Slate's publisher Scott Moore said he believed that audio was particularly conducive to delivering the more in-depth analysis and lengthier commentary that his online magazine specializes in. 'The key advantage for this form factor is you can time shift,' said Moore. 'A radio station may or may not have what you want when you want to listen to it. That's not to say [audio downloads] are going to replace radio, but it's a significant value added.'
While the recording industry continues to battle over the adoption of a common secure standard for digital music delivery, Audible has calmed publisher concerns by delivering content in a proprietary format called Cipro Codex, which is encrypted and targeted, meaning that each subscriber can designate two desktop and three mobile devices upon which files can be played.
'That's how we've been able to secure one hundred of the world's publishers,' said Sperring. (Audible also supplies an MP3 version of the New York Times that is available from MP3.com and can be listened to on PC desktops and Windows CE devices.)
Another major advantage that Audible's standard has over MP3 and other challengers being devised by the music industry is that it is specifically designed for voice transmission. This translates into smaller file sizes. For example, the New York Times Audio Digest in MP3 format takes up nearly 10 Mb of space while the Cipro-formatted version clocks in at just under 1.5 Mb.
What You Hear is What You Get
Publishing partners tend to follow Audible's lead when choosing content for their digital audio versions. The interactive nature of its Web site provides Audible with valuable information about its users and the company tailors its partnering choices to their needs and interests.
'We let ourselves be guided by what they know and what their customers [want],' said Baker when asked about how the WSJ goes about choosing which stories will end up in its twice daily audio reports.
New York Times listeners, said Sperring, tend to be younger (26-35), hipper and employed in a computer-related field, though the second largest group is academics. Sixty percent of them are male. 'They're more interested in social activities and opinions than how their stock did,' he said. The average Wall Street Journal listener is slightly older, early to late 30s, with a disposable income greater than $65,000. ? Baker said he thought the service was of particular interest to busy commuters and business travelers who don't always find the time to read or can't get access to a newspaper. 'It's for while you're on the move, for people who can't get to the paper,' he explained. 'Give me a radio show so I don't look stupid.'
Not everybody is sanguine about the future of personalized digital audio downloads. Some believe the market is limited to a relatively small percentage of people who can't get regular access to other forms of news, including the coming wave of downloadable print content available on such handheld devices as Palm Pilots and Windows CE devices. The Los Angeles Times, for example, held discussions with Audible but currently has no plans to add audio service. Reuters has also looked into the market but so far stayed out.
'We've dabbled in audio a couple of times,' said Andrew Nibley, president of Reuters New Media. 'It has never been exactly right. Though I think audio is a place to take off.'
Jill House, a wireless device analyst at technology research firm IDC, said she thought it would remain a niche market for the foreseeable future.
'At the moment, I don't think it's that compelling,' said House. 'I get 35 percent of my news from the radio. Until hardware issues are addressed like battery life, it's a lot easier to listen to the radio than setting up a content profile, making sure it's up to date.'
If audio does prove popular, she added, it could give a significant advantage to Windows CE platforms over the makers of the Palm Pilot, who so far have not announced plans to add built-in audio capabilities.
Slate's Moore is more optimistic: 'You could have said the same things about getting newspapers over the Internet three years ago. Well, I think the jury is pretty well in on that question.'