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1 Audio that speaks to you wherever you are™ Joe Flowers CS453

2 Introduction Audible converts audiobooks and other spoken audio programs into digital files Buy an audiobook from Audible and it’s yours forever to listen to as many times as you like. [1]

3 Ways To Listen  Download and listen to audio on your computer  Streamed over the internet on your computer  Transfer audio from your computer to a CD or AudibleReady player  Proprietary file format, more compressed than mp3’s [1]

4 Types of Content  Non-fiction Highly personalized listening drawn from sources such as The Wall Street Journal, The New York Times [2] Other  Novels  Proprietary content [3] Magazine editions Growing library of comedy Joint venture with Random House

5 How To Find Content  Search by title or author  Browse by category  Check out the best seller list  Music review from the latest audio magazines and newspapers [1]

6 Get some audio!  A la carte [6] Buy on a title by title basis  Subscription plans Get one audio magazine, newspaper or radio program plus one audiobook each month for just $14.95 a month. Get two audiobooks each month for just $19.95 a month.  Automated downloads iTunes for Mac AudibleManager for PC

7 Hardware requirements [4]  PC Windows 98 or higher  Macintosh OSX with iTunes 3 or above  Hardware to listen Audible Otis MP3 player (free with 1 yr subscription) Palm Handheld Apple iPod Other players…

8 History  Founded by Jeffrey Katz [3]  Publicly traded since the summer of 1999 [2]  Microsoft invested early on and now has investments totaling $15 million [5]

9 Partners  Microsoft  Amazon  Random House [2]  Joint marketing agreements with device manufacturers including… [3] Hewlett-Packard Sony Electronics Apple

10 Ipod integration [5]  Integrates with iTunes on OSX  Comes with AudibleManager for PC [6]  Receive $100 off a new Apple iPod when you purchase a 1 year subscription [7]

11 Awards  CNET editor’s choice [8]  Named to Deloitte & Touche's prestigious Technology Fast 50 Program for New Jersey [9]

12 Growth [9]

13 Business Model [2] “Audible was designed to become an extremely profitable enterprise — and designed to get to that state as the clear leader. This is a company that does not need that many consumers paying us on a regular basis to be a very profitable enterprise, because of the fundamental structure of the business model. As we scale up the infrastructure needed to serve large numbers of customers — because of the efficient nature of the inventory and delivery structure — it doesn’t need to scale that heavily.”

14 Business Model (cont’d) Target Operating Model: [3]  Revenue - 100%  Content Costs - 30%  Marketing Costs - 25%  Operation Costs - 15%  Pre-tax Margin - 30%

15 Ownership - January 15, 2002 Above 5%: [3]  Microsoft – 35.5 %  – 6.7 %  Donald Katz (founder) – 5.7 %  Management/Directors – 8.8 %

16 Distribution [3]    Affiliates program  Corporate Sites (B2B)  Library program

17 Growth/Customer Base [3]  Plan to add a couple of thousand hours of content per quarter.  No overseas advertising yet they have customers in 100 nations.  Demographics still skews to men, average income $90k, 40% have advanced degrees, but they are seeing a move down from high-income users. Most use for commuting and exercising, with some listening at desktop for short duration content items.

18 Competition [3]  Traditional and online retail stores, catalogs, clubs, and libraries  Websites that offer streaming audio utilizing Windows Media Player or RealPlayer 

19 Will They Make It? Long term potential Loyal Subscriber base Sweet Spot Operation Rise of broadband Prognosis Positive!

20 References 1. (click “How it works”) (click “What I need”) _ html?legacy=cnet& _ html?legacy=cnet&dir 9. &o_symb=ADBL&x=33&y=18 &o_symb=ADBL&x=33&y= D4BE5A3C9C}&newsid= &symb=ADBL&sid=152157{2D0BA43F-70FB-474D-B0B4- 85D4BE5A3C9C}&newsid= &symb=ADBL&sid=

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