Amazon.com looks determined to compete head-on with iTunes, Xbox Live, the Netflix-LG partnership and other online services that offer videos, audios and music.
It’s paying $300 million to acquire Audible.com, reportedly “the leading online provider of premium digital spoken word audio content, specializing in digital audio editions of books, newspapers and magazines, television and radio programs and original programming.” Audible has more than 80,000 programs, including audio books and spoken-word audio content from news outlets such as The New York Times and The New Yorker.
The Audible acquisition is one more signal – if any more were needed – of the coming clash of titans – Amazon, Apple, Sony (although it’s not yet got its online service up and running), Microsoft and Netflix for prime time on consumers’ TV sets.
Amazon.com, perhaps because of its heritage as a place to buy books, music CDs and DVDs, seems to understand better than Apple the importance of having lots of compelling content. Until Apple recently secured movie rental deals with the studios, it was on a downward spiral – having lost NBC’s TV shows plus DRM free music from the likes of Warner, Universal and Sony BMG.
Amazon.com already offers AmazonMP3, which offers high-quality, DRM-free songs, many of which are not available on iTunes in a DRM-free version; Amazon Unbox, which offers full-length feature films and TV shows; Kindle, a wireless portable book reader that provides for a fee downloads of about 90,000 books, blogs, magazines and newspapers for viewing on a high-resolution screen. Wonder if Amazon.com will offer any three-for-one deals that’ll include the digital, the audio and the printed versions of a book?
The Audible acquisition is significant and may result in Apple losing more content. Audible is the exclusive and largest supplier of spoken word content to Apple’s iTunes, which produces almost a third (29% in 2007’s third quarter) of Audible’s revenue. The Apple-Audible contract runs to September 30, 2010.
“Audible.com offers the best customer experience, the widest content selection and the broadest device compatibility in the industry,” said Steve Kessel, Amazon.com’s senior VP for worldwide digital media. “Working together, we can introduce more innovations and bring this format to an even wider audience.”
Audible’s downloads can be played on more than 500 devices including Apple’s iPods and iPhone. Users typically download Audible audios to their PC, and then copy the audio file to their portable media player, mobile phone or personal digital assistants (PDAs).
“This deal brings together two pioneering companies that share a long history of ceaseless focus on improving the customer experience,” said Donald Katz, founder and chief executive of Audible.com. “We are very excited to be joining a company as innovative as Amazon.com.”
Amazon is buying all of Audible’s shares for $11.50 per share. It’s expected to close by the second quarter of 2008.
And, we ask again, where is Sony and its Sony Connect online media service? Perhaps it thinks Blu-ray discs will be the way video content is delivered, rather than the Internet.