Audiobooks.com aims to be ‘the next big Canadian tech story’
Burlington-based company plans to unveil new app that lets users create audiobooks
Having inched market share from an industry-leading American giant, Burlington’s Audiobooks.com is counting on its latest technological innovation to gain even more adherents and revolutionize the category. This spring, the company will officially unveil Recordio, a free app with automated voice-optimization tools that will enable people to create their own audiobooks.
“We’re going to explode the number of audiobooks out there, which will also grow the market pretty substantially,” said Audiobooks CEO Sanjay Singhal. He likens the potential impact to the ascendance of YouTube, Wattpad and iTunes and Soundcloud for video, ebooks and music, respectively.
“Audiobooks is a $1-billion-a-year industry right now; that’s going to double in the next five years and we’re going to get half that market, because of our name and our technology,” said Singhal.
Of the 200,000 ebooks published on Amazon each year, only about 6 per cent get made into audiobooks, given the prohibitive $10,000 outlay for sound engineer, recording studio and narrator, he said.
Authors utilizing Recordio will sign an agreement to have their audiobook listed on Audiobooks.com and other audiobook retail sites, explained Singhal. “Whether they want to distribute it free, or charge and get royalties, we’ll make it dead simple. If authors choose to use our publishing portal, then we’ll take a fraction of the royalties, but we’ll also be able to negotiate higher royalties because we’re a recognized publisher to the retailers.”
The software will debut with him reading his forthcoming memoir.
“It was way harder than I thought it was going to be; I had to learn how to speak properly,” said Singhal who expects established narrators to embrace the app.
“People who want to become professionals at this, or who are already making audiobooks are going to scour the (ebook catalogue) and say ‘Give me the rights to your book and we’ll split the royalties 50-50.’ ”
Inspired by Netflix’s DVD rental model, the company launched in 2003 as Simply Audiobooks, mailing out audiobook rentals, and at one point it had a retail store in Toronto’s financial district. Following Netflix’s evolution, they started streaming audiobooks in 2011. Audiobooks.com began with unlimited access for a monthly fee, but a year in switched to a cheaper, subscription-based model similar to Audible’s. With 40,000 titles on offer, they now charge $14.95 for one book a month.
CD rentals still represent about 30 per cent of the business, “but is falling pretty dramatically every month,” said Singhal.
“Our demographic for CDs is even older than our demographic for streaming products (average age 34), but those people quit when they die. Literally, we get emails from people saying ‘You have to turn off grandma’s billing, because she’s dead.’ They love the product and we’re the only game in town for CD shipping.”
With 7 per cent, Audiobooks.com is in second place to Audible’s 90-per-cent market share. But that’s up from just 2 per cent two years ago.
In the U.S., select 2015 Jaguar Land Rover vehicles come with an Audiobooks option on the console. Owners subscribe to the service like they do for satellite radio. Similarly equipped Canadian cars will arrive this spring, with GM-manufactured Cadillacs and Buicks to follow next year.
Even without auto revenues kicking in, Audiobooks.com sales have doubled in the last year to $8.4 million (overall company revenues are about $20 million), “because people are discovering that digitally streaming is more convenient than listening to CDs or downloading,” said Singhal.
“Only 20 per cent of people have ever listened to an audiobook; only 5 per cent actively listen to audiobooks; and 50 per cent don’t know what an audiobook is. So what happens when you sit down in a car and there’s a button on your dash that says Audiobooks? We think a lot of people are going to say ‘What does this button do?’ and that’s going to be a tremendous uptick in our business. I think in five years we have a legitimate shot at being a $100-million business.”
Headquartered in a nondescript, lowrise building in a quiet industrial park just off the QEW, Audiobooks.com and its floor-to-ceiling waterfall, free beverages, on-site masseuse, Ping-Pong table and youngish staff of 30, seem more suited for a home on King St. W. with all the other quirky startups.
But India-born, New-Brunswick-raised Singhal, a co-founder and sole owner of the private company since buying out his last partner in 2014, is more cautious than his swift Tesla augurs.
The 49-year-old father of three learned the hard way: through two devastating business failures in the ’90s — a VHS home-delivery service; and a pre-Black-Berry mobile email device. His lessons were: “I’m not as smart as I think I am; and don’t spend money I don’t have.” So even though Audiobooks.com’s bankers and advisers are pushing to put the company on the TSX, Singhal is not biting.
“We’ve been profitable from the get go; we’ve got no profit motive to get acquired or go public; the company does quite well,” he said. “We just want to be the next big Canadian tech story.”
“Whether they want to distribute it for free, or charge and get royalties, we’ll make it dead simple.” SANJAY SINGHAL AUDIOBOOKS .COM CEO