Usually market experiments run for a few months; enough time to draw data to evaluate. Penguin Audio books decided not to wait. Just the opposite, they pulled the ripcord on an audio book market experiment with eMusic after just a month’s time.
eMusic is the number two seller of digital music behind iTunes. They made their market by selling unencrypted DRM-Free music. Last month, they expanded into audio books following the same recipe: selling books without digital copyright encryption. Penguin was one of five founding participants in eMusic’s digital books initiative. They offered 150 titles that they were simultaneously selling with copyright protections on iTunes.
Earlier this week Penguin decided to go DRM or bust. They’ll stick with iTunes but are dropping eMusic.
“We’re not going to have our titles on eMusic or with anyone else who sells non-DRM until the landscape shakes out and we feel very comfortable and confident that our titles will not be pirated,” said Dick Hefferman, publisher of Penguin (via NY Times).
The choice appears to have been a high level management decision based on strategy rather than results. While audio books from eMusic are not encrypted they do appear to have a digital watermark that indicates they came from eMusic’s inventory. There have been no reports showing evidence of piracy in the eMusic offering. Just the opposite, Random House, another participant, has reportedly found no copies pirated of their offerings sold at eMusic floating around file sharing networks.
There are questions looming about market sizing (a look at the financials of public audiobook seller Audible suggests it’s relatively small). There are also questions as to whether the experiment will catch on but so far, despite Penguin’s reversal, the eMusic offering is starting out as a success.
The offering is being treated as an unadvertised beta until December still the company says they are beating internal sales projections by a factor of two; selling more than 500 titles a day. And Just as Penguin is stepping away, three more publishers are stepping up.
Penguin left the door open to waddle back in later. That may very well be the case. For now, eMusic will move on without them. The loss of 150 titles will hardly doom the project.
•eMusic Launches Audio Book store (and a deeper look at the online Audiobook marketplace)
•Self Policing Copyright Online
•EMI and DRM Free Music
•Universal Experiments with DRM-Free Audio