Audio Book Club Inc., Boca Raton, FL, has entered into an agreement to acquire Audiobooks Direct, a business of Doubleday Direct Inc. Terms were not disclosed.
Audio Book said that the Doubleday unit’s member file of over 450,000 names brings its own total member and customer database to about 2 million, making it the largest seller of audiobooks over the Internet and also the biggest audiobook club.
Audio Book bought Columbia House’s audiobook division in December.
The new agreement also includes a joint marketing arrangement that grants Audio Book the exclusive right with respect to audiobooks to insert its acquisition materials into the member mailings of Doubleday Direct’s consumer book clubs and Doubleday Select’s professional book clubs. The agreement also covers distributing its member solicitation packages via direct mail to the active and inactive Doubleday lists. Doubleday’s total file has 14 million names.
Meanwhile, Audio Book reported a net loss of $7 million on gross sales of $22.2 million for the year ended December 31, 1998, compared with a net loss of $4.9 million on net sales of $15.1 million in 1997.
For the quarter, the company had a net loss of $3 million on net sales of $6.1 million, compared with a net loss of $2.4 million on net sales of $4.8 million for the same period last year.
The company blamed its loss for 1998 on its “growth strategy.” During 1998, Audio Book committed about $7.5 million toward new member recruitment and branding via the Internet and direct mail.
It said that about 32% of the customers acquired through its new efforts in 1998 were obtained via the Internet, the costs of which were 960% higher in January 1998 then they are today, according to the company.
