Bill Katz

Last weekend, Audible unveiled their Wordcast system for tracking spoken word downloads. It’s an innovative system that packages hosting, support, and most importantly, a system that supplies a number of tools and metrics necessary to advertisers—dynamic ad insertion, measuring how many people actually heard the ads, relaying where they stop listening, etc. It’s a system that’s technically not possible with MP3 because it requires callbacks to the server; you can’t figure out whether a downloaded file is actually played unless the player tells you, and you certainly can’t track forwarded programs unless there’s a callback.

I’ve been a long-time Audible.com enthusiast and investor. I like the management team. I think the company loves human creativity and Audible provides a way for us to “read” more. I’m a happy customer because I’ve listened to fantastic books I had no time to read. So I’m sad to see the strident blog warfare and the portrayal of Audible as an evil company trying to hijack podcasting, whatever that term really means.

Podcasting is a nebulous term like AJAX and Web 2.0.

Let’s get our terminology straight. “Podcasts” clearly started life with a reference to Apple’s iPod, which supports MP3 and at least two different proprietary formats, Apple’s AAC and Audible’s AA. Over time, it has evolved to include MP3 broadcasts to non-iPod players. Some blogging-powers-that-be apparently require the definition to be MP3, period. I believe that a majority of the podcast consumers associate “podcasting” with free and open format broadcasts. Fine. I think there’s a little amnesia about the history of MP3 patent royalties and the notion that MP3 is as unencumbered as some other formats, but I do think MP3 is a fine, old standard.

So let’s toss “podcasting” out and use “spoken word broadcasts.” It’s a big spoken word world, and not all of it has to be free or even ad-free. Audible’s Wordcast provides a clear improvement in metrics technology for spoken word broadcasts. Does anyone refute this statement?

Audible’s format works with iTunes, iPod, Windows players, Pocket PCs—about 160 devices in total. It has better coverage than Windows Media and plays on the iPod. Audible has released developer kits for wider spread of their AA format, but it already has a huge reach due to its inclusion in Apple products, which dominate the digital audio player market. So if you want fine-grained ways of measuring your content distribution and you want it in a format that plays in most devices, Audible Wordcast provides a solution.

DRM technology can be used in non-DRM ways

With all the flames bouncing between blogs, I think a very cool aspect of the rollout has been missed. Audible WordCast is only possible because they reactivated dormant features of their player platform, in particular the “call home” feature. Audible enthusiasts know the company developed the first portable digital audio player. I’ve still got my little device with a whopping 4 MB, and even with high compression ratios, a long audiobook wouldn’t fit in that space. So Audible saved where you stopped listening in a file and allowed the device to call home to the mothership. In geek-speak, Audible’s device is stateful and provides callback capabilities. MP3 supports neither of those critical features, and you usually won’t find them outside of DRM technologies. Most Audible subscribers know that bookmarking is a key feature that’s not available in MP3 and many Windows Media players.

It’s possible that people tune out whenever they hear DRM. It’s kind of a dirty word. But for free, ad-supported Audible Wordcasts, the proprietary platform doesn’t prevent you from giving the program to a friend, and it will provide benefits like bookmarking and metrics for advertisers. The good parts of the underlying technology can be used without turning on the “lock” elements.

One Free Size does not fit all

I could easily see a separate market that coexists with the free MP3 market. There has been outcry over the large 3 cent fee for the WordCast service. For some markets, like ad-free homegrown programming to hundreds of thousands of listeners, this fee may be far too high. (I would question the business sense of the content producers, but to each his own.) For others like Wall Street and Medicine, this fee is a pittance. Some markets will require secure, paid subscriptions, which Audible Wordcast provides.

I’ve personally seen how much Pharma is willing to spend on medical students, residents, and attendings. The 3 cents per listener is probably a rounding error for medical training material.

If Audible has overpriced itself, time and the markets will let us know.

Proprietary can coexist with Free/Open Source/Commodity

Open format/open source lovers shouldn’t circle the wagons and pull out the rifles. Both formats, MP3 and Audible’s AA, play in the majority of players. History shows that features first available in proprietary systems and formats eventually trickle into open format and open source solutions. Look at the feature set of Oracle databases and Microsoft SQL Server that are now available in PostgreSQL and even MySQL. Microsoft Office’s share is being eroded by OpenOffice, and the case study of Massachusetts will accelerate that conversion. There’s every reason to believe that this trend is accelerating. How many people believe a new Microsoft-like monopoly can rear its ugly head in the current XML/Web 2.0/Open Source environment?

Audible will find users for their new service at some price point, and eventually, I think we’ll see similar tracking features in a completely open format, unless the cost of licensing drops to negligable amounts. In either case, the cost will dramatically drop with time and content producers will move to the platform with most bang for the buck. Let the market decide. And for the content producers who choose Audible Wordcast now, nothing prevents them from re-encoding their entire catalog in a new open format, whenever it becomes available.