25 stocks for NEXT 25 years: Audible - a leader in spoken word content

Posted May 3rd 2007 2:20PM by Georges Yared
Filed under: 25 Stocks for Next 25 Years, Audible Inc (ADBL)

The NEXT company on my list of the top 25 for the NEXT 25 years is New Jersey-based Audible, Inc. (NASDAQ: ADBL). Audible is the leading provider of spoken word content delivered to MP3 players via Audible's website. Spoken word content includes audio books, periodicals, podcasts and material from talk radio shows. Included in Audible's portfolio is nearly 400 content partnerships, 60% of them exclusive.

The beauty of the Audible's business model is the multi-tiered subscription options available to customers. The prices are $14.95 and $22.95 monthly. Each level allows downloading of a daily periodical such as the New York Times or the Wall Street Journal and one to two books depending on the plan. Audible also offers an annual plan priced at $229 and $149, giving a two-month discount. Members are offered continuous discounts on new released books and other promotional items.

Audible has nearly 400,000 members to its subscription model. Customers can also purchase a book or any other Audible product a-la-carte. Audible offers books ranging from best sellers to new releases and classics. The university market is just beginning for Audible as text books are undergoing a digital process and their availability is increasing. No more 30 pound back-packs!

Audible has an exclusive relationship with Apple's (NASDAQ: AAPL) iTunes. It provides all spoken word content to the iTunes store. Apple's iTunes accounts for 27% of Audible's revenues as the iPod from Apple leads the MP3 market with over 70% market share. Apple has promoted Audible's service with every iPod sold, helping to generate new customers and name recognition.

Audible has a market capitalization of $250 million. The revenue estimates for 2007/2008 are $108 million and $140 million respectively. Audible is crossing into profitability on an operating basis and should continue to leverage the installed base of customers.

With the MP3 market gaining momentum and the pricing of such units coming down, Audible has emerged as the premier player in delivering the spoken word. With the educational market just getting started, Audible is perfectly positioned to dominate this segment as well. First is the university sector, and soon the high school sector. Audible is developing other programs for the work place training and continuing educational market.

The market size is massive and worldwide in scope. Audible has the opportunity to become a multi-billion dollar company in the years to come.

Georges Yared is the CIO of Yared Investment Research where he explores more growth stock ideas.

Tags: adbl, audible

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Reader Comments (Page 1 of 1)

5-04-2007 @ 8:38AM

Michael Schneider said...

You have an interesting and surprising choice with Audible. Audible sunk to the penny stock level a few years ago and was trading at as low as 15 cents a share. A couple of years ago New York Times published an item on investing in penny stocks mentioning Audible as a rare stock that made fans happy as it rose from that 15 cent level to the $8.45 where it was at then. I still have a synopsis of the item posted (green label in middle of page) at htpp://www.Barrelomoney.com.