Amazon announced today that they are picking up Audible.com for a cool $300 million. As a customer (and some might say a fan) of both companies I have more than a passing interest in how this will all work out. Clearly Audible has established itself as the market leader in the digital audio book space. It's also no secret that Amazon is looking to scale in all digital media in a big way. This transaction represents a logical tuck-in acquisition that complements Amazon's existing products in digital music and movies.
The more interesting question is how this will impact the brewing competition between Amazon and Apple's iTunes Music Store. Audible is the incumbent provider of digital audio book content on iTMS, and at the very least it represents a major step in achieving competitive parity from a "products offered" basis between the two. Beyond that step, one could envision the deal dynamics between Audible and Apple changing at some point in the future, now that they have another major channel for their products.
In terms of all media, digital audio books are a relatively small component (in the sub-billion dollar range), but reports indicate that over 25% of Americans listen to some form of audio books, and with the proliferation and low cost of digital players this is clearly a segment to watch. After all, if we listen to Steve Jobs we know that physical book reading is on the decline.
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