Now Hear This

Montclair Internet entrepreneur Don Katz has made the spoken word Audible.

On a Thursday near midnight—when most 55-year-olds are in bed and even the busiest CEOs presumably are winding down—Don Katz is skating across the ice of Floyd Hall Arena at Montclair State University with the puck on his stick, looking for a teammate.

Katz, founder and CEO of Audible Inc., plays hockey twice a week in competitive amateur leagues in which many players are half his age. Floyd Hall Arena is one of the venues where he and his teammates lace up. On this night, he spots a cutter streaking toward the net and delivers a precise pass that leads to the game’s first goal.

Scoring is atypical for Katz, a defensive specialist. “My style is pretty scrappy and not that skill oriented,” he explains. “I try to make sure nobody scores when I’m on the ice. And I’m pretty good at it—I’m pretty effective, even against kids. It’s mostly because I think I know what people are going to do.”

Anticipating what people will do is a skill Katz has proven off the ice as well. In 1995, when most audio books were still on cassette, Katz created Audible with the ultimate aim of making spoken-word content available digitally. In 1997 Audible launched its website ( and commercialized the first digital audio player—four years before Apple introduced the iPod. Later, the company struck a deal with Apple that made all ensuing iPods compatible with Audible software. Since 2003 Audible has been the exclusive global supplier of audio books to iTunes Music Stores.

Audible’s first audio player is now a museum piece—literally. It’s in the Smithsonian. Katz is quite happy to leave it there. Audible’s more than 400,000 subscribers can listen to its 140,000 hours of content on hundreds of devices in addition to iPods, including MP3 players, PDAs, smartphones, and computers. In 2004 Ernst & Young named Katz the New Jersey Entrepreneur of the Year. Last spring he was honored with a rarely given special achievement award by the Audio Publishers Association, the equivalent of the Academy Awards’ Irving G. Thalberg Memorial Award.

Katz, who lives in Montclair with his wife and three children, launched Audible from a former dentist’s suite in town. He later moved his nine employees to offices in Wayne. Last spring the company’s workforce—now totaling 170—moved into the top two floors of a new office building at 1 Washington Park in Newark. It overlooks the Newark Bears baseball stadium, and is just a short walk from the new home of his favorite team, the Devils.

“Don believes you can do well and do good at the same time,” says Newark Mayor Cory Booker. “He really believes that Newark is a place of possibilities. He’s not a man of great rhetoric, but of great action.”

Katz’s wife, Leslie Larson, puts it another way. “Don is a man with a lot of passion,” she says. Larson met Katz, then still a journalist, in 1982 on a whitewater rafting trip in Pennsylvania. On their first date he took her to an Ethiopian restaurant in New York. (He’d become familiar with Ethiopian culture while reporting from the country for Rolling Stone.) “He’s driven by his passions,” she says. “He is not driven by money or prestige.”

Business executives are a life-form Katz used to write about. A Chicago native, he earned degrees from NYU and the London School of Economics and made his name as a wide-ranging writer for magazines such as Rolling Stone and Esquire. He also wrote three intensively reported books: The Big Store: Inside the Crisis and Revolution at Sears (1987), Home Fires: An Intimate Portrait of One Middle-Class Family in Postwar America (1992), and Just Do It: The Nike Spirit in the Corporate World (1994).

Beginning research for a fourth book, on technology, he called his friend and former NYU roommate, Ed Lau, who was working in Silicon Valley.

“We started talking about the idea that you could send data through these emerging Internet networks and how the spoken word was much more compressible than video and music,” Katz recalls. “Then we began to talk about the audio book market, and we sort of rolled from there.”

In his research, Katz came across an interesting statistic: About 93 million Americans drove to work alone each day. “If you ask people if they have enough time to read what they want to read, or what they ought to read to be successful,” Katz says, “all the surveys say, ‘No, we don’t have enough time.’ The idea of Audible is to get them back that time.”

Katz tabled the book and started a company. “It’s so rare,” says New York Times business columnist Joe Nocera. “Journalists are observers, not doers. Most journalists who switch careers go into public relations to make more money. Don left for a completely different reason.”

An early Audible slogan described its mission as providing news, entertainment, and enrichment for “when your eyes are busy but your mind is free.” That is still the goal, but the road often has been rocky. After taking Audible public in 1999, Katz ran smack into the Internet bubble.

“There was a period where every Internet company was going out of business or couldn’t get financing,” he says. “Someone told me that out of 1,500 public Internet companies, there were fewer than 90 that made it through the bubble breaking in 2000 to 2003. We definitely got down to the wire several times.”

Being too far ahead of the consumer was one problem. Audible signed Robin Williams to create exclusive comedy segments. “In 2000, we had him going on Jay Leno’s show talking about Audible and his programming, and people didn’t know what he was talking about,” Katz says.

Initially, highbrows raised eyebrows. “I got sort of attacked because I have a relatively literary background,” Katz says. “The status quo in the literary world was that text was special—it shouldn’t be turned into anything else, like a movie, a TV show, or an audiobook.” Women in Larson’s book club at first took the position that listening to a book instead of reading it was “cheating.”

Guy Story, Audible’s chief scientist, whom Katz recruited from Bell Labs, attributes the company’s survival to “the fact that we do not give up,” a message that comes right from the top.

 “The fact that [Katz] got through the dot-com bust is an incredible testament to his internal fortitude and sheer drive to make this work,” says Nocera.

The boss also has proved willing to take on so-called “patent trolls”—companies who sue other companies for copyright infringement, not always based on a legitimate claim but in the hope that the defendant will pay them to go away, which often happens.

In 2000 a little-known company called Digeo challenged one of Audible’s patents. Digeo turned out to be backed by the deep-pocketed Paul Allen, a co-founder of Microsoft. Katz refused to fold. Audible won in trial court and is headed to Federal appeals court to recover legal expenses.

Part of Katz’s faith in Audible’s future stems from his own experience as a parent. “If you watch a teenager doing his or her homework,” he says, “you see that many are not as comfortable just sitting in a room with a book as they are having a multi-sensory, multimedia learning experience. One of the many principles of Audible is that we will approach the next generation with new ways of getting literature in peoples’ heads.”

The 2005 launch of Audible Air, a service that allows wireless downloads, takes a step in that direction. Audible is now working with the Glenfield Middle School in Montclair to see if struggling readers benefit from listening to text at the same time they are looking at it in print.

Despite his demanding job, Katz found time over the years to coach his kids’ soccer teams. He served on Montclair’s library board for nine years during its renovation and expansion. Larson, too, has moved beyond her original careers (in nursing and TV commercial production). Now she orchestrates volunteer programs in Montclair public schools and has joined a mentoring program aimed at improving minority achievement.

Katz serves on the board of Uncommon Schools, a non-profit  management organization for charter schools run by another journalist-turned-entrepreneur, Norman Atkins, co-founder of North Star Academy in Newark. Atkins considers Katz not only a friend but a “thought partner.”

“Don is competitive in the best sense,” Atkins says. “He is determined to do what he does well, and he plays the intellectual angles, figures out the right way to approach the problem, and then goes for it. And he’s ferocious about getting things done.”

Just as Katz appreciates the long pass in hockey, he takes the long view in business. “Text always was a technology,” he says. “It became an automated technology at some point and took off as the medium of discourse for years. Arguably it reached its apogee in the late nineteenth century. It’s been a bit of a war ever since to keep both the business and the practice of silent reading front and center in the culture.

“Having said that, more than $125 billion worth of words are purchased every year: books, magazines, newspapers, educational and business materials. It’s clearly at the core of being an educated and fruitful member of society. But there are changes afoot—new technologies and new ways to transmit well-composed words. That’s what Audible is about.



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