Business Opportunities Weblog

April 24, 2007 by Rich Whittle | 3 Comments

BusinessWeek:

Back in 2002, Sean Neville had a hunch DVD mail-order rental biz Netflix was onto something big.

While taking a course to become a licensed securities broker in Canada, Neville had enjoyed listening to the audiobook versions of textbooks instead of reading them. Afterward, he would occasionally rent audiobooks from a store in downtown Toronto, but found it a hassle to get there, and expensive.

So Neville approached fellow Cornell B-school graduate and serial entrepreneur Sanjay Singhal with the idea of creating a Netflix for audiobooks. At first, Singhal was skeptical, since he had never heard of a successful rent-by-mail company for anything. Then he learned about Netflix’s phenomenal subscriber sign-up rate. In 2003, the pair launched Simply Audiobooks out of Neville’s basement.

In borrowing Netflix’s business model, Simply Audiobooks is not alone, though one of the most successful of the imitators that specialize in renting everything from video games to handbags. “There’s an increased interest in anything that has to do with temporary ownership, as ownership of goods is less of a status symbol these days, and renting goods is seen as smart. Consumers also like to try out as many new ‘experiences/goods’ as possible, which means the Netflix model appeals,” says Reinier Evers, founder of trendwatching.com.

Just four years after launch, Simply Audiobooks’ sales have grown from $30,000 in 2003 to just over $6 million in 2006. It expects sales of around $6.5 million in 2007.

Photo by Simply Audiobooks.

In Niche, Startup, Success | 3 Comments