With Amazon recently reporting that it has started selling more e-books than printed books, Wowio’s time may be at hand.
And the advent of the iPad – which Wowio’s Chief Executive Brian Altounian believes will provide readers an improved platform for buying books through his company – will likely offer even greater opportunities.
The iPad will help Wowio package multimedia projects. For example, a Wowio version of “War of the Worlds” by H.G. Wells includes audio from Orson Welles’ dramatic adaptation of the novel that was broadcast over the radio in 1938.
“I’m happy to see the iPad come out because its appearance fits well with the way we’ve envisioned digital books,” Altounian said. “It shows enhanced content and has Internet connectivity so that it’s a live reading experience instead of a walled experience.”
Wowio sells e-books through its West L.A.-based Web site, Wowio.com. The company offers readers more than 5,000 titles, including classic literature and cookbooks. It also has pioneered a niche distributing independent publishers of comic books and graphic novels.
Another significant aspect of Wowio’s business model: advertising. The company offers readers two choices. They can pay for the books – with prices going up to $40 for textbooks. Or they can get them free if they don’t mind seeing ads alongside their Dickens. Wowio charges advertisers $1.50 to $3 per book downloaded, depending on the content.
While Altounian is excited about the iPad, Wowio formats its products in PDFs that can be viewed on any e-reader device, including Amazon’s Kindle, Barnes & Noble’s Nook or Sony’s Reader.
Starting out
Wowio was founded in 2005 by a group of Houston college professors who wanted to offer students digital textbooks at lower prices than print.
Platinum Studios, a West L.A. entertainment company that turns comic books into movies, TV shows and merchandise, acquired Wowio in July 2008 for $3 million in an all-stock transaction.
But struggling under the recession, Platinum didn’t have the resources to build Wowio into an e-publishing force. Altounian, a serial entrepreneur who was president and chief operating officer of Platinum at the time, bought it for himself for $3 million in 2009.
Altounian, who runs Wowio with four other executives, said he acquired the company because he believes that integrated advertising will be the best business model for book publishing now that e-readers are becoming more popular.
“I truly believe the ad model is the wave of the future for published material,” Altounian said. “For example, there would be ads for Home Depot in a do-it-yourself book.”
Ross Rubin, executive director of industry analysis for Port Washington, N.Y.-based market research firm NPD Group Inc., agrees that the ad model has a future in book publishing.
“It will certainly be a part of the market,” Rubin said.
In a survey of more than 2,000 adults, 37 percent said they were interested in purchasing an e-reader, according to NPD Group.
Wowio isn’t alone in the e-book space. Ebooks Corp., which was launched in 2000, sells more than 100,000 titles; eBookMall offers more than 210,000 titles. A publishing veteran, former HarperCollins Chief Executive Jane Friedman, started Open Road Integrated Media in 2009 year. The company is set to launch this year with as many as 1,000 titles.
Wowio is alone for the moment in advertising sales. But Amazon applied for patents in July 2009 to insert ads into e-books, including old and out-of-print publications.
The advertising-supported model was pioneered by Wowio’s founders. The company then expanded beyond textbooks to offer e-book versions of classic English and American literature, including “Emma” and “Pride and Prejudice” by Jane Austen.
But Wowio’s founders had difficulty attracting corporate advertising. As a result, they ran into financial troubles and thought that they’d be a good acquisition for Platinum. That plan didn’t work out when the downturn forced Platinum to focus on its core business of entertainment.
“Platinum narrowed its focus to TV and film, and put Wowio on ice,” Altounian said. “And because I had the original plan for Platinum to acquire Wowio, and thought that digital distribution was the future for books and published material, I worked out an opportunity for Platinum to sell Wowio to me and my holding company.”
Altounian then focused on turning around the company. He paid off about $1 million in debt and began putting together a team of experts in the technology, publishing and advertising fields.
Wowio’s strength is already evidenced by its reach.
“I got an e-mail from a reader in Bangladesh thanking us for making American literature available in Bangladesh,” Altounian said. “And I don’t think they are thinking, ‘Should I buy a Kindle or an iPad?’ They are thinking, ‘I want to consume material.’”
Steve Latham, chief executive of Houston-based strategic marketing agency Spur Interactive, has been working with Wowio to get larger corporations and companies to advertise in Wowio e-books or on its Web site.
Latham said advertisers are interested in Wowio’s model because they know what kind of person is going to be reading a particular book.
“There is definitely an interest in their e-book as incentives, gifts or other promotional opportunities,” Latham said. “It allows sponsors or advertisers to promote something of interest to an audience or reader.”
Wowio still works with Platinum, which publishes comics and graphic novels, and has built a niche in those areas. Wowio’s library includes works by more than 200 comic book publishers, including 74 titles published by Platinum. And if the experiment with “War of the Worlds” proves successful, the company will continue developing multimedia titles.
“The future of distribution literature is all about a deeper, richer, enhanced experience for the readers,” Altounian said. “The Wowio team is encouraging its publishers to take advantage of what the Internet has to offer.”
Wowio LLC
HEADQUARTERS: West Los Angeles
FOUNDED: 2005
CORE BUSINESS: Marketing and distributing digital books
EMPLOYEES: 13 (up from 5 in 2009)
GOAL: Going public or getting bought by a larger player in the industry
THE NUMBERS: Goal of $2 million to $4 million in revenue for 2010
