Book Club Gains Huge Prospect Pool
The purchase adds 600,000 club members, which coupled with the December acquisition of three companies specializing in vintage radio programming -- Premier Electronic Laboratories, Radio Spirits Inc. and Adventures in Cassettes -- increases Audio Book Club's membership database to 1.3 million.
ABC, Boca Raton, FL, also has gained access to Columbia House's membership database of music, video and DVD buyers, which totals 20 million names. ABC said it expects the purchase will more than double its annual revenues. Financial terms of the cash and stock deal were not disclosed.
"The ability to mail to that many consumers of an entertainment product in a club format is very valuable to us," said John Levy, ABC's chief financial officer.
The company also said it has received a financing package to support those acquisitions and provide capital for its Internet growth plans. ABC has made 18 Internet-related deals, most being partnerships, and has signed up more than 400 affiliates in the last year. Chairman/CEO Norton Herrick has stated an intention to leverage the "limitless potential of the Web and e-commerce."
Levy said the club is recruiting 5,500 new members a month on its Web sites -- www.audiobookclub.com and www.booksaloud.com -- which represents more than one-third of its total customer acquisition effort. ABC also taps the Internet for customer retention by sending e-mail alerts to members when new books from favorite authors become available.
But Levy said the club isn't turning its back on direct mail. It plans to drop a number of targeted mailings of more than a million pieces this year to a universe derived from the Columbia House database as well as the rental of mailing lists. ABC also will insert offers into Columbia House member mailings.
ABC's own membership list, which is managed by American List Counsel, Princeton, NJ, has grown from 22,453 names in 1995 to 185,694 today. Account executive Missy Root said she expects the Columbia House acquisition to, at some point, increase the size of the list. When companies merge, Root said, members or subscribers of the acquired company are given a negative option to be taken off a list. Depending on the nature of the two companies, integrating may not result in a homogenous combined list, but she said the Columbia House offers and products are so similar to ABC's that combining the lists probably won't affect response.
The combination of lists would save mailers from having to rent two separate lists and having to remove duplicate names. For mailers contemplating the use of combined lists, Root recommends testing 5,000 names before placing a regular size order.