By BOB HOWARD Contributing Reporter Audio Digest can make a strong case that it is literally just what the doctor ordered. The Glendale company has been setting growth records by aggressively marketing its audiotapes that condense presentations from the hundreds of medical conventions and conferences held throughout the United States each year. Doctors who don’t have time to attend medical conventions order the Audio Digest tapes to hear the latest lectures about advances in their respective fields. But there is more to the business than recording lectures and selling tapes to doctors, according to Allen Stamy, president and chief operating officer and part of a management team that took over two years ago. To get the tapes, doctors buy subscriptions for about $200 a year, in return for which they receive twice-a-month mailings. Besides doctors, subscribers include universities, hospitals and medical libraries. Each mailing includes a 10-page summary of what’s on the tape, along with a self-administered test to be taken before and after listening to the tape. Subscribers can then mail in the completed test and receive credit for continuing medical education. Audio Digest, which is a non-profit subsidiary of the California Medical Association, sees itself as serving an important role in the continuing medical education that is mandatory for doctors throughout the United States. “The general public probably doesn’t realize how important continuing education is for doctors. It is required by law,” said Bob Calverley, a spokesman for the Los Angeles County Medical Association. Calverly said many of the association’s doctors subscribe to the Audio Digest service to meet state licensing requirements and because it’s virtually impossible to attend all the important seminars to keep up on the latest medical advances. Sponsors of medical meetings often offer printed versions of their proceedings, but the tapes enable doctors to listen to lectures when they don’t have time to set aside for reading, Calverly pointed out. Lon Osmond, vice president and executive editor at Audio Digest, said the company’s tapes represent a more efficient way to listen to taped lectures because Audio Digest condenses the talks. Audio Digest records about 6,000 lectures a year at some 300 conferences, but only uses about 700 of what it considers the best lectures, and then culling those down to a few dozen tapes per specialty, Osmond said. At the Audio Digest studios, nine medical editors trim the speeches to remove the pauses, throat-clearing and other superfluous information so that only “the best of the best” remains, Osmond said. “We also edit the tapes to make sure the information in the presentations is in the most useful sequence,” Osmond added. “If a speaker remembers something at the end of a lecture that he or she meant to include at the beginning, we can edit the tape so that it’s where the speaker intended it to be.” Osmond said many doctors subscribe to the tape service even if they have already met educational requirements because they need to keep up with changing practices to remain successful and because of “tremendous peer pressure” to be up on the latest developments. Audio Digest has been around since 1953, when it was founded by the late state Sen. Jerry Pettis. By 1995, it had hit the wall in terms of growth, according to Stamy, who said the company had topped out at about 39,000 subscribers and that number was declining. Since then, the number of subscribers has grown to 50,000 as Audio Digest has targeted new groups of medical professionals and expanded its marketing to existing groups. The company would not disclose revenue figures, but based on its $200 yearly subscription fee, its revenue would have grown from $7.8 million in 1995 to $10 million in 1997. Stamy, a one-time IBM executive who became Audio Digest president in 1996, credits much of the growth to direct mail marketing programs developed by George Groveman, a 25-year veteran of the pharmaceutical industry who became vice president of marketing and development in January 1995. Besides Stamy and Groveman, the management team includes Osmond, who has been with the company since 1985 and was promoted to his current post in 1995; and Dr. Richard Corlin, a Santa Monica gastroenterologist who holds the titles of chairman and chief executive. (Corlin spends about one day a week at the company, while Stamy oversees the company’s day-to-day operations.) “We’ve always had a good product,” Stamy said, “but we really didn’t have the sophisticated marketing effort we have today. Until George’s arrival, there wasn’t really a scientific marketing approach.” Groveman said the company focuses on a target group of “at most, 600,000 individuals.” That includes 400,000 doctors in 13 medical specialties that represent about 80 percent of the doctors in the United States. The other 20 percent of U.S. doctors are involved in more-obscure specialties that do not lend themselves to mass-market audiotaped lectures. It also includes two new groups the new management team has targeted nurse practitioners and physician assistants as well as 4,600 hospitals, universities and medical libraries. Since the target population of doctors doesn’t grow much from year to year, the company’s best chance for growth was to market aggressively to get new subscribers from that pool and to target the new groups, Groveman said. “It’s still very valuable and worthwhile to attend meetings in person, but people can’t always take the time to go,” Osmond said. “Our tapes actually enable the sponsors of the meetings to reach a much broader audience than they would without the tapes.” While Audio Digest tapes are more economical, affordable and convenient than attending a meeting in person, Osmond said, “we wouldn’t have content for our tapes without the live presentations, so we always promote and give credit to the conferences that provide the lectures.” John Gray, associate director of the Office of Continuing Medical Education at the University of Michigan, said officials there view Audio Digest as a supplement to the 70 or so medical symposiums that the university conducts each year. “We’ve always considered Audio Digest to be an extension of our symposia and similar to the major publishers of medical textbooks and reference books,” said Gray. Even doctors who attend the symposiums in person often buy the tapes to keep as references, he said. Gray added that continuing education is a full-time endeavor at places like the university, which has a permanent staff of 20 in its continuing education office. Stamy said Audio Digest recently bought a minority interest in Palm Desert-based Landes Slezak Group, which records medical meetings for conference sponsors and then makes tapes available immediately afterward. Audio Digest is expanding in other ways too, Stamy said. In early August the company signed an agreement with Montvale, N.J.-based Medical Economics Co., publisher of the Physicians Desk Reference and Medical Economics Magazine, to develop and produce an audio series on the economics of medical practice and of health care. Audio Digest also has had a partnership for some time with the Massachusetts Medical Society, which publishes the New England Journal of Medicine, to produce an audio version of another of the society’s publications, a medical journal digest called Journal Watch. Audio Digest operates as a non-profit organization that disburses its profits as educational grants and scholarships through the Audio Digest Foundation. Stamy said, however, that it faces the same challenges as a for-profit business. “There is lots of competition, in general, in continuing medical education, so we have to operate in a business-like manner if we want to continue to succeed and grow,” he said. Year founded: 1953 Headquarters: Glendale Core business: Continuing education audiotapes and related materials for physicians and other health care professionals. Employees in 1995: 65 Employees in 1997: 75 Revenue in 1995: $7.8 million (estimate) Revenue in 1997: $10 million (estimate) Top executive: Allen J. Stamy, president and chief operating officer Goal: To continue reaching new and larger audiences of medical professionals in need of continuing education. Driving force: The need for medical professionals to remain abreast of the latest advances in health care and to obtain continuing medical education credits to maintain their licenses.
