Acquisition looks to put Dove Audio near top of books-on-tape industry.

Dove Audio Inc. entered into a tentative agreement last week with Simon & Schuster to acquire the publishing giant's Prentice Hall Business Audio division. If consummated, the deal will strengthen Dove's position as the strongest independent company in the burgeoning books on tape industry, according to Michael Viner, Dove's chief executive officer.

Viner said he expects the deal to close by year-end. Prentice Hall's 18 business titles are valued at about $1 million and will enhance Beverly Hills-based Dove's position in the business audio business, Viner said.

"This is a good fit with what we are doing," he said. "We are acquiring upscale, direct-to-business titles that will help us expand in the business realm. This will be our biggest acquisition and it gives us another 26,000 names for our mailing list."

Dove already has a mailing list of 150,000, which is among the largest in the industry.

After six years in the $1.2 billion books on tape industry, Dove has rocketed into third place in sales behind Simon & Schuster and Bantam Books, according to Viner. Dove will finish 1993 with $23 million in sales (at retail), a 48 percent increase, he said. Within three years, Viner plans to double the business and envisions taking the company public.

In the past Viner has listened to merger offers and came close to making a deal with HarperCollins Publishers Inc. He said he had signed a letter of intent with HarperCollins to sell Dove with a stipulation that Viner would become that publisher's president. That deal fell apart before all the details could be hammered out.

Building Dove's library is a primary goal of Viner and his business partner and wife, Deborah Raffin. Their library now has about 800 titles and Viner values it at over $20 million.

It cost $4 million to acquire the audio rights to those books. Dove has never paid more than $50,000 for a book, yet Random House has paid $1 million to Tom Clancy for his books, Viner said.

Dove has been able to sire one of this year's best-selling audio titles, "The Bridges of Madison County." The romantic novel has sold about 150,000 audio units retailing for $16.95, Viner said.

Any tape that can sell 10,000 copies is considered a "hit." Stephen Hawking's "A Brief History of Time" also had sales of around 150,000 copies for Dove over the last three years.

Dove's formula to compete against the New York publishing giants combines literary and Hollywood stars.

Viner was able to sign best-selling authors such as Sidney Sheldon, Amy Tan, Jack Higgins and Irving Wallace. Raffin, an actress who has done 25 movies and television series, has used her Hollywood connections to get some of the biggest names in the industry to read the books on the tapes.

Paul Newman and Joanne Woodward combined to do "Mr. & Mrs. Bridge." English actor Paul Scofield has done a series of Charles Dickens' books.

Raffin works in the studio with all the readers, directing and producing the tapes. Glenda Jackson, Lily Tomlin, Sigourney Weaver and Michael have also read.

Dove has been in the business books on tape category with best sellers such as "The Predators' Ball" (read by radio talk show host Michael Jackson) and "Final Cut" (read by actor Roddy McDowall). The Prentice Hall deal will bring Dove a series of titles that help listeners develop business communication skills.

Viner is convinced the audio business is just starting to boom and is nowhere near reaching its plateau. "The industry is growing 15 percent a year and continues to get more space (at retail) everywhere. We were lucky to get in on the ground floor."

Most books on tape sales have been in book stores but the major entertainment chains that sell music and movies are also entering the business.

Wherehouse Entertainment Chief Executive Scott Young said, "We have found books on tape have done better as rentals. After we make our money back on the rentals, we then sell them and they move when discounted.

"This is a fragmented business and for us a business that is difficult to get our arms around," he said. "There are many variables because some of the books are abridged. Thus far, the business doesn't have a critical mass, but I think it could be good for the future."

Viner is convinced the big growth is still ahead because Americans are spending more time in their cars and in their homes. Books on tape are one more way to make use of that time.