When podcasting started to take off, especially after all of the podcasting hype Apple generated when podcasting support was added to iTunes, many people predicted that Audible.com would start to feel the heat from free podcasts.
According to
this article, Audible shares have gone up more than 3% today following the release of a report on audio book listening habits.
It seems, at least for now, audiobooks have nothing to fear from podcasts. I think Bob hit the nail on the head with the reasons why. The saying "you get what you pay for" is holding true for now in a majority of podcasts. The ones that offer interesting, quality content, differentiation, and "added value" for listeners will be the ones that stand out from the current crowd.