To reach various sales channels, indie publishers can choose from among three major distribution platforms. Photo ©2018 Steve Leimberg UnSeenImages.ComAt a time when the book industry faces intense economic pressure, reports of an exploding audiobook market leave independent authors and publishers wanting a piece of the action. New technology makes it easier than ever for them to produce and distribute audiobooks. Still, making a profit is more challenging.
The cost of creating an audiobook runs about $400 to $500 per “finished hour,” which includes both narration and editing. Multiply that by the length of time it will take a performer to read your book: about 9,300 words per hour at a steady clip. At that rate, an 80,000-word book would run about 8.5 hours and cost at least $3,400 to produce. Many voice actors eschew deals that require them to work in exchange for a share of future royalties. (Who can blame them?) More typically, publishers front the expense.
“There’s no guarantee that you’re going to get your money back,” says Mark Coker, founder and CEO of Smashwords, an e-book distributor for self-publishers. Of course sales will vary by author, and from one project to the next. But, generally speaking, if a book is selling poorly as an e-book, “it’s not going to make itself better as an audiobook.”
As for sales channels, Amazon dominates the market through Audible.com, its audiobook arm. In 2012 they opened the platform broadly to self-publishers and cut royalties by about half. That brought more – and cheaper – content to the site, making it even harder for publishers to profit, Coker says.
Change may be in the wind, though. Last month Smashwords announced a partnership with Findaway Voices, a new distribution platform. And early last year Audible and Apple ended the agreement that made Audible the sole supplier of audiobooks to iTunes. (The arrangement had come under scrutiny from German antitrust regulators.)
Theoretically, this could lead to a fortunate series of events for indie publishers: increased competition that would create new distribution paths, induce Audible to improve per-book royalties and reduce the financial risks for publishers.
To reach a growing number of sales channels, they can now choose from among three major distribution platforms. (All offer optional production services.) At the top of the food chain is ACX, owned by Audible. It controls distribution by indies to Audible; lists those audiobooks alongside other formats on Amazon.com; and, until alternative arrangements are announced, remains indies’ only conduit to iTunes. Publishers can deal directly with ACX or go through an aggregator, like Findaway Voices or Author’s Republic, both of which distribute to more than a dozen additional outlets.
Here’s how to navigate the options.
Maximize sales channels. Beware of exclusive arrangements. The one from ACX pays royalties of 40%, in contrast with 25% under a non-exclusive contract. But you are not permitted to distribute your Audiobook outside of Audible, Amazon and iTunes. And that rules out libraries, which are an important channel for small publishers.
“There’s so much discovery and experimentation that happens in the library market that doesn’t necessarily happen in the retail market,” says Michele Cobb, executive director of the Audio Publishers Association. “When someone’s buying something outright, they’re not as willing to try new authors and new things.”
The most lucrative library sales, which fetch up to three times the manufacturer’s suggested retail price, allow only one patron at a time to borrow the book. OverDrive is the primary distributor of audiobooks under this business model.
In contrast, with a “pay per circulation” arrangement, an audiobook is available to an unlimited number of patrons simultaneously. Royalties are lower, but a “sale” occurs each time a library user checks out the audiobook. Hoopla has been the leader with this model (figure royalties of about 60 cents per unit), but OverDrive recently added it to their offerings.
Regardless of the per-unit price, Hoopla helps small publishers get the most exposure possible for their titles, says Cobb, who provides marketing advice to publishers through her company, Forte Business Consulting.
In an episode of his “Smart Author Podcast,” Smashwords’ Mark Coker offers tips on how to market e-books to libraries. Many would work equally well with audiobooks.
Meantime, publishers can help make readers aware that they are able to borrow audiobooks from libraries – something that even audiobook enthusiasts may not realize. There’s also a way from within the OverDrive app for library patrons to recommend a book. Through posts on social media and on a book’s website, you can outline them for readers and potential listeners.
Open the OverDrive app on your smartphone and follow these easy steps:
1) Go to “Bookshelf”
2) Scroll down to “Add a title” and click. It will take you online to your library’s website.
3) Search for [insert book title here]
4) Scroll down until you see the book cover and click “recommended”
“You never know where your book is going to sell until you see it on every platform,” says Darren Speers, general manager at Author’s Republic. Distributing through an aggregator makes it easy to test the waters.
There’s considerable overlap between the sales channels of Author’s Republic and Findaway Voices, though each also offers unique outlets (see chart, below). So far only Author’s Republic distributes to Storytel – a growing international network. For publishers that own world rights, this could be a valuable market, Speers notes.
If you want to work with both aggregators, speak to company representatives first to avoid mix-ups and duplicative efforts. Though it’s also possible to switch aggregators (or to a direct deal with ACX) down the line, that’s likely to interrupt your distribution for about two weeks, company representatives say.
Be realistic about royalties. As in other publishing contracts, they are generally expressed as a percent. The question is: a percent of what?
How you price your book plays a role, but not with Audible. Though the company offers guidelines on its website, based on the length of the book, it warns that Audible “retains the sole discretion to set the price of the Audiobooks it sells.”
For example, last week I searched for my book, Four Seasons in a Day: Travel, Transitions and Letting Go of the Place We Call Home, three different ways within the Amazon system and came up with five different prices for the audiobook. On the book’s Amazon page, the price was $14.95 for Audible “members” (those who pay a monthly fee for one book credit per month); $17.46 for non-members; and $0 as a sign-up incentive for new Audible members. On Audible.com, the suggested retail price of $19.95 displayed, until I signed on as an Audible member, and then the cost dropped to $13.96 or one credit.
Though the majority of books are purchased using membership credits, the most favorable royalties are for sales to readers who are not Audible members. For a non-exclusive which, as noted above, is the only ACX arrangement I would consider, the royalty is 25% of Audible’s “a la carte” price. (Again, this may be different from your suggested retail price.) The same rubric applies to sales to iTunes.
Under a complex formula, per-book royalties for membership sales are about half as much, according to the company website. Since the formula for membership sales incorporates many variables, and Audible does not reveal the sums attached to any of them, “you don’t know what the royalty is going to be until after the fact,” says Kelly Lytle, editor of Findaway Voices. For all other sales partners, publishers can figure out in advance what they will earn; a schedule attached to the Findaway Voices contract provides the information they need to do that.
“I’ll take that as feedback from the community and something we can look into,” says Michael Stover, senior director at ACX. “We’re not trying to be opaque.” And here’s an example: With a non-exclusive arrangement, the per-unit royalty on a $30 book bought with membership credits would be approximately $4, he says.
I used the Findaway Voices royalty schedule to do an apples-to-apples comparison (again, with the understanding that the sample non-exclusive royalty Stover provided upon my request is approximate): On Audiobooks.com the royalty for books bought through a credit-based subscription is 40%, or for this book $12. A publisher distributing through Findaway Voices gets 80% of that, or $9.60. That’s $5.60 more in royalties than the same book would fetch from an Audible membership sale (assuming the publisher is dealing directly with ACX, rather than through an aggregator).
To be sure, there are benefits to having a book available in the world’s largest bookstore. As part of the Amazon family, Audible becomes a destination for buyers who don’t realize that they can often purchase the same audiobook on Nook (part of Barnes & Noble) and Libro.fm (which partners with independent bookstores), for instance. But as this example illustrates, publishers, in effect, pay a high premium for the virtual shelf space.
AUDIOBOOK DISTRIBUTION PLATFORMS AT A GLANCE
| ACX (Non-Exclusive) | Author's Republic | Findaway Voices | |
|---|---|---|---|
| Sales channels | Audible, Amazon, iTunes | ACX channels plus more than 12 others, including library distributors OverDrive and Hoopla; and Storytel (reaching international markets) | ACX channels plus more than 12 others, including Scribd, Nook, Playster |
| Royalty percentage to rights holder | Sales to non-members: 25% of “a la carte” price Sales to members: Royalty is about half as much as for sales to non-members | 70% of royalties earned through sales channels (a percent of a percent) | 80% of royalties earned through sales channels (a percent of a percent) |
| What royalty statement shows | Breakdown by various sales channels within Audible; $50 “bounty” if book is the first download by new Audible member | Total units and total royalties (no breakdown by sales channel) | For each sales partner, shows: business model, royalty rate %, digital list price, quantity sold and royalty earned |
| Caveat | Contract subject to change without notice and lasts for 7 years | If you list fewer than 10 books, payment only via PayPal, which subtracts a 5.25% fee from your receipts | New to the market |
Plan strategically. A detailed royalty statement can help you direct listeners to platforms that pay higher royalties or generate more sales.
For each sales partner, the one from Findaway Voices shows: business model, royalty rate (expressed as a percent), digital list price, quantity sold and royalty earned, Lytle says.
ACX breaks down sales by various channels within Audible (members versus non-members, for example). The royalty statement also shows if a rights holder has earned the $50 “bounty” that’s awarded if a book is the first download by a new Audible member, Stover says. (This bounty applies to both exclusive and non-exclusive ACX users.)
In contrast, the dashboard of Author’s Republic, which I have access to as a publisher, shows only total sales by dates selected and the total royalties earned for those dates. Unlike with Findaway Voices, its contract does not spell out the royalties that each sales channel pays.
At my request, Speers sent me an Excel spreadsheet with a breakdown by sales channel showing total units sold and royalties earned within each channel since Four Seasons in a Day went live as an audiobook in July. For sales to ACX, it did not include the detailed information that would have been available to me if I had dealt with ACX directly. Speers says that Author’s Republic plans to add more detail to its dashboard later this year.
Maintain your independence. Financially, a hybrid approach to distribution makes the most sense. For books distributed to iTunes, Amazon and Audible, you can enter into a non-exclusive deal directly with ACX, and avoid splitting these royalties with an aggregator. You will also have access to the detailed royalty statement and a dashboard from which you can track your sales, practically in real time.
One potential glitch is that ACX contracts require a seven-year commitment, which Stover says is not negotiable. And, thinking ahead, that could someday interfere with your freedom to distribute to iTunes without going through ACX.
Currently, it’s not clear what other routes will be available – whether this would be done through an aggregator or through direct uploads to iTunes. When I recently inquired via iTunes Provider Support about direct uploads (as it’s now possible to do with iBooks – Apple’s e-books app), a member of their team replied: “Audiobook distribution isn’t included in the iBooks contract, and audiobook contracts are currently not available. We obtain audiobooks from our partner Audible.”
The upshot: In effect, ACX remains the sole source of indie audiobooks for iTunes. Apple’s press office did not respond to a request for comment.
For the moment, dealing with an aggregator doesn’t relieve publishers from a seven-year deal, since it also applies to the aggregators’ agreements with ACX. But there are efforts afoot to change that. Author’s Republic is working on a direct-to-Audible option, which would not include the seven-year commitment, Speers says.
Expect downward pressure on prices. This trend, fueled by the availability of so much free content online, has spread throughout the publishing industry. With everything from downloadable movies to podcasts competing for people’s (increasingly short) attention, we test the limits of how much they can consume. And as it is, only 24% of the American public listens to audiobooks in a given year, according to a recent Audio Publishers Association survey.
With many new retailers entering the audiobook market, including Walmart (in partnership with Kobo) and Google, readers may want a monthly fee to offer more than Audible-style credits, Cobb says. As the market evolves, the only way to satisfy listeners’ appetites might be with subscriptions for all-you-can-eat.
Deborah L. Jacobs, a lawyer and journalist, is the author most recently of Four Seasons in a Day: Travel, Transitions and Letting Go of the Place We Call Home, about her adventures — and misadventures — living in France. The audiobook version, narrated by Tavia Gilbert, is available from your favorite retailer or library. Follow Deborah on Twitter at @djworking and join her on Facebook here. You can subscribe to future blog posts by using the sign-up box on her website’s homepage.
RELATED STORIES
Why This Professor Is Writing Letters for People Feeling Blue
Pruning Books the Pandemic Makes Passé
Great write-up on the growing demand for audio. I appreciate how realistic you keep it and have split all the information into bite-sized chunks. Kudos!
Thanks for your kind words and all the best in your indie publishing ventures.
Thank you for the informative review. I didn’t read my first book from cover to cover until I 58 years old (64 now). I didn’t discover I was dyslexic until I was 50! That day a 100 pound weight was lifted off my back.I no longer had to think I was the dumbest person in the room because of horrendous reading and writing skills. I have dedicated myself through Billy’s Quest to provide FREE or inexpensive tools to help the dyslexic child as well our children and adults that can’t read. I have now READ well over a 100 books now knowing that reading can be done with the eyes ,ears or a combination of both. There are books that I know should be available in audible book form. When I ask the author it always seems to be the same answer “TOO EXPENSIVE”!!! some of the books are very detailed while others are just very entertaining read that could be brought to life. Any suggestions that could help? Please visit Billy’s Quest (My Toolbox to Success )”WHERE THE CHILD CAN READ EVERY WORD on our website!
All I can say is-please could those competitors to ACX get their companies and distribution models up and running as fast as possible. I’ll sign up!
They are already up and running. The links in this article will take you to their websites.
I used Findaway Voices to produce my audiobook ‘Papa, Where Are You?’ This organization was extremely helpful and always promptly answered my questions no matter how silly. I would highly recommend them.
amazon.com/author/pjeasterbrook
Very informative and honest look at an evolving industry. As an author of many books, I have experienced the highs and lows of conventional publishing and know the reality of what the majority of authors can expect in terms of returns on effort. Audio offers a wonderful opportunity into an expanding market but it is pricey. Would you have the name of a responsible aggregator?
Thanks for your kind words. As you note, this is an evolving field. The major aggregators are mentioned in this article.
That was a very useful article. Thanks! 🙂
Hello, thank you for a very useful article. I’m an audio book narrator and to date have published 3 books on audible through the ACX exchange. The strangle hold that Amazon (owner of audible) has on the market is boggling. Amazon was at the forefront for authors wishing to self-publish and was an indie leader providing an amazing platform to new authors and talent but they appear to have steered a completely different course for audio books. Similar to the CD industry for music, the buying public quite rightly is questioning the cost of $20 (average) per audio book for a simple download (there are no publishing costs or hardware production to speak of – this is pure profit other than some admin costs) and of that amount the 40% “shared” with the author and narrator i.e. the ones who have put in the graft is subject to all sorts of deals they offer (too complicated for me to put into words here, but I’m sure you’ve covered them – not least the 7 year contract of no control of price etc). I have done a quick search for some of the titles I have produced and have found many “hooky” sites where I can download for free and quite frankly whilst it is very disappointing I cannot help but sympathise why people would do so when to buy legally is so prohibitive. As I say, similar to the problem the music industry faced with the expensive cost of cds compared to the price of production of said CD’s and the small royalty actually paid to the artist. To me it is obvious, provide the audio books at a comparative price to the ebook? I’m sure many people who are deterred at the exorbitant cost would take a “punt” if it was the same price as the ebook, for myself I have purchased many a book for $2 and sometimes been pleasantly surprised and at other times thought – oh dear, never mind! I’m now at a stage where I have a good report with authors who like my work and I will be actively liaising with them to sell on another platform where we control the price and receive a greater reward. It’s the old adage, it’s better to receive 100% (or 80/90%) of something ($2) than 20% of very little! I do hope this was of interest, many thanks
Thank you for the information.
I wonder what platform will allow for the largest distribution. Thank you
Hi Deborah. Very useful. I have a question. Is it correct that with Findaway Voices authors cannot do their own narration and must employ a narrator provided by the company?
No, that is not correct.
Hi Gary,
An an author you can indeed voice your own audiobook with Findaway. They will even send you the specs via email and you simply have to upload the finished audio via your author account.
They’re very friendly and quick to respond.
Hello Deborah,
My guess is that you’ve done even more research since publishing this article. Do you know which platforms offer author-narrated options and what the costs/processes are? I represent multiple authors, some of whom would prefer to narrate. THANKS!
Hi Jody,
I spent a couple of weeks researching this article before publishing it in April, and the information in it is the most recent I have. All the platforms mentioned allow authors to narrate their own books, though that may not be obvious when you first sign on to their sites.
Very nice article. You provided the answers to many questions I was beginning to research online. Thanks for the detail and critical review.
Thank you so much for such an informative article. If I understand you I could sign up with ACX as non-exclusive so I get itunes and then go with another company for a greater distribution. Is this correct?
Thank you, Alder
Yes, that is correct.
Hi Deborah,
This article was so informative, omg, it’s actually the best I’ve seen thus far, so many are throwing out misinformation about ACX and audiobooks it’s not funny.
Deborah, I am a self publisher with many titles on kindle and acx, been looking into other platforms after reading this for my audio books
I got into a deep discussion with one of my fellow publishers in kdp and he said your article is “weak” and then we talked about royalty share on acx, I like royalty share, he said “never do royalty share”
what’s your professional opinion on this matter? Is it okay if I do royalty share on acx, seeing as I make most of my money on kdp and createspace anyway.
Thank you Deborah, have a nice weekend.
Many talented narrators will not do royalty shares. Have you have been satisfied with these arrangements?
Hi Deborah! I’m an audiobook producer by trade, but my company has been working on new cost effective avenues that allow publishers and authors cut out the middle man without sacrificing the audience that these exchanges provide them.
Hello ,thanks for sharing all this great info on this post, i just want to know one thing , does amazon accept Paypal as payment method like Ebay ? i dodnot want to use my Visa card as payment method ,thanks again for sahring .waiting your help
Hello Deborah,
I have several audiobooks already published and wondered how the 7 year non- negotiable contract will affect me when it ends. The first few of my projects are on a “royalty share” basis, and I wanted to know if this will need to continue after the 7 year period?
Many thanks,
First step is to read the contract and see what it says about this.
Hi Deborah,
This is extremely informative. May I ask what you have found to be the best way to go? Exclusive or non exclusive? Given that most people choose to get their audiobooks via audible…not sure what to do.
For my own books, I have chosen a non-exclusive arrangement. I hope this article will help you decide what’s best for you.
Hi There – I have one question:- If you are a new indie author of a couple of books and have done the audio versions too, who would you distribute them with? David
Thank you, Deborah! My marketing pro told me I couldn’t get advance codes to give to audiobook reviewers before the release of my audiobook. I thought that was wrong, so I called them. Nope — they don’t give out codes until the audiobook is published. “So that means I can do NO pre-promotion?” That’s correct, she said. “So that means I can’t have a review quote in the audiobook’s description?” No, she said.
“So, if post my AB on ACX as non-exclusive, that means I *can* distribute free samples/ARCs and get review quotes before release?” Yes, but you’d have to sacrifice the benefits, she said.
Your blog lays bare the value of those “benefits” and much more. Thank you for this enlightening article!
I have 2 questions:
Why do say that non-exclusive is the only way to go? 25% of sales everywhere seems much lower than 40% via Audible.
Can I assume that selling via Audible is the same as selling via Amazon?
Giving Audible an exclusive can restrict your access to other markets, and for most publishers that is undesirable. Yes, Audible is the audiobook unit of Amazon.
I’m not an author and I apologize if this is not the correct space to ask. In terms of the author, is it more beneficial to buy a hard copy than to purchase the audiobook? Is it treated like streaming with music, where all sales are not created equal?
I have self published a series of audiobooks and looked to sell on Amazon/Audible… At 25% non-exclusive royalty I nearly fell off my chair. Seriously? I originated the stories, paid for all production costs and literally edited the stories myself and Amazon wants to take 75% for using their platform? I cannot fathom why anyone would take this. I am so surprised that people don’t bork at it.
One still has to pay for any marketing, google/FB advertising etc out of the remaining 25%. Unless you are an absolute best seller, sell exclusively and can negotiate that royalty down it just makes no sense to me. I ended up creating my own 1-page website and selling directly. I get 100% of the profit. (Unless I decide to partner with people/organisations and can negotiate a fair split with them.) Which is much better to me then giving more money to Amazon.
May I ask if anyone here out of interest has made any reasonable profit through Amazon and what sort of quantities of audiobooks you sell?
Thanks so much for the article
I’m with you. I just finished my memoir audiobook and I would like to have someone build a website for me with a delivery system to send to purchasers.
Can you recommend that person? And can I ask what the website cost you?
I built my own website, using the Divi theme for WordPress.
Great post, Deborah. I have two audiobooks out (ACX Exclusive) and I am sorry about that. I didn’t realize the deal would shut me out of libraries. I am writing an article on audiobooks for my local RWA chapter. I plan to link and credit you in the post.
Also, BookBub is adding audiobooks and at the moment they are only getting them from CHIRP through Findaway.
While I appreciate this article, I remain amazed that everyone keeps talking about Amazon paying “royalties.” Amazon pays no indie “royalties.” Amazon is a reseller of books, not a publisher in so far as indies are concerned. Amazon provides no publishing services of any sort to indies.
What Amazon charges are MDF or “stocking fees.” MDF stands for “marketing development funds” is a means by which distributors and resellers extract more money from a producer’s bottom line.
The stocking fees that Amazon slams onto the back of indie authors are huge and not justified by any level of service Amazon provides. What’s worse is that Amazon has price rigged the independent book market and every year inflation crushes indies.
If Amazon’s stocking fees were accurately identified as what they are, it would stop the company from hiding behind the fiction that they pay “generous royalties.” They don’t. Once they’ve extracted all their huge stocking fees, you, the indie, must pay to market your book from what’s left over.
Please correct this article to reflect operating and legal reality.
BTW, I cover all these issues and more in the third edition of “In Search of Stupidity: Over 40 Years of High-Tech Marketing Disasters” in the “Burning Down the House” chapter. Due in October.
There has to be one answer that best suits everyone. What is the fairest royalty plan for both writer and narrator? What is the best distribution format for them as well?
“I’mma wri-der not a laaawyeer.”
Great write-up. One update. Findaway now distributes to Storytel, too.
Hi Deborah,
There’s a lot of confusion about ACX royalties, so here are the facts:
My book, The Goldendoodle Handbook, retails at $24.99 on Audible. I’m on an Audible-exclusive contract and I paid for the narration up front, rather than a royalty share.
I contacted ACX to question royalty payments and this is their reply:
ALC – a full price, non member retail sale – $24.95 x 40% = $9.98
ALOP – a 30% member discount cash sale – $24.95 x 70% = $17.46 x 40% = $6.98
AL – a member credit sale – $24.95 x 52% = $12.97 x 40% = $5.18
Hope that’s helpful,
Linda