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Amazon-owned Audible lowers royalty rates on self-published audiobooks

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Audible (s AMZN), the digital audiobook site owned by Amazon that launched audiobook rights platform ACX in 2011 as a way for authors and publishers to profit from their unsold audiobook rights, is now lowering the royalties it pays on those audiobooks.

ACX enables rights holders — authors or publishers, though the site has become increasingly geared toward self-published authors — post their rights on the platform and let producers and narrators bid on them. Once the book is recorded, the rights holder can sell it through Amazon and Audible exclusively for a higher royalty rate, or sell it wherever they want for a lower royalty.

Until now, these royalties have been pretty generous: Creators who agreed to sell exclusively through Amazon and Audible got a rate of 50 to 90 percent, depending on the number of units sold, while creators who chose the non-exclusive option got a royalty rate between 25 and 70 percent. On Thursday, however, Audible announced in a blog post that it’s lowering and flattening royalty rates:

“Effective for projects started on or after March 12, 2014, titles distributed exclusively to Audible, Amazon, and iTunes will earn a non-escalating 40% royalty paid to the Rights Holder (or, on Royalty Share deals, split equally between the Rights Holder and the Producer). Non-exclusively distributed books will earn a non-escalating 25% royalty through Audible, Amazon, and iTunes.”

Projects started or completed prior to March 12, 2014 will continue to get the higher, escalating royalties.

Why the change? According to an FAQ, “We are lowering the royalties as we continue our mission to accommodate more audiobook productions. Our royalties still remain well above those offered by traditional audiobook publishers.”

Audible is also changing its “Bounty Program.” Previously, that program paid a rights holder $25 when their title was among the first three downloaded by a new Audible subscriber. Now, rights holders will receive $50, but only if their book is the first title downloaded by a new subscriber.

This is not the first time that Audible has made a program less generous to creators: Last June, it ended a program that gave authors $1 for every audiobook sold. At the time, the company said that the program was intended to get authors “to recognize the value of their audiobooks and to raise awareness of their audiobooks alongside their print and ebooks.”

Now, apparently, enough authors are recognizing that value that Audible can’t be as generous as it had been.

Over three years, a larger focus on self-publishing

At its launch in 2011, ACX was geared toward professional authors and publishers; Random House and HarperCollins posted books on the rights exchange, for instance, and Random House CEO Markus Dohle praised Audible in the official release for being a “great [advocate] for the audiobook consumer experience.”

Since then, however, Audible has increasingly geared ACX toward self-published authors and has begun to describe audio rights in terms of being “liberated” from traditional publishers: Its homepage, for instance, features bestselling self-published author Hugh Howey and mentions that Neil Gaiman used ACX to “liberate audio rights.” There’s also paranormal romance author Marta Acosta, who “wrestle[d] back her audio rights” from her publisher when “technology gave a giant kick to the backside of the publishing world and burst onto the scene.” And self-published author Bob Mayer notes, “[W]hen I compare my ACX sales to my royalty statements from a few of my books that are still controlled by a Big 6 publisher, there is no comparison in sales, just as my indie eBook sales outsell my Big 6 eBook sales.”

The change to ACX’s royalty structure is a reminder that Amazon could also reduce its royalties on self-published Kindle books at any time. That would be a much more visible move than the changes to ACX, which the company surely realizes. But the changes at ACX shows that good introductory deals don’t always last.

6 Responses to “Amazon-owned Audible lowers royalty rates on self-published audiobooks”

  1. Did anyone really think that those royalty rates were sustainable? The big news to me isn’t that Amazon reduced the royalty, but that it existed at that rate to begin with. I wished I had the foresight to get into it while it was available but even with the reduced rates it is MUCH more than I get from my traditional audio contracts.

  2. “introductory deals don’t last” is an understatement for loss leaders intentionnally designed by companies like Amazon and Apple to lock in suppliers and pressure them later

  3. In the mid-nineties a friend of mine was working at Boeing in parts acquisition and getting increasingly unhappy with her work. She had to call aerospace part makers and say in essence: “We have been paying you $100 for this part, we will now pay you $80.”
    What could they do? Commercial aerospace manufacturing in this country heavily dominated by Boeing. Of course there’s a downside even for Boeing. My hunch is that some of Boeing’s troubles with the 787 are a result of subcontractors weakened by all that cost-cutting. They lost their best employees. They didn’t keep up with new technology because of financial constraints. Their Boeing-created woes became Boeing’s problems.
    Amazon is playing that same game. To fuel it’s growth, it can’t shaft customers with higher prices (at present). That’d leave an opening for competitors. So it shafts those who provide it with goods. And there’s no one weaker than an independent author. That’s what Amazon is doing here.
    If you’re an ebook author, don’t be fooled by the fact that your Amazon check is bigger than your Apple check. Amazon is about 2-3 times bigger, so it sells more. Instead, compare what you’re earning per ebook. The result may surprise you.
    Apple pays 70% royalties for all ebooks from $0.99 to $199.99. Amazon only pays that for ebooks between $2.99 and $9.99. At all other price levels, it only pays a miserly 35%. For that little $0.99 introductory book you have, Amazon only pays you about 35 cents. Apple pays you 70 cents. That’s twice as much. If you get a $100 monthly check for Amazon, remember that if those same sales had been through Apple, you’d get $200.
    And that’s not all. Apple charges you nothing for file downloads and even encourages authors to include large images to make that book look better. In contrast, Amazon charges a file download fee that’s about three times the highest rates a cell-phone user pays for equivalent data and over a 100 times what Amazon charges for data downloads from its AWS service.
    In practice, that may mean your real Amazon royalties are around 50-55% not the 70% they deceptively claim. Again, compare sales income. If you sell enough ebooks through Apple to earn $700 a month, exactly the same number of sales from Amazon may earn you only $500. And no, your readers aren’t saving money. They pay the same price at Apple and Amazon. Amazon’s simply pocketing that money–your money.
    If you think the situation is bad now, imagine what the situation will be if Amazon is able to use the DOJ to either drive Apple out of the ebook market or to make it less aggressively competitive. And you’re getting a taste of that here. Amazon has already concluded that it so dominates the audiobooks market that it can slash those payments to authors. If it’s able to do the same with ebooks, look for that 35% or 70% (that’s really more like 55%) to drop even lower.
    Oh, and while you’re at it, if you’ve got a fan base, meaning people who like to read your books, encourage them to buy from sources other than Amazon. Apple’s a good choice, as are independently hosted sites that pay around 80% and can use the non-proprietary ebook readers. The only downside with the latter is that you have to give up DRM.

  4. Maria E. Schneider

    I think the original generous offer was to encourage inventory. They needed titles. Perhaps now they feel they can afford to slow the number of titles being added. The other piece of the puzzle is that they are really the only game in town offering an easy way for an author to produce an audio product. They don’t have to offer higher royalties when there isn’t much competition.