Regarding Audible

From Brandon Sanderson:

Hey, all. Brandon here, with what I consider to be some pretty exciting news. Many of you may remember when I wrote last year about my worries regarding audiobook royalties (particularly for independent authors).

. . . .

• I seriously worried about the opacity of reporting to authors about audio sales. We didn’t know what a sale meant, how much of an Audible credit was given to authors when a book sold via one, and how royalties were being accounted.
• I felt that the industry was taking advantage of authors because of their lack of powerful corporate interests to advocate for them. While video game creators and musicians get 70–80% (88%, in fact, on two major platforms) of a sale of their products in a digital platform, Audible was paying as low as 25%–with the high end being instead 40%.
• I felt I could have gotten a better deal for myself, but the entire state of this industry was seriously concerning to me. So, I made the difficult decision NOT to release the four Secret Projects on Audible, costing me a large number of sales, to instead try to bolster healthy competition in the space, highlighting some of the smaller Audible competitors.

I hoped this wake-up call would prompt change. I didn’t refuse to put my books on Audible out of retribution or to declare war; I did it because I wanted to shine as powerful a light as I knew how on a system that highly favored the audio distributors over the authors. I was convinced that the people at Audible really did love books and writers, and that with the right stand taken, I could encourage them toward positive change.

I’m happy to say that this stand has borne some fruit. I’ve spent this last year in contact with Audible and other audio distributors, and have pushed carefully–but forcefully–for them to step up. A few weeks ago, three key officers high in Audible’s structure flew to Dragonsteel offices and presented for us a new royalty structure they intend to offer to independent writers and smaller publishers.

This new structure doesn’t give everything I’ve wanted, and there is still work to do, but it is encouraging. They showed me new minimum royalty rates for authors–and they are, as per my suggestions, improved over the previous ones. Moreover, this structure will move to a system like I have requested: a system that pays more predictably on each credit spent, and that is more transparent for authors. Audible will be paying royalties monthly, instead of quarterly, and will provide a spreadsheet that better shows how they split up the money received with their authors.

This part looked really good to me, as I understand their decisions. I tried poking holes in the system, looking for ways it could be exploited, and found each issue I raised had already been considered. This doesn’t mean it’s going to be perfect, and people smarter than me might still find problems that I didn’t. However, I think everyone is going to agree the new system IS better. We will better be able to track, for example, how Audible is dividing money between books purchased with a credit and books listened to as part of their Audible Plus program.

. . . .

I’m not at liberty to explain in its entirety their new structure right now, as they’re still tweaking it, but they did say I could announce its existence–and that I could promise new, improved royalties are on the horizon.

Now, before we go too far, I do anticipate a few continuing issues with the final product. I want to manage expectations by talking about those below.

• What I’ve seen doesn’t yet bring us to the 70% royalty I think is fair, and which other, similar industries get.
• Audible continues to reserve the best royalties for those authors who are exclusive to their platform, which I consider bad for consumers, as it stifles competition. In the new structure, both exclusive and non-exclusive authors will see an increase, but the gap is staying about the same.
• Authors continue to have very little (basically no) control over pricing. Whatever the “cover price” of books is largely doesn’t matter–books actually sell for the price of a credit in an Audible subscription. Authors can never raise prices alongside inflation. An Audible credit costs the same as it did almost two decades ago–with no incentive for Audible to raise it, lest it lose customers to other services willing to loss-lead to draw customers over.

These are things I’d love to see change. However, this deal IS a step forward, and IS an attempt to meet me partway. Indeed, even incremental changes can mean a lot. When I was new in this business, my agent spent months arguing for a two-percent change in one of my print royalties–because every little bit helps. These improvements are going to be larger than two-percent increases.

Link to the rest at Brandon Sanderson

As PG has mentioned before, he doesn’t think that many of Amazon’s best technical and business minds are to be found in KDP and Audible.

While indie authors help save Zon’s bacon way back when all the big New York publishers got together and decided to stop selling books to Amazon, that’s ancient history at this point, however.

Just like KDP, Amazon has kept the Audible managers in their own little world, separate from the giant parts of Zon that generate billions of dollars every couple of weeks.

So, Audible gets sloppy about indie authors and audiobooks. Zon is the biggest seller of audiobooks by light-years, but the dollar amount audiobook sales generate won’t move any big needles in Amazon’s megaworld.

Brandon sells a huge number of print books/ebooks/audiobooks for Zon. While Brandon moving everything from KDP/Audible won’t move Amazon’s big revenue needle, it will definitely impact KDP/Audible revenues and profits. PG suspects that if Brandon decides to go another way, the hit on KDP revenues would be substantial, maybe big enough so the bigger bosses in corporate who have the book businesses as a part of their larger responsibilities might ask embarrassing questions and maybe fire some KDP bigshots.

But this is pure speculation on PG’s part and he could be completely wrong.