AUTHORS STRIKE: Back in 2015 and 2016, Audible was one of
the most popular sponsors on YouTube.
Since then, Audible sponsorships have become a lot less common but not because the sponsorships
didn’t do so well but actually because the sponsorships did do so well.
You see, Audible has very much become a monopoly over the past several years growing to a market
share of 63.4%.
So, Audible simply no longer needs to market themselves much because they’re already
the go to option for the majority of Audio book listeners atleast within the US.
But as is common with monopolies, Audible has turned to using their monopoly as leverage
against their users.
And I’m not talking about their listeners, I’m actually talking about their tens of
thousands of authors and writers that make the entire platform possible.
For quiet some time now, Audible has gotten used to the practice of forcing authors and
writers into extremely unfavorable deals.
Authors really can’t do anything about it though as they have much more to lose if their
books are not on Audible.
This is especially bad if you don’t have a big publisher backing you and you’re an
indie author.
But all of this may be changing as one author named Brandon Sanderson has started a sort
of movement against Audible at the beginning of this year.
Sanderson has made the bold choice to stop publishing his books on Audible even though
that would lead to a substantial pay cut, or atleast that’s what he thought.
Readers and supporters would rally behind Sanderson like we’ve never seen before.
Sanderson launched a kickstarter with a goal of raising $1 million and he ended up raising
wait for it $41.7 million within just 30 days.
This made his kickstarter the most successful kickstarter of all time.
Now, I’m not sure how many of these 185,000 backers will actually end up reading his book
when it comes out but that just makes the entire ordeal even more impressive.
So many people have rallied behind Sanderson not to get access to his new books but to
make a statement against Amazon’s monopoly with Audible.
So, join me as we take a look at the biggest controversy in Audible’s history.
AN AUDIBLE PROTEST: Taking a look back, the Audible saga dates
back to Sanderson’s annual wrap up essay.
Every year, Sanderson likes to summarize his journey as a writer over the past year and
his plans for the foreseeable future.
Much of the post is rather positive and uncontroversial.
He talks about how he’s excited about his 4 new novels and an upcoming secret project
with hollywood.
But things take a dramatic turn when he drops the bombshell that his upcoming books will
not be available on Audible because of principle.
He argues that the deal that Audible offers Indie creators is straight up unconscionable.
With all this build up, I’m sure you’re wondering what are the numbers.
Well, it’s 40%.
An indie author on Audible only gets 40% of the total revenue, not even half.
For perspective, even brick and mortar stores like Barnes & Noble only take 50% and they
have hundreds of stores to run, thousands of people to pay, massive warehouses, and
who knows what else.
Audible on the other hand is just a cloud streaming business that’s backed by the
biggest cloud provider in the world.
So, it’s safe to say that running Audible isn’t even a challenge for someone like
Audible yet they’re demanding 60% of the revenue just because they can.
Think about this, even Apple, the company known for their high margins and lofty prices
only takes 30% of App Store related revenue.
Audible is literally taking double but it gets far worse.
You know that crapy 40% revenue share that we were taking about?
Well, that itself is only applicable if the author agrees to be exclusive with Audible.
If they so much as dare to sell their audio books through other avenues, well now they’re
only getting 25% of the revenue through Audible.
In other words, Audible gets 3 times the amount the actual author gets and that’s before
you factor in expenses.
Publishing on Audible is by no means free.
If you actually want people to listen to your audiobook, you have to pay for a professional
voiceover which costs $200 to $300 per completed hour.
Let’s even call it $200 to estimate conservatively.
The average audiobook is 10 hours long, so we’re talking about $2000 and that’s just
for the narrator themself.
You’ll also have to rent out a studio and pay an audio engineer to perfect the EQ and
cut out the bad takes.
So, by the time you have a completed audiobook, you’re already in $4 to $8,000.
Production studios that take care of the entire process from beginning to end usually charge
around $6,000 so we’ll go with that.
In terms of revenue, the average audio book retails for $20 to $30 but it’s safe to
assume that indie authors will be closer to the lower end of that at $20.
This means that with Audible’s exclusivity deal, authors have to sell 750 copies before
they even make a dime in profit.
If they don’t choose to be exclusive with Audible, well, they now have to sell 1200
copies to reach the same $6,000 from Audible.
I think you can see why this is such a big problem for the average indie author that
only sells 250 copies.
Even if they choose exclusivity, they’re losing $4,000 from the entire ordeal.
To mitigate these expenses, authors often turn to a revenue sharing deal with the voice
actor/narration company but that simply reduces the author’s cut to single digit levels.
Aka, Audible ends up pulling in 10 times more revenue per copy sold than the actual author.
No wonder Amazon was willing to pay $300 million for Audible way back in 2008.
UNBREAKABLE MONOPOLY: Now, hearing all of this, you might be saying:
Oh, well thankfully, there’s plenty of other platforms where I can buy audiobooks from
as well.
I can just go to Apple Books or Recorded Books or even look for another platform.
Right?
Hmmm, if only it were that easy.
Unfortunately, buying audiobooks from one of these other popular platforms just makes
the situation even worse.
You see, most of these other popular platforms just get all of their audiobooks from audible
themselves through a backend deal.
In fact, Apple was exclusively working with Audible for an entire decade up until 2017.
And that deal only came to an end because regulators were getting involved.
By ending the deal, Apple got regulators to step back but things didn’t really get better.
Technically speaking, Apple is indeed no longer exclusive with Audible but they’re still
basically exclusive with Audible if you know what I mean.
And this is the same case with many of the other popular platforms as well.
So, if you buy from one one of these I guess resellers really, you’re unfortunately just
making the issue worse as not only does Amazon have to make money but Apple or whoever the
reseller is does as well.
This simply gives more reason for Audible to continue raising their fee.
I mean, this is how we ended up in the current situation itself.
No matter where you go, there’s a good chance that you’re actually just buying from Audible
giving them an extraordinary amount of leverage against authors and publishers.
Usually, you hear about publishers ripping of artists whether that be musicians or actors
or whatever else.
But, in this case, Audible rips off the publishers as well because well they can.
If publishers want to distribute their audiobooks as much as possible, they pretty much have
to make a deal with Audible and it’s not easy to back away from these deals either.
Once an author or publisher signs an exclusivity deal with Audible, they used to be locked
in for a full 7 years.
Substantial protesting has fortunately brought this all the way down to 90 days but it’s
still not all that great when you consider why the lock in period even exists.
Normally, record companies and publishers have a lock in period because they themselves
have made a substantial investment into the artist whether that’s printing books or
paying for a recording studio.
For Audible on the other hand, there is no upfront investment.
All of the upfront investment comes from the author.
So, why does Audible have a lock in period?
Well, you might be thinking it’s to just make more money but that wouldn’t even be
that bad at this point.
The real reason Audible likes to lock writers into such contracts is their Great Listen
Guarantee.
If you’re an Audible user, you’re probably familiar with this program.
Essentially, it’s like a money back guarantee.
If you think that a book didn’t provide enough value for it’s price, you can get
your money back.
Amazon is well aware that some people will abuse the system and use Audible as a library
but to an extent, they’re ok with that.
Paying out these refunds is not too big of a deal for them and they’d rather have these
people as flaky customers as opposed to non customers.
So, from Amazon’s perspective, it’s in their best interest to lock in books for as
long as possible to creat this sort of infinite library.
For authors, however, it’s a wholenother story.
Authors are charged when people take advatnage of this program reducing the small amount
that they already earn.
And they have no choice but to put up with it for the remainder of the lock in period.
EXPLORING ALTERNATIVES: All of that brings us back to Sanderson and
his fight against Audible.
Not only did Sanderson want to point out all of the major shortfalls of Audible but he
wanted to propose a few alternatives which was way harder than he originally imagined.
Every single publisher and streamer he talked to already had ties with Audible except for
Spotify and Speechify.
Spotify, I’m sure you’re familiar with, it’s the music streaming platform and it
looks like they would be happy to eat into Audible’s marketshare.
As for Speechify, they actually started off as a tool meant for people with dyslexia but
they’ve slowly expanded their reach over the years.
Sanderson wasn’t able to share the details about the Spotify deal because of an NDA but
he was able to share the details of the Speechify deal.
In fact, Sanderson claims that he was offered a 100% royalty when he originally approached
Speechify.
He was about to take this deal actually until he realized that by taking this deal, he would
just be propagating the same issue that he was trying to fight against.
The idea that these big streaming platforms only work for established authors and massive
publishing companies while indie authors are left in the dust.
As such, Sanderson reached out to the CEO and asked for a deal that Speechify would
be able to offer to not just himself but all authors.
Speechify came back with a 70% revenue sharing offer which is what Sanderson and likely hundreds
of authors have since decided to go with but that battle is far from being over.
Sanderson is just one of thousands of accomplished authors.
Sanderson leaving alone will by no means put Audible out of business or even make them
flinch.
We would need to see hundreds of other major authors along tens of millions of users choose
a service that's truly separate from Audible if we wanna get Amazon to even consider a
policy change.
And this is where the real problem lies.
Getting people to switch away from Audible is a mountain of a task.
For established authors, sure Audible might pay out far less per sale, but the scale and
reach is far larger making it far more profitable than switching to something like Speechify.
And as for users, well, another Amazon service/subscription fits right in with their lifestyles.
They’ve already got the kindle and an Alexa smart speaker and the perks of being both
a prime member and an Audible subscriber and all of that.
Also as far as they can tell, all of their popular favorite authors are doing quite well
so they see no need to switch from what they’re already used to.
And this all makes sense given that this was Amazon’s plan all along.
Put golden handcuffs on established authors and users so that they can maximize revenue
and profit for themselves as that’s what happened to Audible.
Another popular YouTube sponsor that isn’t as wholesome as they may seem is Skillshare.
Check out this video to learn more.