Amazon lowers royalty rates on Audible ACX-created audiobooks

Troubling news out of Amazon. GigaOm’s Laura Hazard Owen reports that Amazon’s Audible audiobook platform, which launched audiobook self-publishing in 2011, has announced it is now lowering the royalties it pays on audiobooks created through its “ACX” audiobook creation platform, as well as changing its “Bounty” audiobook incentive program. The ACX platform serves as a clearing house that matchmakes audiobook rights holders with producers and narrators to create a finished product.

Previously, audiobook creators who sold via Amazon received 50% to 90% royalties (depending on number of units sold) if they sold exclusively through Amazon and Audible, or 25 to 70% if they sold non-exclusively. For projects started on or after March 12, however, those rates drop to a flat 40% and 25% royalties, respectively.

Also, Audible’s “Bounty” program previously paid the creator $25 whenever their book was one of the first three downloaded by a new Audible member. Now, however, it will pay $50 when it is the first single book downloaded.

Owen notes:

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.

Just something to think about. Given that Amazon is making noises about raising the fees on Amazon Prime in the US (and they already did raise it in the UK and Germany), they might just be starting to tighten the belt. We’ll just have to see what happens.

4 Comments on Amazon lowers royalty rates on Audible ACX-created audiobooks

  1. A 25% royalty is pitiful. I knew it was bad news when Amazon acquired Audible. This confirms that.

    More and more, a pattern is emerging. While Amazon’s size still means authors need to sell there, the smart move is to never become dependent on it. When you are in business, it’s as dangerous to have the bulk of your sales through one outlet as it is to get the bulk of your raw materials from one. Singling puts you in their power. It’s particularly dangerous for companies that have a reputation of bullying.

    Some helpful principles:

    * Don’t single-outlet your retailing with Amazon or any other retailer. Be available through as many outlets as possible. You might use Smashwords or Bookbaby to reach the smaller retailers.

    * Have no Amazon exclusives.

    * If you’re fortunate enough to be in touch with your fan base, encourage them to buy from retailers other than Amazon, perhaps by stressing the advantages. Apple, for instance, uses industry-standard ePub and will in every case pay authors as much or more than Amazon.

    * For ebooks, consider using one of the little known file-download retailers that allow you to sell directly. They manages all the payment and file download details for you. One I checked out paid more than any of the larger retailers for any ebook priced over 99 cents.

    * The digital market is changing rapidly. Watch for changes like this one and respond quickly. Some companies will pay well to get authors to sign up (as here) and then cut royalties or add charges.

  2. “A 25% royalty is pitiful. I knew it was bad news when Amazon acquired Audible. This confirms that.”

    Amazon acquired Audible in 2008, when there was a zero percent royalty for self-pub audiobooks because there was no way to self pub audiobooks. So your definition of bad news is going from not having a self-pub option to having one? Really?

    Folks, i don’t think we could have a clearer example of Amazon Derangement Syndrome.

  3. Uh, excuse me Nate? Just because Amazon didn’t have a way to self-pub audiobooks doesn’t mean that there weren’t other ways to do so. Heck, you could even sell it via paypal.

    Nowadays there are lots of ways to publish audio through CDbaby and tunecore and ditto — with substantially higher percentages than Amazon. With Amazon you don’t come anywhere near these percentages unless you do exclusivity and DRM.

    Audiobooks are different from ebooks because there’s more upfront production costs, and I genuinely think that Amazon is trying to tweak its revenue sharing/royalties to encourage more production of ebooks. But make no mistake; Amazon’s royalty percentages are really low because Amazon believes that its mobile app offers more convenience to the consumer.

  4. Robert, just because the options existed doesn’t mean it it was possible or practical for an author to find and hire a sound engineer and a voice actor. ACX changed that.

    And that sentence was supposed to refer specifically to Amazon/Audible, not audiobooks in general. I should have been more careful.

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