Remember Brandon Sanderson’s record-breaking Kickstarter campaign during the pandemic—the one that raised nearly $42 million? Afterward, he decided not to distribute the audio editions on Audible because they pay so little—25 percent to self-published authors if you’re not exclusive. So he struck a deal with Spotify for distribution instead, explaining, “Audible has grown to a place where it’s very bad for authors. It’s a good company doing bad things.”
Well, it turns out that Sanderson was able to bring Audible to the table to negotiate new terms not just for him, but for all self-publishing authors. Here’s a summary of what’s to come, assuming Audible keeps their word.
- There will be improved minimum royalty rates for indie audiobooks sold through Audible, but there will continue to be a royalty penalty for those not selling exclusively through Audible.
- Audible’s system will pay more predictably on each credit spent and in a more transparent manner.
- Audible will pay royalties monthly instead of quarterly.
- Audible will provide a spreadsheet showing how they split up the money received.
Sanderson writes, “We will be better able to track how Audible is dividing money between books purchased with a credit and books listened to as part of their Audible Plus program.” Read Sanderson’s full post.
Sanderson asked for, but didn’t get, a 70 percent royalty on audiobooks. Why 70 percent, you might wonder? A 70-30 split is common in the digital entertainment sector. For example, if you sell a video game app through the Apple store, you’ll get 70 percent of the price. If you sell an ebook through Amazon or Apple, you’ll get 70 percent of the price (for the most part, with some exceptions). And so on.
Until 2014, Audible/ACX paid between 50 and 90 percent royalties on audiobooks sold exclusively through Audible. But that year they dropped royalties to 40 percent even for those authors who were exclusive. Anyone non-exclusive dropped to 25 percent. And that’s where the royalty rates have been ever since.
As of 2024, the Audible/ACX royalty is not shockingly low compared to other retailers, but there’s room for improvement. For example, if you use Findaway Voices as your audiobook distributor, Apple pays 45 percent of the retail price for audiobooks; Google Play is 50 percent. (Findaway Voices takes 20 percent of whatever you earn for such sales.)
The next time a major organization gives out a service award or writers-helping-writers award, let’s consider Sanderson. Perhaps it will inspire more authors with his sales and leverage to push for change when they have the opportunity. (Meanwhile, Sanderson’s latest crowdfunding campaign, still active as of this writing, has already raised more than $17 million.)
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
So . . . while the royalty rates are going up (40% > 50% (exclusive) and 25% > 30% for non-exclusive). The way in which income from “a credit” is accounted, will be much lower than under the “old royalty program,” such that the “net to author’s income” will be significantly less – the exception being those titles that are enrolled in the AYCL (All You Can Listen) program and have an established readership. In other words, the rich will get richer and the poor, poorer.
Audible’s intention was admirable – wanting to pay royalties for “plus titles” by premium members” – but the execution is seriously flawed.
For those that don’t know there are two models on Audible “Premium” and “Plus” – the Premium plan gives you 1 credit a month to buy any “Premium title” (those sold for credits) and you can listen to as many “Plus” titles as you want “for free.” The “Plus” plan has no credit (and is significantly cheaper $7.99 rather than $14.99). With “Plus” you can listen to any of the “non-premium” content for that one low price – but you can’t get any of the “Premium content” unless you pay cash for it.
Under the old program. If a person used a credit to buy “my title” I received my income based on the “allocation factor” – which is a bit difficult to explain, but at it’s core it takes into account “list price” of each title that was bought by a credit, such that the titles that were $10 would earn half as much as a title that was priced at $20. But I was the only one getting paid for the credit spent.
Under the new royalty plan, when a “Premium” member buys a credit AND they listen to “free” non-premium titles – the money they bring in is divided between all the titles (again based on list price of those titles). So if someone buys my title (list price $20) and then listens to 4 other titles (also with a list price of $20) my royalty price is based off of 1/5 of what I would have under the old plan. Yes, my royalty is now 50% rather than 40% but it’s based on 20% of the value of that credit.
So if a credit was worth $13. Under the old plan I would get 40% of $13 = $5.20. But under the new plan I would get 50% of $2.60 or $1.30. So even though my royalty is higher my income is much much less.
Really appreciate the number crunching here, Michael—brings a lot of clarity to the situation.