How is it allowed that:
- Audible has 65% market share in the US for audibooks
- It offers 20% royalty share to authors if audibooks are sold non-exclusive (so, outside Audible as well). So for a $10 audiobook: Amazon takes $8, publisher gets $2!
Audible offers a 60% take rate (for a $10 audobook, Amazon keeps $6, publisher gets $4) when *exclusively* selling with Audible.
Thanks to its market monoploy, this means that it makes no real business sense for publishers to sell outside Audible.
Sounds anti-competitive
As contrast:
Amazon has a 40% take rate for e.g. physical goods sold on Amazon. (So for a $10 item sold: Amazon keeps $4, merchant gets $6).
For Kindle, it is 30% take rate for books under $10 (so Amazon keeps $3, publisher gets $7). For books over $10 it's 65% take rate (Amazon keeps $6.5, publisher gets $3.5)
In terms of what is required to distribute an audibook:
- Store metadata
- Store mp3 files
- Serve metadata + mp3 files, and maintain an app that plays these
Of course there are nuances, but not as many costs as when selling e.g. physical goods:
Small correction: when distributing outside of Audible, the royalty rate drops to 25%, not 20%
It's still a major penalty and a policy that helps Audible+Amazon maintain its monopolistic position across audibooks
Source: Amazon (ACX is Amazon)
Because readers don't know, and writers don't refuse.
So who's to stop them?
The free market works, but it works to the extent that market information is available to everyone.
When I refused to do business with Audible, and talked about why to my audience, most Audible users in the crowd had no idea how little they pay authors. And most of them were appalled.
Many cancelled subscriptions.
But, ultimately, appealing to people's better nature is a sideline. You need massive publicity, and many people don't care.
The people who need to stop the robbery are the ones being robbed: the authors.
You will never see a Devon Eriksen novel on Audible. Not under any circumstances.
Not even if they offer me a special superstar deal, like they did for Brandon Sanderson, when he made initial noises about boycotting them.
(The terms of said deal are secret.)
You see, readership is not a zero sum game. People who buy books, buy more books. The winning market move for authors is to increase the total number of readers.
I am not in competition with other good science fiction authors. I am in cooperation with them. Buying someone else's SF increases the odds that a reader will buy mine.
Which means it is BAD for me if Audible strangles new authors' careers in the cradle.
And make no mistake, that is what they are doing.
"Novelist" is a brutally hard career to break into. Without a lot of publicity, it doesn't pay the bills, and when you are new and unknown, that publicity is hard to get.
Taking a double lion's share of what little money new authors get can make it impossible to continue.
The next Heinlein, the next Tolkien, may very well be out there, but he may have gone back to selling insurance because he couldn't make writing pay.
This is not just evil greed.
It is stupid greed.
It is greed past sense and reason, greed to the point where Audible is actually stealing from themselves.
You see, the money, the real money, the big, the life-changing money, the create-a-dynasty money, the support-a-whole-industry money, in fiction writing, is all at the top.
It's in the A-list. Sanderson, King, Herbert, Tolkien, Childs, and so on.
The whole point of trying to launch a writing career is that you are swinging for the fences. Shooting for that A-list. Otherwise, you'd be better off sticking to engineering, or insurance sales.
A-listers don't just get rich themselves. They support the whole industry.
The midlist usually does little more than break even, and unknowns and newbies don't make money at all. Everyone who earns their bread off book sales needs new A-listers, or they have no job.
So where do new A-listers come from?
They come from the midlist. Or from total obscurity.
They come from, in other words, the ranks of those authors who can barely pay the bills. If they are lucky.
If you take so much from these people that they cannot afford to continue, then you are eating your seed corn.
Harvesting your seedlings.
Killing the golden egg factory for a dinner of roast goose.
And this is why I say I will never do business with Audible.
Not merely because they wish to cheat me.
Not merely because they are cheating everyone.
Not merely because they are killing the industry.
But because they can't stop.
Audible has most likely painted themselves into a corner, to the point where they cannot, literally cannot, simply change their minds, come around, and take 15% like any decent digital sales platform.
They couldn't change even if they wanted to.
Why not?
Because when companies have outrageous profit margins, or even outrageous amounts of investment dollars, they tend to find ways to spend that cash.
I saw this in Silicon Valley.
They hire lots of useless people for silly roles, like "Diversity and Inclusion Officer". Chefs to provide free gourmet lunches. Masseuses.
Hell, in some of the big tech firms I was at, people's secretaries had secretaries.
Once that outrageous money is being spent on stuff, that stuff becomes somebody's salary. Somebody who isn't gonna want to get laid off.
And your employees don't want to give up their massages.
Of course, as I said previously, shrinking Audible's take would be likely to increase their overall revenue.
But even if one could convince them of that, this transformation would require them to tighten their belts today, in the hopes of getting rich years from now.
The employees who enjoy high profit margins right now aren't going to be on board with that, especially not the ones who would lose their jobs.
And they would create tremendous internal friction against any such change. Probably too much to overcome.
They would most likely unionize and loudly proclaim that Audible employees were being victimized and cruelly deprived of foot massages just so greedy authors could have luxuries like electricity and mortgage payments.
No, there are only two ways that Audible changes.
1. If someone with vision and a thick skin buys the company and runs through it with an axe, like Elon Musk did to Twitter, turning it into something that doesn't suck.
2. Authors refuse to do business with Audible, and viable competition enters the market to do business with those authors.
The only thing that can put pressure on Audible is viable competition.
If other companies begin eating Audible's market share by offering books that Audible can't, then Audible will be forced to bring its cut under control. Or it can simply die and be replaced by those other companies. Makes no difference to the authors.
Point is, only scenario #2 is a real possibility.
Audible is a wholly-owned subsidiary of Amazon, and I don't see Bezos putting it up for sale, even if someone was buying.
No one is coming to help authors. We have to help ourselves.
And that means being willing to walk away from the table. Even if we miss out on 65-80% of the market.
Because in any negotiation, you have no power at all if you're unwilling to walk away from the table.
If you have no deal-breaker, then you'll take whatever is offered, even if it's 37 cents per audiobook sale, which is, according to my calculations, what I would actually get.
In practice, the hit from walking away from Audible may not be nearly so bad as authors think.
Because just as Audible maximizing their cut doesn't necessarily maximize their revenue, authors maximizing our sales doesn't necessarily maximize our revenue.
Let's suppose Audible would give me a dollar per sale (yeah, right, sure, cue the flying pigs), just to make the math easier.
And let's suppose that some other ebook platform takes 20%, allowing me to sell for $12.50 (far less than Audible charges) and make $10.
Now if I sell 100 books on Audible, I make $100.
But if I lose 90% of my sales by walking away from Audible, I still make... $100.
And I can charge less per book.
Not only that, in the second scenario, there's still 90 people who have that book yet, and someday might.
Accepting a bad deal usually isn't good for you. That's why they call it a "bad deal".
The way forward against Audible is to educate readers, educate authors, spread market information so the free market can work the way it's supposed to.
I had hoped @BrandSanderson would lead this fight, with the power of his name and market share.
But it was not to be.
We simply have to embrace the suck and go on without him.
It's up to us.
