Alright, so a quick Business Post not on scheduled, because, well I wrote it as a reply to someone on Reddit and might as well repurpose it.

This is based off Brandon Sanderson’s most recent post:

There’s a lot, but he talks about the state of the Audiobook market, Audible and the horrible 40% royalty rate. 

Then, people got confused because some people thought that Audible actually produces all the audiobooks. They don’t. I figured I’d write a bit of a clarification, which is below:


So, I think in some cases, Brandon was actually being simplistic to make it easier for people to understand. The short (and much simplified answer) is that Audible does nothing but host and distribute the files. They don’t even set-up Whyspersync – that’s all on the main Amazon side (and btw, we get paid 40/25% of whatever you pay so that’s $6.99 or whatever it ends up being).

Here’s the more complex side. – There are two companies (both owned by Amazon) involved. Audible is the retail delivery side, and ACX which is the indie author side. Note that ACX and their terms is who Brandon is really talking about in terms of contracts.

On Audible:

– Audible is a separate company by itself, it runs the actual app and website that provides you all your work. They can be reached via distributors like FindAway, but in any case, you do not earn more royalties if you go through a non-ACX distributor.

– Audible itself ALSO produces Audiobooks. However, these are separate licensing contracts that are made with Audible. In many of those cases, you earn less than the 40% (I’ve heard somewhere in the 10-15% but I have NOT seen a contract so don’t quote me on that). Like any publishing licensing contract, there’s a bunch of things and some of their contracts are, I believe is a flat rate amount for licensing fee (i.e. no royalties).

Now, let’s talk about ACX

– When you sign onto ACX, they distribute to Audible and iTunes.  

– The contract is 40% or 25% if you are exclusive or not of the royalties they receive from Audible.  

– They provide a platform to find narrators and will allow you to split royalties with a narrator easily which is really nice (in this case, the narrators work for royalties on what is called a Royalty Share contract).   

– However, if you choose NOT to go with Royalty Share, you are paying for work for hire rates. Rates vary, but it is ENTIRELY paid for by the author. Audible and ACX do not front any money, do not deal with proofing, editing, mastering or anything else.  

– You are also, when you sign up, locked into a 7 year agreement with them.

So, yeah, no. They don’t really deserve more than that, but authors have no choice but to accept it. Or encourage people to buy direct from their own websites using services like Bookfunnel. But that’s a very small % of people (and even then, it can make a HUGE difference. Like getting 95% of $15 is significantly better than 40% of $15. Which can often be even less than $15 – average is around $4.20 or roughly 28% because of all the way credits and Whyspersync come out.

I also have a lot of other posts about audiobooks, like why and how to go wide (sell on other retailers than Audible) and the cost of production for audiobooks

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