The Problem with Audiobooks

Asymmetry is the word.

Best-selling science fiction author Brian Niemeier recently weighed in on the titan of the fantasy industry, Brandon Sanderson, keeping his crowd-funded books away from Audible. You should read Brian’s article on the matter and note what Sanderson talks about. As an independent author of more modest means, I’ll weigh in on a few things regarding Audible and audiobooks in general.

People frequently ask me about audiobook versions of my books. I have a few out (Garamesh, Keys to Prolific Creativity, Eyes in the Walls, Voices of the Void, and technically Afterglow), but they represent only a small fraction of my catalog. Many of my more popular books remain in print and ebook forms only. All my audiobooks are self-produced, and I’m the one doing the reading.

The main reason for this is that audiobooks are expensive and/or time-consuming to make, and I have both limited time and limited money. Most of my books simply don’t sell well enough to justify either spending the money for a narrator or else pouring the hours of work necessary to produce audio files into the abyss to get the book on Amazon. I have a background in drama and public speaking as well as audio recording, so making an audiobook is within my skill set. This is, however, not the case for a great many authors. I can eat the loss of my time to create an audiobook to serve the meager demand for them, but most authors have to pay out of their pocketbooks.

When considering making an audiobook, you have to consider the return on investment as a loss of time. It’s not just how much money you will make on the book but how long it will take you to break even if you ever do. Businesses can and do take on debt, but usually, it is under the assumption that what is acquired with the debt (the capital goods that make up the technical, economic definition of investment) will produce profits.

Just for some practical application, let’s take my book, The Keys to Prolific Creativity, which has an audiobook on sale for $10.46. We’ll round down and say it’s ten dollars. Amazon pays me 40% royalties, so I make about four dollars per sale. I’ve only sold 117 units of that audiobook through Amazon (though many more people have listened to it through my Patreon and my YouTube), meaning I have made approximately 470 dollars on the audio version. That audiobook came out in 2020, so if I had paid $1,000 dollars for the recording (not a high figure), I could possibly hope to have made money after eight years. And keep in mind I may not make four dollars per sale because of the way Amazon handles audible subscription credits. That’s pretty terrible. And that is for one of my better-performing books, assuming that I can keep selling it consistently for years on end. For a book like Alshafaltha, which I knew was never going to be popular because of its style, I would likely never break even.

Yes, you could pay less for a recording, which is exactly what I did by recording it myself. I maybe made 40 dollars an hour, including the administrative overhead, which is pretty good. But the fact is that I can only do that on books that I believe are going to sell decently in the audio format, knowing that audiobook sales are always a small fraction of the print/ebook sales. I’ve sold thousands of copies of Keys to Prolific Creativity to then move less than 200 copies of the audiobook.

In brief, to justify the expense of a professional audio recording, your book needs to be a certified best-seller. If it is, great! The audiobooks will add to your sales and you’ll make a little extra. I’m more worried about the independent authors who are new to this game, who get duped into dropping big money on audiobook production without realizing how long it will take to recoup the expense.

Gurus were big on the audiobook market a few years ago because it was, unlike the ebook market, a “growth market,” meaning more people were buying units month over month. Presumably, this would make it easier to get in on the ground floor, but I didn’t see it pan out that way (it turns out people look for audiobooks of books they already want; the best sellers in print are also the audiobook best-sellers), and all that was before 2020 when the market for audiobooks collapsed. That’s another reason I stopped putting out audiobooks. About 80% of those 117 units of Keys were from the first three months of release before the lockdowns of 2020 destroyed the market. Authors today need to realize they are putting an audiobook out into an already saturated market that is post-collapse.

Savvy authors may already be thinking of another way to make an audiobook: the ACX exchange.

ACX is an Amazon company that fronts the distribution of audiobooks into the market (including but not limited to Amazon) and is one of the only ways (perhaps the only way) to get distribution of your audiobook if you are an independent author. I can write more about the process for those of you interested another time, but relevant to this discussion, this is the area where Sanderson objects to the treatment of audiobooks: the royalty is 40%, not the usual 70% for other digital goods like games and ebooks.

Now, ACX also gives authors the option to split royalties with a narrator.

Aha! This seems like the perfect solution to the problem of expensive production. The author pays nothing up front!

The problem with this is that you are either victimizing the narrator through underpayment or slashing your own profits while giving another person an equity stake in your work.

It all comes down to symmetries of knowledge. If you know your book is going to sell well (like if you are an established author with a proven sales method), you will want to find a narrator for a fixed price in a work-for-hire arrangement so that you maximize your profits. You’ll only want to split royalties if you don’t believe you will make much money on your book, in which case, how much is the narrator getting paid?

If he recorded Keys to Prolific Creativity, he’d be making perhaps 20 dollars an hour, but only after months of me doing all the marketing work. If he had recorded Voices of the Void, which sold only seven audiobooks last year, he’d be making quite a bit less (to be clear, I was only able to put out the audiobook last year, but I released the book in 2018 so its sales have been lower than the 2019 peak). And these are both short audiobooks! What if he recorded your fantasy epic, and it was a 20-hour file that sold only ten units? He’d be making fifty cents per hour (assuming it takes about two hours to record and edit one hour of audio). What if I got somebody to royalty share on Afterglow, a literary fiction anthology that I explicitly anticipated would not be a hit? What if it sold two units?

I don’t know about you, but I think somebody’s talent and work ought to command more than that.

I’ve had several narrators attempt to sell me on the royalty split, and I tell them as much. Either I’m taking advantage of you by getting your work at a steep discount (not to your intent), or you are taking advantage of me by thinking that you’ll earn passive income while I spend all the energy (and money) marketing the product. It’s the wrong kind of skin in the game.

The only really symmetrical arrangement is work-for-hire. The voice talent gets paid what he is worth up front by the party who assumes the risk, doing the creative work of making the book, and doing the marketing work in hopes of a future profit. Nobody hopefully feels screwed at the end of it because all the knowledge is symmetrical. You could make a royalty-sharing arrangement with someone new to the business who agrees to the terms based on the fact that nobody else will hire him, but if that is the case, why not just make a work-for-hire arrangement at a predetermined discount? If nobody will hire him, maybe he is willing to work for two dollars per hour and views the experience and exposure as just compensation. In that case, I would still want to pay him $100 upfront so he can say he got a paying gig from me.

I will share an anecdote that is somewhat related.

I actually had someone contact me some years back saying he had already recorded an audiobook for the first Needle Ash book and wanted my permission to publish it on YouTube and engage in a royalty share agreement with me. This had my spidey senses all tingling. I told him “no” and stated that had he asked me ahead of time, I wouldn’t have approved it because there was no way it would be worth his time. I was actually a little bit offended by the presumptuousness of the offer, as it felt manipulative. Needle Ash was originally released as a trilogy, so of course, I would need to have the other two books recorded (and paid for), and how was I supposed to feel about telling a person that he spent all that time recording a book for me to get nothing out of it?

My suspicion is that he assumed what lots of other people assume when they see that I have a YouTube channel with some popular videos: that I am more successful than I am. I remember how shocked people were in 2016 when I told them I had only made 100 dollars selling books at that point. I had all these subscribers… certainly that meant I sold a lot of books, right? Viewers don’t always translate into sales, particularly when your views are concentrated on Elder Scrolls guides, classical guitar tutorials, and complaining about Star Wars, and you happen to write fantasy and horror books. I thought Star Wars fans would like my Samurai book, but alas, no.

Anyway, my hackles were metaphorically raised because I perceive the asymmetry of ACX royalty sharing. If someone was contacting me with such a proposal, I assumed he did, too. He just thought the asymmetry favored himself in this case since, at that point, I had only one experimental audiobook out (Garamesh and the Farmer, if you were curious). Of course, he could have been naïve or just more well-intentioned than I felt, but it was still a bad approach.

So, what would have been a better way to approach me?

Instead, I would have preferred something in the way of:

I saw you on YouTube. I make audiobooks part-time. Here are some I have already made. I was wondering if you needed someone to make the audiobook for Needle Ash. I usually charge x per page.

Now, everything is symmetrical. I can make an informed decision about the costs vs. what kind of product I can anticipate getting. Then, nobody does any unpaid work.

And that is really my point about audiobooks in a nutshell: the cost is only justified if you have good information on your potential sales. Figure out the math for your book and your past and potential future sales. It’s a tough business, and it’s only gotten tougher over the last few years. It’s okay to take it slow.

Of course, maybe new AI voice features will change all of that and render the whole thing moot. That’s for another day.

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