Hoping to Sell More Audiobooks, Audible Launches Rights Marketplace

With the rise of mobile devices, digital audiobooks have proven to be popular among users. But the vast majority of books are never turned into audiobooks because of high production and marketing costs. Now, Audible.com, the digital audiobook provider and Amazon.com (NSDQ: AMZN) subsidiary, is launching ACX, an online audiobook rights marketplace that it hopes will dramatically boost the number of audiobooks it sells.

Professional authors and publishers who hold unused audiobook rights can post them to ACX for producers and individual narrators to bid on. Audiobook producers can also scan the marketplace to find new titles to produce. The site is launching with over 1,000 titles; participating publishers include Random House, HarperCollins, Wiley and Pearson (NYSE: PSO) Education; participating literary agencies include Janklow & Nesbit, Writers House and Levine Greenberg.

Audiobook publishers can also search the ACX rights database to discover books to produce on their own; Tantor Audio said it will produce several titles from the marketplace each month. In addition, bestselling author and screenwriter Neil Gaiman will create his own audiobooks label using ACX titles.

Rights holders and producers will have the option to sell the rights for a flat fee or split royalties equally. Royalty rates will range from 25 percent to 90 percent based on sales and whether the rights holder chooses Audible as the audiobook’s exclusive distributor (which is required for royalty share arrangements). As part of Audible’s efforts to use their authors’ connections to gain new customers, rights holders will also earn $25 every time their audiobook is one of the first three titles purchased by a new Audible member. The ACX website contains extensive information on how authors and publishers can promote their audiobooks through Facebook, Twitter and Audible parent company Amazon.

In the latest statistics available, the Audio Publishers Association estimated the total size of the audiobook industry at $900 million in 2009. Digital downloads accounted for 29 percent of that revenue, but represented 49 percent of all units sold. Audible, which only sells digital audiobooks, has not released sales figures since it was purchased by Amazon in 2008, but Katz claims its membership base and sales are growing at over 40 percent a year, and the average member listens to 17 audiobooks annually.

Production costs for some audiobooks can be in the thousands of dollars, says Audiobook Publishers Association President Janet Benson. Costs involved include directing, narrating, editing, and marketing, though those numbers are starting to fall thanks to new technology and digital distribution. While ACX doesn’t necessarily reduce those costs, it creates a centralized location for the production of audiobooks. And because of Audible’s relationship with Amazon, distribution of the finished product is easier, Audible says.