Amazon-owned Audible lowers royalty rates on self-published audiobooks

Audible (s AMZN), the digital audiobook site owned by Amazon that launched audiobook rights platform ACX in 2011 as a way for authors and publishers to profit from their unsold audiobook rights, is now lowering the royalties it pays on those audiobooks.
ACX enables rights holders — authors or publishers, though the site has become increasingly geared toward self-published authors — post their rights on the platform and let producers and narrators bid on them. Once the book is recorded, the rights holder can sell it through Amazon and Audible exclusively for a higher royalty rate, or sell it wherever they want for a lower royalty.
Until now, these royalties have been pretty generous: Creators who agreed to sell exclusively through Amazon and Audible got a rate of 50 to 90 percent, depending on the number of units sold, while creators who chose the non-exclusive option got a royalty rate between 25 and 70 percent. On Thursday, however, Audible announced in a blog post that it’s lowering and flattening royalty rates:

“Effective for projects started on or after March 12, 2014, titles distributed exclusively to Audible, Amazon, and iTunes will earn a non-escalating 40% royalty paid to the Rights Holder (or, on Royalty Share deals, split equally between the Rights Holder and the Producer). Non-exclusively distributed books will earn a non-escalating 25% royalty through Audible, Amazon, and iTunes.”

Projects started or completed prior to March 12, 2014 will continue to get the higher, escalating royalties.
Why the change? According to an FAQ, “We are lowering the royalties as we continue our mission to accommodate more audiobook productions. Our royalties still remain well above those offered by traditional audiobook publishers.”
Audible is also changing its “Bounty Program.” Previously, that program paid a rights holder $25 when their title was among the first three downloaded by a new Audible subscriber. Now, rights holders will receive $50, but only if their book is the first title downloaded by a new subscriber.
This is not the first time that Audible has made a program less generous to creators: Last June, it ended a program that gave authors $1 for every audiobook sold. At the time, the company said that the program was intended to get authors “to recognize the value of their audiobooks and to raise awareness of their audiobooks alongside their print and ebooks.”
Now, apparently, enough authors are recognizing that value that Audible can’t be as generous as it had been.

Over three years, a larger focus on self-publishing

At its launch in 2011, ACX was geared toward professional authors and publishers; Random House and HarperCollins posted books on the rights exchange, for instance, and Random House CEO Markus Dohle praised Audible in the official release for being a “great [advocate] for the audiobook consumer experience.”
Since then, however, Audible has increasingly geared ACX toward self-published authors and has begun to describe audio rights in terms of being “liberated” from traditional publishers: Its homepage, for instance, features bestselling self-published author Hugh Howey and mentions that Neil Gaiman used ACX to “liberate audio rights.” There’s also paranormal romance author Marta Acosta, who “wrestle[d] back her audio rights” from her publisher when “technology gave a giant kick to the backside of the publishing world and burst onto the scene.” And self-published author Bob Mayer notes, “[W]hen I compare my ACX sales to my royalty statements from a few of my books that are still controlled by a Big 6 publisher, there is no comparison in sales, just as my indie eBook sales outsell my Big 6 eBook sales.”
The change to ACX’s royalty structure is a reminder that Amazon could also reduce its royalties on self-published Kindle books at any time. That would be a much more visible move than the changes to ACX, which the company surely realizes. But the changes at ACX shows that good introductory deals don’t always last.