This article, written by Michael L. Banner, is from the October 2022 edition of Nink, the monthly newsletter of Novelists, Inc. (NINC). Nink, which is packed each month with informative articles for career novelists, is a benefit of NINC membership.
Of my 16 self-published books, only half are in audiobook format. This is mostly due to the significant underwriting cost of bringing each to market (from $1,500 to $3,000 each). I have tried various methods for getting these to market, including selling my audio rights to a traditional publisher and self-publishing—either by underwriting the cost myself or royalty sharing with no up-front cost. When self-publishing your next book, here is why I learned it is best to retain your audio rights (instead of royalty sharing or selling to a publisher), self-underwrite the production cost, and self-publish your audio everywhere.
Royalty Share was first introduced by ACX’s platform for direct distribution to Amazon and Audible. It allows authors to self-publish without investing in most or all the narrator/production fees for creating an audiobook. In place of getting paid up front, the narrator and author (rights holder) split the royalties received on the audiobook’s sales for seven years, at which time the production is deemed paid.
My $26,000 royalty share lesson
In one of my three-book series, after paying to produce book one and realizing it would not sell enough copies to pay for the production costs, I offered the narrator a Royalty Share arrangement (while remaining exclusively on ACX) for the other two books. The big draw for my narrator/producer to this offer was that he would also get Royalty Share on the boxed set (all three books, including book one that I had already paid him for). I was pretty sure the boxed set would sell decently because it was 23+ hours of listening pleasure for one Audible credit. Admittedly, I wasn't confident enough to underwrite the $3,000+ production costs myself. My narrator, having some time in his schedule, agreed to Royalty Share and we launched the other two books in the series, followed a few months later by the boxed set.
As I suspected, books two and three sold poorly. But the boxed set sold 8,500+ copies, including 4,000 during a one-day Audible sale. Overall, the boxed set generated over $52,000 in net royalties, half of which went to my narrator/producer. Essentially, I spent $26,000 to produce two audiobooks and the boxed set vs. about $3,000 if I had instead paid for the production costs up front. Simply put, Royalty Share cost me almost nine times more than Pay for Production. And yes, had my narrator opposed a Royalty Share, I might never have taken the chance and invested the $3,000 to begin with. Hindsight is always 20/20 when it comes to investments, but there was yet another lesson I had not fully considered.
After three years, sales of the boxed set slowed to a trickle and decreased each month. Additionally, ACX does not allow rights holders to reduce prices or run active promotions. Locked into a seven-year contract with ACX and the narrator, unless I bought out the Royalty Share agreement, I was stuck watching sales go to zero. Before I tell you what I did, let’s explore which option is better for you.
Royalty share or pay for production?
Your budget is a big consideration, along with the marketability of the book. Some authors do quite well royalty sharing their audiobooks. And some narrators will not produce audiobooks without sharing the royalties. However, there are some very strong reasons why paying for production and retaining your rights might make more sense than royalty sharing or even selling them to a publisher.
Wide distribution and control over pricing
ACX is no longer your only choice to self-publish and market your audiobooks. With your completed audiobook files in hand, you now can self-publish through Findaway Voices. Think of it as Draft2Digital for audiobooks. Findaway provides not only distribution through Amazon and Audible (for slightly less royalties than if you publish through ACX), but they offer 42 other distributors, including library channels, Apple, B&N, Kobo, and Chirp (BookBub’s growing audiobook marketplace). Perhaps the best benefit of Findaway is that, unlike Audible/Amazon, you control your pricing and can set up price promotions on Chirp, B&N, and/or Apple.
Sell more, make more
Think of it this way: Unlike with ACX’s pre-set higher prices, by setting your own pricing and promotions through Findaway, you control the odds of selling more copies of your audiobooks. Findaway’s royalty rates are higher, thus making you more money, even though your pricing might be a lot less. Example: My 23-plus-hour boxed set is sold by Audible for $29.95, yet I only averaged $3.75 in royalties per audio sale (assuming a new ACX nonexclusive agreement). By additionally selling this audiobook through Findaway for $9.99, I can make $4.50 per sale, even though it’s being sold at 1/3 the price (depending on distribution channel). I make more and my readers/listeners get a better deal. That’s a win-win!
Try exclusive and then change
Perhaps you will want to test the waters first, as in self-publishing your audiobook exclusively through ACX to start. After all, the royalty rate is 40% of the net sales price (vs. 25% for nonexclusive). And if your audiobook is nine hours or longer, it has a good chance of performing well on Audible during the first one to six months of its release. Then after sales drop off, go wide. When you pay for production and own 100% of your audiobook’s rights, you can now elect to change your ACX contract from exclusive to nonexclusive (by simply writing an email) and publish your audiobooks wide (in addition to Audible and Amazon) through Findaway. Caution: This is not an option with Royalty Share. After my aforementioned Royalty Share agreement, I would advise against “testing the waters” in this way. Getting “unstuck” was anything but easy.
Beware the ACX royalty share lock
Even though my Royalty Share audiobooks’ best earning years were probably over, I still wanted the rights back. After negotiating a deal to buy out my narrator, I assumed that ACX could simply change our royalty agreement. That is, ACX could easily switch to collecting royalties for one person, instead of two. Wrong!
Removing a royalty share
To remove books from Royalty Share, ACX requires taking them out of production and off Audible/Amazon’s digital shelves (in this case, by the narrator requesting release), and then republishing them as new.
To continue selling them through ACX necessitates resubmitting every audio file as if they were brand new audiobooks. That means all reviews are erased; thus, I lost over 800 reviews on just my boxed set alone. Submitting books through ACX is time-consuming, depending upon internet upload speeds. Resubmitting them is far worse. The process took many long hours to complete, and those books were still not available for sale on Audible or Amazon for many days after submission. Multiple technical issues (by ACX) caused problems in trying to submit the files, resulting in numerous back-and-forth emails and a phone call.
Concurrently, I submitted each one of these audiobooks to Findaway (for distribution outside of Amazon/Audible), who approved and began distributing them within three days of submission. I can now run promotions, submit them for inclusion in BookBub Featured Deals (not quite as hard to get an ebook Featured Deal), and make more on each sale than I would on one Audible retail credit/sale. Meanwhile, I continue to wait to receive approval from ACX for re-inclusion on Amazon/Audible.
Sell direct, too
Lastly, consider adding direct-to-consumer sales for your audiobooks. Findaway offers (for a cost) a sell-direct service called Authors Direct. I am currently trying out BookFunnel’s new audiobook beta, along with WooCommerce (both free). In either case, you can sell your audiobooks direct to readers/listeners on your website and receive nearly 100% of the sale price as your royalty (you’ll have transaction fees of up to 5%). Using my example, if Audible’s price is $29.95 and Findaway’s (through its partners) $9.99, I could sell it direct to my subscribers for $4.99 and still make even more money. Now, my subscribers get the best deal possible, and I am selling my audiobooks everywhere, at the same time.
With the options available to authors today, why give away your audiobook rights? You can offer your audiobooks through the largest platforms (Amazon and Audible), all the other retail platforms, libraries, and sell them directly through your own website… simultaneously. But you cannot do this if you Royalty Share or sell your rights to a publisher.
For me, I have 26,000 reasons why I will always pay for production and retain 100% control of my audiobook rights and royalties. My conviction is so strong that I have even secured the rights back to my only traditionally produced audiobook.