Is It “Worth It” to Make an Audiobook?
Is It “Worth It” to Make an Audiobook? This post will be an economic analysis of audiobook sales – and what makes an audiobook profitable or worthwhile from the standpoint of an author, and that of a narrator/producer.
A lot of independent or self-published authors want to expand into the popular and growing audiobook market. This totally makes sense! But in order to get an audiobook made, first they need to find an audiobook narrator/producer to work with. This post is meant as information for authors to help them understand the process of audiobook production, and hopefully also understand how to attract the best narrator for their audiobook.
There are a couple of different strategies that independent authors can use to get an audiobook made, for distribution on the most popular audiobook platform, Audible.com, as well as Amazon and iTunes. They involve working through ACX, the audiobook creation exchange and the backend for Audible. It is a matchmaking site for authors and narrators, and also a platform for the author and narrator to collaborate on the production of the audiobook, and a place to upload the finished audiobook for posting to Audible, Amazon, and iTunes.
On ACX, there are two types of production agreements (all made between Audible, the author/”rights holder,” (I’ll just call them the author here in this post) and the narrator/producer (similarly, we’ll call them the narrator):
- “Pay-for-production” or “pay per finished hour.”
- The author pays the narrator a fixed rate, usually per finished hour of audio.
- Audible takes a 60% cut of the audiobook sale price.
- The author receives the remaining 40%.
- The narrator receives no royalties.
- Royalty Share.
- The narrator invests all of the work up front to produce the audiobook at no cost to the author.
- Audible takes a 60% cut of the audiobook sale price.
- The author and narrator split the remaining 40%, giving them each effectively a 20% share of the royalties.
- (There are a couple of other options, such as “hybrid” deals and stipend deals. Those will be discussed later.)
By the way, the above figures all cover exclusive distribution of the audiobook through Audible, Amazon, and iTunes (meaning you can’t sell the book through other audiobook platforms or even direct download from your own website, otherwise the royalties go way down.) Audible handles all of the royalty payments and sends a statement each month about what they are paying you and why, so there is no need to hire an accountant or do any extra work in that department, when going through Audible.
Now, the next question folks usually have after they hear about these types of production arrangements is, how much is my audiobook going to earn? How do I crunch the numbers to see what makes sense to invest in audiobook production, and how can I make my audiobook a profitable venture?
This is a really difficult question, because there are so many factors coming into play. Here are some of them.
First of all, one cannot predict audiobook sales based on book sales, but in general there is a trend that if a book is popular, and the audiobook is good, the audiobook will be popular too. Similarly, if a book is not selling well, even having a great audiobook version is not going to turn the book into a bestseller, and it is not likely to even sell well as an audiobook. It would be great if we could extrapolate future audiobook sales figures from Kindle or paperback sales data (believe me, nobody wants this more than me, I used to be a scientist and I looooove data!), but we just can’t.
Audible sets sale prices for audiobooks. They used to let the author do it, but then took over themselves, although they still mostly adhere to these guidelines based on the length of the audiobook (copy/pasted here from the guidelines for your convenience):
- under 1 hour: under $7 [my note: more like, $3.99]
- 1 – 3: $7 – $10
- 3 – 5 hours: $10 – $20
- 5 – 10 hours: $15 – $25
- 10 – 20 hours: $20 – $30
- over 20 hours: $25 – 35
To make things even more complicated, there are multiple ways that folks can pay for an audiobook. They can use Audible credits, which are worth somewhere around $11 or $12 – subscribers get one every month as part of their membership and they can use one for pretty much any audiobook. They can be an Audible subscriber, but buy an audiobook “over plan” meaning they buy an extra one even though they used their member credit that month. Or, they can buy a book “a-la-carte” meaning they don’t even subscribe to Audible, but they still bought the audiobook. Then, there’s Whispersync, which enables someone to listen to the audiobook and follow along with the Kindle version at the same time. On top of all this, Audible can put the audiobook on sale or change the price at their discretion.
Bottom line (part 1; there are going to be several “bottom lines” in this rather lengthy post. :D): these different ways of purchasing the audiobook come with slightly different purchase prices, which means that they provide slightly different pay for the author and/or narrator. I have found that the easiest way to make sense of it all is just to try doing different types of books and gather some empirical data. Here are my latest numbers (which still fluctuate month by month). These are meant as ballpark numbers only. Since in a royalty share deal, the author and narrator earn equal royalties, authors can use these too as guidelines for how much they could potentially earn in a royalty share agreement. For a pay-for-production deal, double these numbers, because the author would be keeping all of the royalties.
- Full length book (6 hours or more) – I earn about $2 per unit sold
- Novella (3 hours) – I earn about $1.50 per unit sold
- Short story (1 hour) – I earn about $0.50 per unit sold
I don’t have much data on audiobooks in the 10 to 20 hour range, but I’m waiting on the release of one, so I may have it soon.
How do you calculate how long your audiobook is? Take the word count of the book and divide by 9000. Approximately 9000 words of text = 1 finished hour of audio. Here’s a table for quick reference.
|Word Count||Length of Audiobook (hours)|
To give you an idea of the work involved in audiobook production, it is quite time consuming. Each finished hour of audiobook can take between 6 – 10 hours of work to produce. Some producers work faster, but I haven’t been able to get below the 4 – 6 hour range of work for 1 finished hour of audiobook, and honestly it’s usually more pushing 6 – 10 hours for me. No matter how you slice it, it takes time, especially to get a good quality product that sounds engaging, is error free, and just generally represents the type of quality a buyer would expect when purchasing an audiobook.
For a narrator, royalty share deals are risky. However, they can pay off if a narrator is selective about which titles they agree to take on as royalty shares. Authors often love royalty share agreements, because it means they get an audiobook produced for free*. However, it is key to understand: when you as an author offer a royalty share deal to a narrator, you are asking them to work for free. Hopefully, it will pay off eventually, but that’s not guaranteed. The narrator is taking a risk – it could really pay off, given that there’s no upper limit to what a royalty share title could earn. However, it could completely flop, and if it does, the narrator is out of luck.
So, basically, when calculating whether it’s worth it to take on an audiobook project, I as a narrator attempt to figure out:
- How long the finished audiobook will be
- How much work will be involved in me producing the audiobook
- How much I want to get paid for the work I’m putting in
- Will I be able to get paid?
- How much to quote the author for a pay-for-production arrangement
- How many copies of the book would need to sell in a royalty share arrangement for me to be compensated for my work
- If I don’t think the book will sell enough copies, to compensate me for my work, can I work out a royalty share plus low per-finished-hour rate to make it worthwhile.
Now we’ll discuss rates.
It is not in a narrator’s interest to put in the work to produce an audiobook unpaid unless they think it will sell well enough to be worthwhile, so if you go the royalty share route, make sure to have sales numbers (the closer to #1, i.e. the lower, the better), amazon ratings (the more the better, doesn’t have to be 5 star, in fact, that’s a bit suspicious that the author may be stacking the deck with their friends and family leaving reviews), and information about your social media and marketing plan to reassure the narrator that their investment of work will pay off in audiobook sales.
If you pay a narrator up front, expect to pay at least $200 to $400 per finished hour of audio for a good quality audiobook. You get what you pay for applies here. Many narrators outsource their editing to professional editors, who also get paid (by the narrator), so this cost is a factor too – but you don’t have to worry about that. The narrator will have taken the cost of editing into account in their price quote, whether they are paying an editor or they are the editor.
There is also the option of paying a low per-finished-hour rate, such as $50 – $100 per finished hour, plus royalty share, to cover the cost of editing or at least provide a baseline pay for the narrator in case the audiobook sales don’t come through spectacularly. This is referred to as a “hybrid” deal. The way this would work through ACX is that the author and narrator would create a royalty share contract, and then the author would also pay the narrator the agreed upon rate. The hybrid arrangement seems to be a “sweet spot” for a lot of other narrators I’ve talked to – the best of both worlds. This would be a good thing to be prepared to offer if you don’t have the budget to offer a pay-for-production deal, but want to attract a good quality narrator.
There are also some books, which tend to be good sellers (in book form,) have lots of reviews, be posted on ACX for several weeks without casting a narrator, and be on the longer side (6 – 10 hours finished,) which are eligible for a “stipend” paid by Audible. The stipend is $100 per finished hour, but it comes with strings attached – the audiobook must be finished within 8 weeks of being cast, for example. Then, on top of the stipend, the author and narrator share royalties as in a regular royalty share agreement.
The final wildcard is “bounties.” Bounties are a payment of $50 which is split between the author and narrator (so, $25 each) when a new member signs up to Audible’s monthly plan and downlads your audiobook as part of their “free trial offer.” Yes, like many subscription services, Audible’s model is, “we’ll give you the first one for free…” [evil smirk] If you do earn bounty payments, they can significantly increase your earnings. But, understand that it’s essentially a payment for getting Audible a new customer. You are recruiting people for them with your audiobook. And, the more people who join Audible, the less potential listeners you have who will give you a bounty payment.
I’m sure this has all been very entertaining, or perhaps by now your head is swimming and you’re even more confused about audiobook number crunching than you were when you arrived at this blog post. The bottom, bottom line: here’s what I do when I am trying to figure out whether to accept a royalty share deal through ACX, ask for a per finished hour rate, or try to work a hybrid deal.
|To get paid this rate per finished hour…||I would need to sell this many copies…|
|$100||200 – 300|
|$200||400 – 600|
|$300||600 – 900|
|$400||800 – 1200|
If I don’t think the audiobook has the potential to sell somewhere around 600 – 1000 copies over the next seven years (which is how long the ACX contract runs), it’s probably not worth it for me to take it on as a royalty share.
That’s 3 copies a day over the first year, 1 copy a day over the next 3 years, whatever. Sales tend to be stacked up at the beginning when the book is a new release. Sometimes they have a long tail, and sometimes they drop off a cliff. This business is very difficult to predict. 200 sales of a title is fairly easy to attain, though certainly not a given. 1000 sales is harder, but of course still doable.
Hopefully this blog post has given you a better idea of what’s involved in trying to decide whether an audiobook project makes sense for a narrator. Be prepared to offer them $200 – $400 per finished hour, or assure them that the audiobook has a good chance of selling a thousand copies (and back that assertion up with sales rank and reviews,) or offer to pay $100 per finished hour and assure them that the audiobook will bring in 300 – 500 sales.
It can be a challenge to make an audiobook profitable for the author and narrator – but it can be done! Good writing and good marketing are always on your side. Best of luck to you!
*TANSTAAFL, of course.
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