Hear Ye! Hear Ye! #Audiblegate and the Audiobook Return Fiasco

by | Nov 23, 2020

By David Kudler

Perhaps you have seen grumbling on social media and across the internet about #Audiblegate and Audible’s return policy. In case you haven’t been following the controversy, let me tell you what it’s about – and why all independent publishers should care.

What’s happening is that Audible, the dominant retailer of audiobooks in the US, has been actively encouraging their customers to return their audiobooks in exchange for new audiobooks. The reader/listener gets a new book at no cost. No questions asked, regardless of how much of the first book they listened to (even if they finished it), up to a year after they purchased it. Sounds great, right?

The problem is that when the first book gets returned, the royalties earned by the narrator, producer, and author of that book get pulled back as well. So the listener gets to enjoy our work — but we don’t get paid.

Audiobooks are great

Audiobooks are a wonderful format for us to expand the availability of our work to new audiences, and to make our books more convenient for the readers we already have. The audiobook market has continued to grow at a rapid rate, whether folks are looking to fill commute time or divert themselves during the current pandemic. So many of us small and self-publishers are tapping into that potential.

There are two major challenges to entering the audiobook market:

  1. Audiobooks are technically difficult and expensive to produce.
     
  2. One retailer has a relative monopoly on the US audiobook market — at least as it is available to American indie publishers.

Audiobooks are expensive

Audiobooks aren’t cheap to create. A full-length 300-page novel will translate to a twelve- to fifteen-hour audiobook. That audiobook needs to be narrated by one or more voices. Those voices must be recorded with high-quality equipment in a prepared space free of background sound. The recordings — which will often take two or more times as long as the final product — must be edited and mastered. The whole process can take anywhere from three to ten times as long as the finished recording.

This all means that audiobooks can cost a lot to produce. I have narrated and produced my own audiobooks — and I’ve done so for others. In addition to being an author and a publisher, I’m a professionally trained voice actor with a recording space in my home that meets professional quality standards. But it still takes a lot of time for me to record, edit, and master an audiobook. I have costs to purchase and maintain equipment. And if I have to hire another narrator (for a book that needs a female narrator, say), I have to pay for their time and possibly the rental of studio time. That 15-hour audiobook can cost anywhere from two to six thousand dollars or more to produce — either in cash or (in a case like mine) in labor.

We pay those costs — not Audible. Not their parent company Amazon. The publishers incur the expenses. We expect those steep costs to be offset by sales.

Amazon’s Audible dominates the market

For most of us, the easiest way to produce an audiobook is through Audible’s ACX.com (Audible Creative eXchange). You can audition producers willing to take on your book, finding the right voice(s), working with them as they produce the audiobook, and then releasing the audiobook through ACX to both Audible and iTunes — which together account for something like 90% of the American market.

Audible offers your choice of either an exclusive royalty arrangement (which pays 40% of gross sales) or non-exclusive (which pays 25%). Given how dominant Audible/iTunes is, many of us opt for the exclusive agreement, which lasts seven years. (I often go the non-exclusive route and release “wide” through Author’s Republic or Findaway Voices — but that’s a conversation for another day.)

So, to recap: audiobooks cost the publisher a lot to produce, and many of us are locked into a relationship with Audible, trying to recoup and hopefully profit on our investment of time and money through sales.

Audible’s return policy benefits them at the creators’ expense

Here’s where Audible’s return policy becomes such a problem for us.

Audible has always had a fairly generous return policy: listeners can return an audiobook up to a year after purchasing it, no questions asked, in exchange for credit toward a new audiobook. Listened to the whole audiobook? Reviewed it? Listened to it again? No problem — here’s credit toward your next listen.

Of course, as I said, when Audible allows the return, the 40% that had been credited to the producer — typically around $5.00 for that full-length novel — suddenly becomes $0.00.

So that’s a bit of a problem from our point of view.

What makes it worse is that Audible’s reporting is completely opaque.

Here’s the sales data I got on ACX’s sales dashboard regarding my novel Risuko one day recently:

That’s a month-to-date report taken earlier this month. Not spectacular, but I haven’t promoted the book recently. (Have to do something about that!) The various “units” columns are different membership plans. Note there’s no indication of how much each unit might be worth to me — I have to wait until I’m actually paid to see that. ACX provides no further information.

A few days later, this is what that same report looked like:

Huh? Where did they go?

They got returned, of course. No indication why. No indication of whether the person listened to all of the book, half of the book, or none. These returns could have been from last year, not the ones purchased this month. Like Sergeant Schultz on Hogan’s Heroes, I know nothing.

Well, shoot. That sucks!

But wait. It gets worse.

I publish a number of audiobook series — both my own and those I’ve produced for other authors. My absolutely favorite thing to watch is when Book #1 in a series sells one day. Then the next day, it’s returned, and Book #2 is purchased with the same refunded credit. Then next day Book #2 gets returned and Book #3 purchased…. And so on, all of the way through the series. Or on to another book by the same author.

Clearly the listener enjoys the books. Clearly they’re listening to the entirety of each recording. And yet we make nothing — unless we’re fortunate enough for the listener to get off the merry-go-round on one of our titles, rather than going straight on from the last book in one of these series to one by someone else.

But wait! There’s more!

Lately, Audible has been actively promoting this “feature” to lure in new (or returning) customers. I used to have an active membership on Audible. Here’s what shows up on my account page:

Here’s what the membership promotion looks like on the Amazon mothership:

While I’m listening to an audiobook, if I tap on the three-dot information button, I’m presented with a number of options — prominently among them, EXCHANGE:

So Audible has apparently decided not only that their broken returns system isn’t a problem — it’s actually something they’re going to use to sell memberships. It’s not a bug, it’s a feature. This policy costs Audible/Amazon nothing. The cost is borne entirely by the creators of the product.

#Audiblegate

In the past few months, some ACX narrators, authors, and publishers have reported a steep increase in returns. Note that it’s almost impossible for us to quantify or document our losses, since we have no way of tracking how many there are, nor how much they’re costing us.

Mostly, we’d been suffering in silence — until thriller author/publisher Susan May published a post on what she dubbed #Audiblegate. Other authors, including science fiction bestseller Cory Doctorow and TheBookDesigner.com contributor Nate Hoffelder, spread the word.

A group of disgruntled authors, narrators, and producers has gathered on Facebook, sharing information and coordinating plans for how best to encourage our partner Audible to change its policy and improve its reporting. We’ve reached out to the Authors’ Guild for guidance, and we’ve done our best to boost the signal to our friends, family, and — especially — our readers. We want them to know that what may seem like a nice deal isn’t coming out of Audible’s largesse — it’s coming out of our pockets.

What next?

Here’s what you can do:

  1. Don’t exchange audiobooks you’ve actually listened to.
     
  2. Let your friends and readers know not to exchange.
     
  3. Join the conversation.

Want to read more articles by David Kudler? Click here.
 
Photo: BigStockPhoto

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23 Comments

  1. Pam

    Well that’s just bloomin’ ridiculous! But it explains a lot. I just got into audio narration and production on audible and have been loving the work but it’s very time consuming and challenging. My dashboard showed I had 750 book sales. How exciting watching the number climb. This week it shows me 354 sales. WTF? Where did 400 sales pcs go??? The google search trying to answer this question led me to this post. I had no idea this was the policy. What an incredible waste of time and effort and educating myself and improving the skills, doing the work for free and based on royalties. The numbers flipped on me in a number of days. I could seriously cry. What a huge let down. I’d hoped to make a career of it. I feel suckered.

    Reply
  2. Kyle

    Honestly I don’t see why people are being such pricks, $11 (approx credit price) for a 5 to 40 hour long audiobook is just crazy good. Heck some books now come free with your membership (no idea how authors get paid on that though). I don’t use the return unless I just can’t finish the book because of a narrator I don’t like or just not able to care about the story (resulting me day dreaming and missing the last 5 minutes).

    Reply
  3. rosiespinka

    Thanks for sharing this much knowledge. This post taught us in a very good manner. I am really happy to read this.

    Reply
  4. W. M. Raebeck

    David, I just sent the following message to Audible after reading your article yesterday. Maybe more of us should make our views known to them?
    …………………………………………………

    Your service is great. For customers. But what about the supply side? An issue of major concern has come to my attention. (I hope you will pass my comment along to those who handle such issues):

    I’m an author (6 books, with another out soon) preparing to do audio books. I’ve recently learned that, due to Audible’s leniency regarding swapping or exchanging titles at no cost to the member, that the author of a swapped/exchanged book receives no royalty. Although everyone enjoys a relaxed return policy, as a hardworking, lifelong writer/author, I believe every author should be compensated whenever their book is selected to be read or listened to. Whether someone likes or doesn’t like it is too personal to be measured vis-a-vis what’s fair to the writer. I can date someone for a month or two then decide he’s not for me, but I’m still responsible for my choices, and so is he. One of us doesn’t ‘win’ over the other; we both entered the relationship knowing the stakes. With the Audible protocol as it stands, Audible wins when there’s a swap, and authors lose. Yet Audible depends on authors for its entire platform….

    Audible should either impose stricter return policies or still remunerate authors (perhaps less than full royalty) if ANYONE selects that author’s book and has it for more than an hour. Members would then choose more carefully. What’s wrong with that? Book reviews would be read more carefully, and that’s good, too. This would show basic respect for those Audible depends on to keep its business alive, rather than cheating them to dazzle its customers.

    Audible authors are saying their revenue has severely dropped as Audible has become more popular. And, I’m sorry to say, but I won’t be offering my books through Audible if it continues to bite the hand that feeds it.

    I’m not saying every book is good or even worth reading. There are a lot of fly-by-night, wanna-be writers publishing books. But perhaps Audible should be more selective in which books it offers. Isn’t it a seller’s responsibility to verify the value of its offerings? I doubt ANY good writer would mind having their book approved for quality before Audible lists it.

    I understand the situation is complex; I know money talks; but Audible’s obvious member-driven priorities translate blatantly to profit over value. Screen your books better so there are fewer dissatisfied customers. Support legitimate authors writing good books. Your business should be about inspiration, creativity, and information, not everyone wading through the chaos of too many lousy books while Audible rakes in all the money.

    Reply
    • Kyle

      My only disagreement is the hour limit and getting money on returns.

      They have the ability to know how far you progressed into the book, so personally I’d say if you get past the first 25% then you shouldn’t get a refund. I can’t count the number of times a book started amazeballs but went downhill fast.

      As for no money on refund, see above. If the customer can’t be kept engaged for a minimum of the first 1/4 of the book then it’s not worth the data it took to download it.

      I say this is a avid listener with well over 1,000 titles in my library, I really wish authors got a better deal. Honestly seems like robbery to take 60% of the profit when amazon did 0% of the work other than setting up a website and craptastic app.

      Reply
  5. Kim Gaarsland

    Thank you for the information! I wasn’t aware this was even happening! I love my books whether they are in paper form or audio, I would never return one they are like my friends or children! Keep up the good fight!

    Reply
  6. W. M. Raebeck

    Thx for this imp’t piece and for getting the word out! Disturbing.

    I’m an author with in-home recording studio (closet) ready to go. I also just joined Audible to get in the mood of the thing. And it has amazed me how lenient they are with title swap and other perks. They throw it at you, in fact. During a lengthy chat w a customer service rep in Costa Rica, I was told I can have the same membership for half the price along with other perks. Clearly, all Audible (Amazon) cares about is membership and securing new members — guaranteed yearly revenue, not one-off book sales.

    And, of course, I’m not remotely shocked that Amazon has used sleight-of-hand to muscle out authors/producer/narrators to get more jewels into its crown. But I am ruffled by the near-certainty that things will likely worsen for authors. These giants — Social Media, Big Data, Big Retail, etc — don’t care. Theirs is a game of power and psychology; that’s what drives, fascinates, motivates them. They make Adolf Hitler look like Snow White. The audio book explosion is just another ka-ching, a new challenge to manipulate, that is working nicely in their favor. They know better than we do that new authors either don’t know about their options (wide or other venues) or believe they need Audible because it’s king.
    Amazon can spare a few dissenters. It knows few of us are willing to never shop on Amazon again, never sell there again, never send our email lists there to buy our books.

    And just as Audible/Amazon doesn’t expect or even want their consumers to take the high road and not exchange books they’ve listened to (‘specially when listeners aren’t breaking rules or cheating), they also don’t expect us authors to unite enough to force change. Again, I don’t see it getting better. But excellent piece, David, and sincere thanks.

    Big choices confront us all right now — do we sit back or stand up? (To this and lots more.)

    Reply
  7. MK Mancos

    To me it seems like an easy fix for Amazon to do. If they used a universal account like they do with kindle select account that all goes into a slush fund. The author then gets paid per time listened, or where the counter ends. If the entire book is listened to and exchanged, then they get paid for that entire book, whether it gets returned or not. Not a perfect solution, but better than the one they are promoting. Just a thought.

    Reply
  8. John Van Stry

    This is why I’m getting out of audiobooks. My sales have dropped so much, all of the sudden, that I’m losing money. They don’t seem to pull this crap on the major publishers, just us indies.
    I’m very sorry that I just contracted a duo to do a 12 hour book, because I can see I’m going to lose my shirt on this. The book I released last month, with one of the major name narrators is also selling well under expectations (and they promoted it to all of their fans) I’ll be lucky to break even on it.
    I used to make good money on my audiobooks – not a lot, nothing near what I make on my ebooks, but enough to justify them. But at the beginning of this year the bottom fell out of the market and books that were once very popular are suddenly only having a . hundred sales over the last 10 months.
    The lack of return data always bothered me. Now I know why. They’ve been scamming us.

    Reply
  9. David Kudler

    In the week since I submitted this article, there have been some major twists to the story. The Writers Guild of America has written a letter, which it is now circulating to its members for signatures, demanding that Audible stop charging authors for returns. And the Alliance of Independent Authors (ALLi) has announced that it has downgraded ACX to “Caution” as a service to small and self-publishers.

    Audible and Amazon have yet to respond to creators’ queries and complaints. But we’re hopeful that some they’ll recognize the need to change. Paying for to market their service with our money is not okay!

    Reply
  10. Becky Parker Geist

    Great article, David. I concur! As an audiobook producer, while we generally avoid using ACX unless specifically requested by a client, we still deal with Audible. It’s appalling that Audible is doing this. Not only do they already offer the lowest royalties to authors – and based on a calculation they won’t even fully reveal (which still seems to me should be illegal) – but now they’re finding ways to strip authors of even those hard-earned royalties.

    Our preferred distributor, AuthorsRepublic.com, distributes not just to Audible and iTunes (which are the only ACX retailers) but to over 50 channels, including all those by Findaway. We’ve also found a way to provide direct distribution and offer our clients 65% of royalties at the price they get to set.

    We encourage authors to think beyond Audible and drive traffic to other retailers, such as Audiobooks.com and Libro.fm. There are LOTS of other options. Why encourage the hoarding dragon when there are so many other better options?

    Reply
    • David Kudler

      Agreed, Becky! Thanks.

      As I mentioned, I release most of my audiobooks “wide” — and in all honesty make more money that way. But Audible is still the 900-pound gorilla in the room….

      Reply
  11. Christina Gleason

    I’m a prospective narrator (working on my first title) who is an avid audiobook listener. I’ve returned books to Audible in the past, and I probably will in the future. Some books were so bad I never finished them. Some of them, I really TRIED to give them a chance and listened until the end, but I still disliked them. Some terrible books can’t be “returned” because they were given to me with free promo codes to review. I’d love to just delete them from my library, but this was never an option.

    So I’ve maybe returned/exchanged a dozen-ish books over the years with Audible, but I own more than 200 titles. I appreciate being able to return books, but they should protect creators against serial returners, especially those who reuse credits on books with the same authors and/or narrators. And stop advertising it like it’s a library unless the creators get to keep their royalties and only give up THEIR cut.

    Reply
    • David Kudelr

      Thanks, Christina. For me, and I think for most creators (narrators, producers, and rights holders), I think we understand that, more than any other kind of book, you’re committing to an audiobook. So I don’t think any one objects to the idea of returning an audiobook you don’t like, or where the narrator’s voice really gets on your nerves.

      But that Audible and Amazon are actively using our royalties to pay for marketing their product is more than a little infuriating.

      Reply
    • Vivienne

      I can understand you wanting to return a poor book, but I feel it should be because of poor writing not because you didn’t like it.
      I have a book on my iPad that I couldn’t finish because it was so bad, but I wouldn’t return it. A lot of work went into the writing, even if it’s bad. I simply gave it a poor review.
      People should be recompensed for their work, and in many cases for the money they spent. No one would return a book to a bricks and mortar bookshops because the didn’t like it, so why should people think they should be able to return a digital book, audible or otherwise?
      As an author, I think it’s wrong that people should be able to get my books free of charge, and all my hard work be unpaid.

      Reply
  12. Deborah Makarios

    And this is why monopolies (or near-monopolies) are bad for anyone who isn’t the monopolist. Bad for the readers/listeners, even, because if profits don’t make up for costs, audiobooks will no longer be worth making, and the flow of new audio titles will dwindle.

    Reply
    • David Kudler

      True, Deborah! I think it’s one of the reasons that it’s important that independent publishers know that there are other ways to reach the growing audiobook market — as Becky mentions above.

      Reply
      • Dennis Krohn Lorentzen

        I’m a serial audiobook listener. But I also almost never return an audiobook. Currently I have 451 titles on audible. I do find the return policy for audible to be destructive. For example you have alot of books I would listen to if they where made into audiobooks. Now some people might wonder why I don’t just read the books, simple I don’t have the time, and because reading makes me tired because of my dyslexia. But if this continues I will run out of books to listen to eventually.

        Reply
  13. Gabriella

    Very well-written piece. I have been lucky that my audiobook is so under-the-radar that people aren’t returning it in large numbers! There have been returns, yes. My experience with Findaway on another book has been so much better, which I didn’t expect.

    Hope you don’t mind my asking here, but it seems you’re very familiar with Audible, David. If you do royalty share with a narrator, does that arrangement end after 7 years too?

    Thanks!

    Reply
    • David Kudler

      What a great question, Gabriella! As it happens, I don’t know — but I should find out, since my first royalty-sharing titles as a narrator are all just passing out of contract. What I can say with certainty is that a) if the parties don’t specifically request that the agreement end, it rolls over for a new term of a year (and then a new term after that, and…) and b) even if the author decides to pull the title out of its ACX agreement, you still own your performance — they can’t sell it without your granting them the rights (however you and the rights holder choose to do that).

      Reply
  14. Aaron Lazar

    Hi, David! Such an interesting piece. Pretty shocking, really. I wonder how many aficionados are milking this situation… I loved how you narrated Lady Blues: forget-me-not. If you have time, shoot me an email. I made some good money this year on audiobooks through another website. (Audiobooks Unleashed)

    Reply
    • David Kudler

      Thanks so much, Aaron! I loved working on that book. :-D

      And I know that our friend Uvi Poznanski has used AU as well — as a promo site? I don’t know much else about it.

      Reply

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