In late February, ACX, Amazon’s audiobook division, changed its royalty rates, and I immediately wondered how the changes will affect indie authors. I have recently contracted with a narrator to produce the first Reed Ferguson mystery, This Doesn’t Happen In The Movies, and as I’ve read more about this move by ACX, I’ve wondered about how viable it will be for me to move into more audiobook creation.
Indie Authors – ACX Changes
ACX used to have royalty rates that started at 50% of sales, with the possibility of increasing to 90%, but now ACX offers a flat 40%, with no escalation. Now, this may sound great, but you have to keep in mind how many authors create ebooks. An author can choose to pay a narrator and/or producer to create an audiobook, and this can cost thousands of dollars. Or an author can choose a 50/50 split of profits with a narrator. This is the options I’ve chosen. So the new royalty rate means the narrator and I get 20% on every sale of my audiobook. This is getting into territory more like traditional publishing contracts…
And, many authors get the bulk of their sales from an ACX program which heavily discounts books cross-platform, with audiobook sales as low as $1.99. Now that 40% royalty split two ways is really low….
Indie Authors – The ACX Bounty Program
Another change to ACX is the bounty program. ACX pays a bonus for new customers who download your book first. The bonus payment used to be $25 per download, but it’s been upped to $50 (or from $12.50 to $25.00 on Royalty Share deals). A lot of authors, bestsellers certainly, make more from the bounty program than they do from their royalties. So this helps them. But what about others, who aren’t on the bestseller lists? Some, like Publishers Weekly, speculate that this will force indie authors into promoting their audiobooks more:
The move, Amazon said in the post, which takes effect March 12, 2014, will, in part, encourage authors to become more aggressive marketers.
Indie Authors – What Does This Mean For Ebooks?
It’s important to remember that ACX is an Amazon company. Remember Amazon, the company touted by so many as savior for indie authors? They’ve given us so much and isn’t it great and all? And it has been. But is Amazon showing its true colors? Amazon can and will change its royalty structures how they see fit. Never forget that Amazon is a business, and that they care about themselves, not indie authors. Will Amazon reduce the royalties for ebooks? Who knows? I can tell you this, if they do, it won’t surprise me…
Indie Authors – Uncertainty Leads To Distrust
This move leads to distrust in a company, in this case, not so much ACX, but Amazon. Don’t believe me? Here are some comments from big names in the indie publishing world:
Amazon is not your friend, author person.
Amazon is a giant corporation. It serves itself. You might think, It serves its customers, which is only true in that to serve itself it generally has to serve its customers. And this is entirely fine and normal. To reiterate: Amazon is not your friend. Its job is not to be your friend.
Personally, I’m shocked that Amazon would do anything to fuel the speculation that once they grow big enough, authors will suffer. Whatever margins they hope to improve by this 10% move can’t possibly be enough to cover the damage they’ve caused in public relations or the power they’ve granted to their detractors.
It really comes down to a question of trust. Trust is fragile, and requires a leap of faith when those required to trust are small, relatively helpless, and at the mercy of the large entity they trust. Trust is very hard to build, and extremely easy to lose. And once lost, it can never truly be recovered. It’s a sad day for a lot of reasons.
I’ve shelved my plans for audiobooks. What I thought was a great program now doesn’t seem worth the trouble.
I cannot see how I can justify more money thrown to ACX.
In my talks with my narrators, it’s clear this will hurt both sides of the creative package, narrators and authors.
Neither side, myself included as a writer, will have as much incentive to create new audio books.
This is a horrible move by ACX. Their rate structure already wasn’t setting the world on fire. Now they’ve made it downright unappealing. I especially enjoyed how they seem to think this crappy new rate structure will bring in new authors in droves.
I personally would like to thank Amazon and ACX for making me realize just what a fool I’ve been to put all my eggs in one place. My Select period is coming up and I won’t be enrolling any of my books in with Amazon again. Giving them exclusivity, despite all the benefits of borrows, etc, is just not worth putting your career in one mega giant’s hands. Diversify, people. Diversify, diversify, diversify.
Amazon is not our benefactor, our patron, or our friend. It is important to always stay aware of that. And it is important to always stay aware of how much power we give Amazon. If this change from Amazon today just bankrupted a couple of authors, or even made it suddenly difficult to pay their rent, then they were giving too much power to Amazon.
Hugh Howey has an interesting post on ACX, and take a look at this post by Jane Friedman. I took a sampling of these comments from those two posts. And I found very little positive in the rest of the comments. This doesn’t seem to bode well for ACX and Amazon, but the questions are: are they listening? and do they care?
It’s important to note, you are in control of your writing career, not Amazon, or any other company.
What are your thoughts on the ACX royalty changes?