Friday, February 28, 2014

Sounding off about ACX (Is there an echo in here?)

This is not the post I planned to write today. I was going to blether on about the pleasures of writing in layers, but I'm distracted by the latest announcement from ACX/Audible/Amazon about cutting "royalties" for the audio books they sell. Basically royalties on any of my forthcoming audio works will drop a minimum of 10 - 11%. You can read the announcement here.

First of all, can we stop calling our percentage of these sales "royalties"? They are not royalties. We are financing and producing our own books and ACX/Audible/Amazon is our vendor. They are not our publisher and they are not paying advances and they are not fronting any of the costs nor supplying any support or help along the way. They are providing the sales channels for our work -- and establishing their own monopoly at the same time. So that's the first thing.

The second thing is...wow.

I do not understand why there is no viable alternative to ACX/Audible. WHY does no one come up with a viable alternative? ACX/Audible is not that far out in front. They are still vulnerable to a serious challenge. Why does no one challenge them? Audio books are a potential goldmine. This is one of the biggest publishing stories out there, an area of huge potential growth for all of us. But no. Nothing. Not a flicker on the horizon. (Okay, maybe a flicker from B&N, but now I can't even find the article, so it was probably more of a death twitch.)

You have to give Amazon credit because they have the vision and they have the drive to make these things happen -- and to make them happen easily (The Audio Creative Exchange is a BRILLIANT concept).

AND they have the rapacious greed.

ACX says: 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.

I mean, you do have to at least snicker at the outright in-your-face boldness. We're doing it because we now feel comfortable that we own the lion's share of the market. That's pretty much the message there.

As for the comment about traditional audiobook publishers? Traditional audiobook publishers FRONT THE COST OF THE AUDIOBOOK. So yes, it makes sense they don't pay as high "royalties."  I mean, it's one thing to rob us at gunpoint. Do you have to giggle maniacally in our face while you're doing it?

So what does this mean? I have readers asking me if it means no more audio books.

No. It doesn't mean that. Because ACX/Audible/Amazon has calculated correctly as usual. I understand that audio is a solid secondary revenue stream for me, and I understand that 40% is better than nothing (and so far nothing is the alternative), I understand that, so far, there is no viable alternative, and I understand that the audio market will continue to grow -- and that many of my readers love and appreciate these audio books.

I get it. So yes, I will continue to produce audio books through ACX/Audible/Amazon while hoping, praying, someone comes along with a real live viable alternative.

Here's the thing I want to communicate to my fellow ACXers though, because it only just occurred to me. When I commissioned my audio books, I did not think of asking all my narrators for copies of my files. The files are uploaded directly to ACX and I am betting that the vast majority of us don't ask for copies and don't give the original files another thought. But in seven years our contract with ACX expires and we are free to take the files elsewhere. Except if we don't have the files...

Yeah.

Now in seven years who knows. Seven years is a long time. Maybe we would want new narrators? Maybe the technology will have changed so much these audio files would be useless. But not having options is never a good thing.

 
  ****


Little update: There is a petition being circulated. It's narrator-centric -- I don't think most of us would agree that the boom in the audiobook industry is solely and strictly due to narrators -- but it gives an opportunity to voice your thoughts and share with ACX/Audible how their actions are perceived by their own customers. Please sign if you can.

51 comments:

  1. Wow....and not in a good way. Not being a writer I am having trouble wrapping the idea around my head that you, as the creator, the artist, only pull in 50% of the profit from the sale of your own creation...and that is, if I read this correctly, going to get 10% smaller? I understand the narrator is part of the equation, and I don't know how he gets paid, but this seems completely crazy to me. I have no suggestions, I'm sorry. But even galleries only take 40% on the sale of a work of art, and that is considered outrageous. Maybe you should paint? ;)

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    1. There are two methods of paying the narrator. A "royalty" split -- whereby the narrator invests time and perhaps money in the gamble that the audio book will sell. And paying the narrator up front, which is generally what I do. So many of the narrators don't really have a stake in this -- they've been paid for their work and they're onto the next project.

      The fascinating thing is ACX/Audible is actually operating like an old style publisher, which makes me hopeful that there will be a serious challenge to them. They are making the very mistakes that Amazon has managed to capitalize on with book publishing.

      Of course if there was no real competition, Amazon too would be making those mistakes. The difference is, many publishing entities are invested in book publishing, and will go to the mat with Amazon. Audio...people just don't recognize the potential of audio yet.

      ACX/Audible is already thinking like a fat and lazy corporation, so I do think a challenge is going to hit them from left field. But that could take some time. Maybe seven years...

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  2. 1. I'm seriously grateful to you Mr. Lanyon for pointing me to ACX in the first place. It lead to me finding the perfect narrator, and releasing two (so far) very popular audiobooks. I'm thrilled with that!

    2. I'm super pissed off at ACX, who provide some nice basic services and now appear to -- as you so well put it -- giggling at us while waving their monopoly gun around. Ugh.

    It makes me want to get some programming friends together and create an alternative service myself.

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    1. Thanks, John. I remain a firm believer in audio. But audio is an industry changing all the time. Not that long ago I was a subscriber to Books on Tape. This is where I think ACX/Audible is making their error. World dominance is a temporary thing. And I do believe that the only reason there isn't a significant challenge to ACX yet, is the possibilities of the field have not yet been recognized. All bets are off when they are, because ACX has done nothing --in fact, the opposite -- to breed loyalty.

      Again, the comparisons to legacy publishing are instant and obvious.

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  3. Oh, Josh...this is so awful. When I saw the statement yesterday I knew you would be making a comment. The part that sickens me is, "...as we continue our mission to accommodate more audiobook productions." How does that even make sense in light of what they are doing? As horrible as this is, the only bright spot I can see, at least you already had created many of your audio books before this new directive took effect.

    As for copies of your files—are you going to see whether they are still available from your narrators, or is that not important to you at this point?

    Like Karan, I wish I could offer suggestions, but without another vendor in sight... You always do a brilliant, professional job with these offerings, and it is a shame the way you are being treated.
    I'm glad you feel it still will be worth your while to continue producing additional audio books in the future. I just hope a viable solution appears for you in the very near future. Good luck, Josh.

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    1. Thank you, Susan. I probably will touch base with my narrators and see how many of those files I can get copies of. And moving forward, that will be part of my agreement with narrators.

      Seven years will pass pretty quick. I'm already on year three with some of these projects, so it's probably worth making an effort.

      The thing that does sting is it's not like any of us are getting rich from our audio books. It's another revenue stream, but I don't not make enormous profit from my investment last year. ACX, on the other hand, did.

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  4. Ouch. You've given me yet another reason to hate Amazon. I hope you manage to retrieve copies of your files from your terrific narrators.

    As for alternatives well the only one I know of is UK based and small scale. It's run by two ex-BBC radio producers so the quality of their stuff is, as you'd expect first class. They mostly produce non-fiction and out of print work http://www.crimsoncats.co.uk/content/4-about-us

    Maybe this offers a model for the future though?

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    1. I think so. I do see ACX/Audible vulnerable to an organized and serious challenge. The outright greed of this is fascinating given that this is such a new industry.

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  5. "I understand that 40% is better than nothing "

    Check your math. Narrators commenting in their own Facebook group are backing out of the so-called royalty-sharing model in droves, and for most authors, the 40% royalty produces a negative ROI on production costs. Nothing is always better than a loss.

    On top of that, if the ebook is Whispersync-compatible, you have no control over whether your audiobook price will be abruptly dropped to $1.99. Enjoy your $.80. Or $.40 if you dare do a non-exclusive with ACX.

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    1. I pay my narrators up front.

      And I am well aware of the whyspersynch situation. I was the first person to blog on it. :-D

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  6. Not to mention, the little dealings I had with ACX they were unresponsive and sort of bungling through things. Not terribly professional on many levels.

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    1. I know. Trying to get help from them is a joke.

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  7. Not to be too much of a party pooper, but unless you did the Per-Finished-Hour payment with your Narrator, they're still part owner of the audio files. That's why we get 1/2 the "royalties."

    If (after the seven years are up) you want to take audiobook elsewhere, I would HIGHLY encourage you work with your narrator to work something out (continue to pay them a portion or buy them out). Myself, I keep copies of all my audiobooks, including the raw masters (the first two Glen and Tyler books are three DVDs...each).

    Just my thoughts. I love working with JB and despite this payment setback, am looking forward to continue narrating audiobooks on ACX.

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    1. Thanks, Brian!

      And yeah, definitely want to continue working together, though I wish we had a better platform to use than ACX, if this is the direction they're taking things.

      Wow, 3 DVDs each? Damn!

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    2. Yes, of course I did the per-finished-hour payment. OF COURSE. Why is this so amazing? I believe in paying people and paying them fairly.

      (I even promote my narrators and refer them to other authors.)

      I have said from the beginning I thought the royalty share was a horrible idea for narrators. :-) In one case I did a royalty split with a production company eager to get projects going -- and we agreed that I would pay up front for the next project at a higher rate. Which is exactly what happened.

      And in another case I paid my narrator outright per-finished-hour AND I split the royalties on individual titles as an added bonus.

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    3. Awesome. I just wanted to clarify that part since, I think, most of the stuff on ACX is the royalty split.

      I didn't want people walking away with a wrong idea.

      Keep up the good work and paying those narrators.

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    4. I'm beginning to think you're right, as I watch these message boards. That's really unfortunate. This is a bad situation for both authors and narrators.

      In this case I believe narrators hold the power. They can cut the supply train by refusing to narrate for royalty share. That would probably stop 90% of authors from being able to produce their own audio books. And six months of that would quickly change the ACX/Audible dynamic.

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    5. I am a narrator with a few short titles produced through ACX, so far more as a hobby and portfolio building than a serious income stream. Perhaps the talent pool on ACX will consist only of amateurs like me if more experienced people desert!

      I believe it is incorrect that narrators "own" the work when royalties are split. They may have physical posession of files, of course, but the fine print of the contracts brokered by ACX still stipulate that producers retain no copyright.

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    6. "Own" may be the wrong term, but if you didn't pay your narrator outright, they get a say in where the audio goes. The same goes for photography or music.

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    7. Interesting. The ACX contract between author and narrator (and ACX) expires after 7 years. The idea being that after seven years of sharing royalties, the narrator has been paid in full. (Now whether it actually works out that way, who knows? Everybody is gambling in a royalty share.)

      I guess the contract could be challenged in court if the narrator felt he had been cheated somehow?

      It's just yet another reason why I prefer to pay narrators up front. It's less confusing for everyone.

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  8. Well, looks like Bezos has found a way to pay for his delivery drones. What a kick in the pants, but not surprising considering who you are dealing with.

    I quit selling on Amazon three years ago, but I did after market sales so it wasn't necessary to my livelihood.

    They are not to be trusted, that's for certain. I do wish BN would move into the market. I buy most of my hard copies through them. Sadly, Audible is the most comprehensive source around for audiobooks and until a viable challenger emerges, there is little to be done.

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    1. Here's the inevitable move by Amazon. Once they have crushed all competition -- or close enough that they feel comfortable -- they will change the royalty rate so that 70% is paid only on titles exclusive to them, and all others will receive 35%. And then eventually they will make it 35% across the board.

      Which is why competition is so crucial.

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  9. It's definitely not a royalty. It is a 60% (or more) fee that ACX is charging for a product Josh produced and paid for to have them host and upload for him.

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    1. Yes. I think we really need to get away from the idea that Amazon/Audible...really any of these entities are our "publishers." These are vendors. These are sales channel providers.

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  10. Wow. Thanks for posting this.

    What will this mean for your Carina titles? Will royalties be lowered on those audiobooks, too? Or is it just those books that individual authors publish through ACX?

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    1. That's a good question. Audible has a production deal with Carina, so they probably have some control, but Harlequin/Carina is one serious client. It's not like they couldn't successfully take their business elsewhere and strike a deal with Brilliance or another huge production company.

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  11. btw...hope you still plan to post about the pleasures of writing in layers. Would love to hear what you have to say about that...! :)

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  13. I've signed the petition.

    ACX's action looks very like an abuse of a dominant market position, which is illegal under European Community law. I suspect US anti-trust law also dislikes a monopoly imposing unfair terms. I do not suggest that individual authors or narrators could or should take legal action against ACX, but if there's enough fuss about it the competition authorities may start investigating. They've already taken action on ebook pricing.

    ACX should have just continued to rake in the money for doing very little, taking advantage of the recent dramatic increase in audiobook sales for which they and their partners are partly responsible. They might have stayed under the radar. But their greed may shine a spotlight just where they don't want one.

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    1. It does seem to be a bit of the old Killing-the-Goose-that-Lays-the Golden-Egg.

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  14. So sorry to hear all these, Josh, especially since we are partly the cause of the problem. Here’s some observation as an overseas reader.

    1. Amazon. I also detest the monopoly of Amazon. We overseas readers are more badly exploited as we sometimes have to pay more to buy the same items than US readers. (This is outright discrimination!) Also, many books are at lease $2 more expensively sold on Amazon than websites like AllRomance. But we do not have as much choice as the US readers do (books + shipping = very expensive), and convenience has its own price after all (only Amazon can deliver the book to our kindles within seconds). This, I cannot but tolerate, and I believe feeds to its monopoly status.

    2. Audible. As a subscriber to the Audible Gold Membership, I am entitled to a 30% off to all titles and buy expensive audible books with 1 credit (the equivalent of $14.95 or such). I have always been wondering who suffer from the price deduction - Audible or copy owners or both? If the cost is solely borne by Audible, I wouldn't say they did nothing to promote the work of their authors. (I'm not trying to defend them here. Actually, I've been 'forced' to buy some >30 hours Audible books which I may not really like just so I can get the most of the credits and so have decided to terminate the membership.) If both have to bear the cost, do copy owners get % share from Audible’s selling of membership? It’s only fair they should get some too, right? If only copy owners bear the cost, that’s robbery, IMO. Same apply to the ebook-audio-book tie-ins. Actually this is another reason why I’ve decided to cancel my audible membership. If I’ll just buy the ebooks anyway, and with that I only need to pay like $3.99 or less for the audio book, where can I use the credits? (FYI, I used my last credit on The Duckling Thrush, which I enjoyed enormously.) Here again, I have always wondered how audible books can gain any profit if they are sold at such low prices. Since the audio book market is ever growing, they can’t be all losing money, right? Do hope to be enlightened here.

    3. Competition. You know how you get lower-priced products? Import them from China! Ok, this is just a joke, of course, but accept it, globalization is the key to the future commerce. If Amazon exhausts its soil too quickly, there will be greener pasture elsewhere eventually for the herd to move on to. The question is just ‘when’.

    I do hope your petition can be heard and we readers can have more choices too.
    Cheers,
    Savanna

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    1. I have to laugh every time someone talks about Amazon as a champion of indie writers. It's like listening to the villagers destined to be eaten first by the dragon in those bad fantasy movies. HE'S OUR FRIEND. HE PROTECTS US FROM THE OGRES. :-D Amazon is about Amazon and ruling the world. PERIOD. And they will because they can. Because we will let them. Because in the short term they are making us money and validating us. But the big goal has never been about the indie author. It's about dominating publishing, and using the indie author to get there. We're watching it play out in the microcosm of ACX/Audible where there is no competition.

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  15. Oh, I meant 'copyright owners'. :p

    Maybe I shouldn't put this here, but anyway (:p) - just wanna say I agree totally with your comments on book covers. I like books with good covers, and I tend to avoid buying books with explicit covers. Living in a traditional community, I find it embarrassing to read books with explicit covers, no matter how good the books may be. Covers on Kindle paperwhite are easier to hide. I actually go to the extreme of deciding what to download on my Fire mainly based on the covers in case other people peek on them. So a big thank you, Josh, for most of your books have decent (:p) covers.

    Ok, I know this post doesn't belong here, so just ignore me.

    Cheers again,
    Savanna

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    1. I am SO TIRED of the male torso covers. Having said that, they do still seem to sell the most books. I guess for the same reason porny romance outsells non-porny romance. I just stick with what appeals to me, and hope that enough people have similar tastes so I can keep doing what I'm doing.

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  16. I signed the petition as well, I hope it makes an impact. I'm not sure who mentioned it but I now feel bad about my membership - I'd definitely pay more to support you guys.

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    1. I don't imagine that it will -- not to be downbeat, but there would have to be a huge outcry, and the truth is they're struggling to even hit the minimum number to send the petition.

      The truth is, there should have been kick back at the idea of splitting 50%, but if we're willing to split 50% for just having our titles listed, we're pretty much locked in.

      The narrators would have to stand together and refuse to work for a royalty share, and that won't happen because you have so many aspiring narrators who look at ACX as a stepping stone to serious gigs and serious money.

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  17. When I buy a book, no matter the format I expect for the author to get the lions share of the procedes. I hope look foward to listening to your books as much as I've enjoyed reading them. - Susan Rigby

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    1. You would think so, but that is a pretty new concept. And you have a lot of people and businesses entrenched in the old world of publishing who don't value the individual contribution so much as selling mass quantities of product.

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    2. Thank you, by the way for the kind words, Susan. I'm glad you've enjoyed the stories!

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  18. Hello Josh,
    As a fellow author and ACX user, I was equally upset by the recent announcement of this major royalty change, especially because I am half way done with recording my second audio book. This change in royalty scale will make a HUGE difference to us over the long run. The good news is, (and I gathered this info during several contacts with ACX over the past 2 days), if you place the titles which you plan to make into audio books "in production" status on the ACX site by midnight March 11th, 2014, you will lock-in the present escalating-royalty system for those titles.
    I did just that for the book I am currently recording. There's no way I could finish recording and editing by the March 12th deadline, but I wanted to lock-in the present royalty program. I record my own audio.
    So, my advice is, if you have titles in the works which you plan to place on Audible.com, E-sign the agreements for those titles right away.
    But let's face it. Even at the new 40% royalty, I believe this service is a blessing to have at our disposal. Because ACX is a member of the Amazon family of businesses, there really is no better alternative out there to market our work. We have exposure to a worldwide marketplace, with minimal effort on our part except to try and put up material that people want to listen to.
    Personally, I decided to narrate both of my books myself, because the first title, "The Constant Outsider: Memoirs of a South Boston Mechanic" is an autobiography, and the second title, "67 Cents: Creation of a Killer" is a fictional adaptation of that true story. Not being a professional voice artist is secondary I think, to hearing the actual author portray his or her own work. If you are paying artists to read your work, why not give it a try yourself? Also, the royalty benefits are substantial when narrating your own work.
    Thanks for bringing attention to this ACX royalty change. I thought I was the only one upset.
    Sincerely, Tom Cirignano
    TheConstantOutsider.com

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    1. Hi Tom,

      As upset as narrators are, I think in the end that split royalty will continue to be the way most books through ACX are produced. Nobody will be making money on them, but authors will view it as a means of finding new readers, and narrators will look at it as a stepping stone to better and bigger things.

      Paying for projects as I currently do is probably the least effective way because most projects will take forever to earn out, if they ever do.

      I think it's great when authors read their work, especially poetry or non-fiction or your kind of adapted memoirs. But for fiction, I am a firm believer in hiring a pro.

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    2. Thanks for the reply Josh. I've read your opinion of Amazon etc. Every situation is different I guess. Looking at what my books earn me on a per-sale basis, print version sales earn me one - two dollars each. Kindle and Audible sales easily double, and sometimes triple that per-book royalty when compared to print sales. I just can't find a reason to complain about that, so I won't.
      Best of luck in 2014.

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  19. I completely agree with your comments, Josh, and with that poster who said ACX/Audible seems to be abusing its market position under EU law, and wondering if the US too might have some anti-monopoly rules in place to challenge this situation.
    And that statement from ACX trying to 'justify' their sales policy is just insulting. To me too, it simply meant they are aware of their market dominant position and doing their best to exploit it the most.
    I was also thinking along the same lines as you, about how wrong the "royalty" label is in this case, and (even when seen from the POV of an outsider to the publishing industry like me) I would never call ACX/Audible a "publisher" but a mere sales/distribution channel. Unfortunately, like Amazon with Kindle, they also 'own' the audio file format they sell their products in, which poses an additional problem, as you say, unless a new player enters the market (BN? but they are not as global as Amazon... BN would need to step up their game and become a true international player, at least for ebooks and audiobooks, and maybe just remain US-based for print books).
    About that, I am a bit puzzled about your statement that you don't have your original audiobooks after the narrator has finished working on them. You mean, once you approve the final version of the audio file, you or the narrator upload it to ACX but ACX don't send you a copy (in the Audible format, the one that's sold), so you only the master file from the narrator, but that is not 'editable', marketable in an alternative format to Audible? It seems outrageous. You are the book copyright holder, hire the narrator, front all the production costs, supervise the production, quality control etc. AND you're not entitled to a free copy of the final product as it's sold?!

    I really hope the situation will evolve soon, with a few new players in this emerging market, and fairer terms especially for authors.

    All the best & thanks for keeping us up-to-date with these developments and making us aware of these shady practises.

    Paola

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    1. I have produced through ACX and I can tell you producers are indeed required to supply copies to authors (rights holders) if requested, that's in the ACX contracts.

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    2. It honestly never occurred to me to ask. If I thought about it at all, I thought...who knows what the situation will be in seven years? And to some extent, I still think that.

      But I also know that seven years ago I wasn't thinking of taking my own work back from publishers and republishing it myself, and that turned out to be one of the most lucrative decisions I ever made.

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  20. On the acx home page today at the bottom: "We have 3,951 titles open for auditions, 15,309 producers to choose from"

    Seems more like an authors' market than producers'.

    With such numbers, don't get your hopes up for organized resistance from the narrators. Though perhaps the best will desert and you will be left with a poorer talent pool.

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    1. The best narrators generally won't work for a royalty share. Just as the best authors don't underprice their work, the best narrators usually insist on being paid *something* for their time and effort.

      That certainly seems fair to me.

      But in the end, it may turn out that royalty sharing is the only viable alternative. I've blogged about this before. I invested something like 30Kish in audio book narration last year, and I made slightly over that. So I broke even, and this year those titles will continue to earn, but as they become whispersynched and promo priced...how *much* will they continue to earn? Not a lot.

      Possibly not enough to justify continuing to pay for production.

      Audio books have never been a big source of revenue for authors. The potential was there to change that, but ACX/Audible/Amazon have worked consistently to erode that possibility by focusing on dominating the audio market. They make money through bulk sales of product. So selling tons of product very cheaply is their best bet.

      And that is not always -- in fact, rarely -- going to be in the interests of the individual artist AKA content creator.

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    2. I would love to see some actual numbers from ACX. Like how much does the typical ACX author earn? How about the typical narrator? What's the spectrum? How many copies does the average self-pubbed audio book sell? There's an interesting and almost TOTAL lack of information there.

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  21. Hey Josh - Just signed the petition against ACX. What a bunch of economic thugs.

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