Why Audiobooks Are the Digital Book Format With the Most Growth Potential

The book publishing industry is prone to fads and obsessions. If it's not Pottermore and direct sales (2012), it's hybrid authors (2013), or book bundling, or subscription ebook services (2014), or coloring books (2015).

Many of these fads have come to naught, but the latest obsession - audiobooks - could prove to be the next explosively popular digital book format.

I know a lot of people have been saying that over the past year, but the data actually backs up the hype.

I was inspired to look into the topic when I read Joe Wikert's piece on audiobooks this weekend. As is his usual, Wikert offered no data to back up his assertions, but after I started digging into the topic, two glaring facts stood out.

  • The first is that audiobook market is small, but consistently growing year over year, and
  • The second is that audiobooks don't really cost a lot to produce.

Let's take those in order.

According to Publishers Lunch, AAP members earned $205.6 million in revenue from digital audiobooks in 2015 (the last year where we have complete data). This was up significantly from $148 million in revenue in 2014.

That's not the size of the market, of course, but instead is merely what 1,200 publishers are earning from their share of audiobook retail sales.

That $205.6 million is a relatively small number compared to the $1.4 billion those same publishers earned from ebooks in 2015, but the audiobook segment has also been consistently growing over the past few years, and the general consensus is that unless people run out of hours in the day there is no reason to expect the market to stop growing.

So what does it cost to tap into the next boom market?

Prices vary between production companies, and according to Quill & Quire they run anywhere from free (with royalties shared between narrator and author/publisher) up to around $20,000 - in Canada, where audiobook producers are as rare as hen's teeth.

At the low end there is ACX, which has an option for no upfront cost so long as the royalties are divided between the narrator and the author/publisher. This is only open to American (edit: and British) authors and publishers, alas.

Fortunately, ACX is not the only option; there are many audiobook production companies, and you can find price quotes from a number of audiobook producers with a simple search.

For example, in 2015 Marshall Davis estimated that his services cost around $1900 for an 80,000-word book, and Premium Audio quotes their fee as "£40 per thousand words", or about £3200 (nearly $4000) for that 80,000-word book.

That fee looks like a lot but let's not forget that the combined costs for the print and digital editions of a book could easily exceed $4000. Between developmental editing, cover design, formatting, and copyediting, a publisher or author could easily spend $10,000 (and it might be worth every penny).

While that $4,000 may be giving you sticker shock, it should be viewed as a one-time capital investment in a growing market.

And that leads to the question authors and publishers need to ask themselves: Is it worth the expense?

That will have to be answered on a case by case basis, and while you are pondering it, here is another point to consider:

How much should you charge for that audiobook?

Audiobooks cost about the same to produce as the ebook/print book, and yet they frequently sell for twice of three times the hardback price.

What might happen if a title's audio edition was priced at or below the price of the print or Kindle editions? Wouldn't that boost sales, and thus make the $4,000 a better investment?

Edit: As a reader pointed out, audiobooks sold through Audible are priced by Amazon, not the creators (thanks, mackay!). So the latter question is moot, but it raises another one: why does Amazon set audiobook retail prices so high? Wouldn't it be better to price audiobooks in line with ebooks?

image by ActuaLitté

About Nate Hoffelder (10619 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

12 Comments on Why Audiobooks Are the Digital Book Format With the Most Growth Potential

  1. As I understand it, ACX determines the price of your audio book, so you have no choice in that. That may actually not be such a bad thing, because Amazon is pretty savvy about pricing.

    I’m about to launch my first audio book, an adaption of my sci-fi novel. ACX handled everything nicely, including allowing me to audition narrators. I ended up paying $200 per finished hour for about $2,000 for an 80,000 page novel. (9 hours.) The narrator was wonderful, so I consider the money well spent. We’ll see if it pays for itself in the long run, but it was a very smooth and exciting experience to hear my work produced.

    • Whoops, you’re right. Thanks for pointing that out.

      • Audio books seem to be over priced by Amazon… except sometimes they are really cheap. Every now and then when I buy a book on sale for .99 cents or find it free, Amazon offers an audio book for $1.99. Even if I don’t want an audio version, at that price I find it impossible to resist. This is where I’m curious to see if Amazon knows what it’s doing. That is, giving the impression audio books are expensive, then luring customers into buying them on “sale” when their computer figures they will. This gets into some of the accusations (which I think were true) that Amazon charged some customers a lot more for stuff if they figured they would pay. Not so cricket, but if I could make some money off the system, I won’t yell.

  2. “Audiobooks cost about the same to produce as the ebook/print book, and yet they frequently sell for twice of three times the hardback price.”

    Audiobook prices need to factor in the length of the title and consequent costs of the narrator and studio time.

    A celebrity narrator is going to whack that price up.

    A door-stopper fantasy book is going to have many hours more narration time than a short story.

    My children’s short stories are sold on ACX at $4.74, a price Amazon sets. The same book as a CreateSpace paperback retails at $5.99, a price determined by the CreateSpace minimum for this title of $5.38.

    Curiously both print and audio outsell the $0.99 ebook – probably a function of the children’s market being so behind in ebook take-up.

  3. I have to think part of Amazon/Audible’s pricing strategy is that they want you to subscribe. A $50 audio book that you can get for around $10 (via a subscription) looks very appealing.
    There also seems to be a smaller percentage of pirated audio books available (compared to, say, music). That probably lets the prices stay higher.
    And finally audio books started out way more expensive (back when they were released on physical medium). Some of the pricing is just carryover from that.

  4. I am a book lover but audio books are just outside my paying power. Too expensive.

  5. Smart Debut Author // 15 February, 2017 at 5:54 pm // Reply

    The book publishing industry is prone to fads and obsessions. If it’s not Pottermore and direct sales, it’s hybrid authors, or book bundling, or subscription ebook services, or coloring books.

    Many of these fads have come to naught…

    The KindleUnlimited “subscription fad,” which is now paying $200M/yr to authors and still growing, might disagree. As might one or two of those high-selling hybrid authors. Or the indies whose self-published print coloring books stole the coloring book market out from under traditional publishers’ noses.

    But I agree with your general premise. Indies should be focusing on audio, too, now. It’s only going to grow.

  6. Smart Debut Author // 15 February, 2017 at 6:44 pm // Reply

    I think you undermined your own argument with the “came to naught” tangent you threw in, mainly for drama, it seems. And cherry-picking a couple incompetent business failures (Scribd, Oyster) as proof of subscription’s faddishness doesn’t actually bolster your argument that audiobooks really are a thing worthy of attention.

    You’re refuting a nonexistent counterargument.

    Nobody (that I’ve heard, anyway) thinks audiobooks aren’t going to keep growing fast. So that’s kind of a strawman you’re arguing against.

    Reporting on fake publishing controversies might be fun, but we can leave that to The New York Times. The facts are cool enough by themselves, without interpretive window dressing. 🙂

  7. There’s more to audio than audiobooks. I don’t do audiobooks because I have a lot of unread books, unwatched shows, etc, and I can read a book a lot faster than someone else can read it to me.

    However…

    One thing I really do enjoy is Big Finish’s audio stories, which are more like old radio shows, where you get an original drama with a cast, music, and sound effects. They do Doctor Who (and a variety of Doctor Who-related series), Blake’s 7, The Prisoner, and others, often with original cast members.

    These are new stories, not adaptations, so the only way to get the story is audio. Want Sheridan Smith as a companion to Paul McGann’s Eighth Doctor? Alex Kingston as River Song adventuring through time and encountering some of the earlier Doctors? Some new adventures for David Tennant’s Tenth Doctor and Catherine Tate’s Donna Noble?
    Great fun, and generally over in an hour or two.

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