Amazon is Quietly Working to Explode the Audiobook Market
Earlier this evening I was reading a post by a self-published author, Josh Lanyon. Josh was lamenting about his experience with creating audiobooks via ACX and his general dissatisfaction with the fact that Amazon controls the retail price.
In the post he complains that Amazon is bundling his self-published audiobooks with the Kindle edition of his ebooks and selling them cheap. As he sees it, Amazon is trying to encourage more readers to use Whispersync for Voice:
So…yeah. Cool. Not essential, but a fun little gimmick. I really never gave it a thought because whispersync is not something I particularly need or want or care about.
I should have given it a thought, though, because it creates a problem for ACX customers, and by ACX’s customers, I mean authors and narrators. I mean me. Amazon, in its perennial quest to crush all competition through loss leading, came up with the idea of encouraging readers to try out these whispersynced audio books by knocking the price of audio books down to $1.99 if the (current version) kindle ebook is also purchased.
Naturally Josh sees this as a significant loss of income. But as frustrating as this might be for Josh, there is a larger story here. You see, I double checked his claim, and in doing so I learned there is more to this story than Amazon simply offering discounts.
I went to Amazon, picked an author at random, and checked to see what prices Amazon asked for bundled ebooks and audiobooks.
In the case of Stephen King, the prices were all over the map. Some titles didn’t have a bundle price mentioned, but on the rest of titles the asking price for adding an audiobook to the purchase of a Kindle ebook varied considerably. The prices ranged from $4.95, $13.95, $17.95, and there was even one for 87 cents.
That’s a big difference from what Josh reported, isn’t it? Rather than simply offering a good deal to customers at the expense of authors, Amazon is charging a variety of prices.
It’s almost as if Amazon is trying to find a better price point for audiobooks.
That, folks, is a far more important detail than it might appear. Right now audiobooks are sold via subscriptions or at a rather high price – often higher than the price of the hardback edition. Everyone accepts that as the norm, but I think Amazon doesn’t.
Thanks to ACX, Amazon has made it relatively easy and inexpensive to produce an audiobook. In fact, the 20 grand that Josh reported having spent on the 12 audiobooks is actually less than it might cost to produce a dozen ebook editions (here’s why).
And now that the production cost and effort is minimized, I think Amazon is trying to find the price point where readers will buy the most audiobooks.
Remember how Amazon was famous for the $9.99 price point for ebooks? That’s the kind of price point that Amazon want to find for audiobooks.
Luckily, Amazon is in a unique position to do so.
Amazon inherited a controlling interest in the downloadable audiobook market when they bought Audible in early 2008. I don’t have data on market share but I have been told that Audible is the downloadable audiobook market.
Update: A friend tweeted that I really should offer more data on the market because there is more to the market than downloadable ebooks. This is true, but there is little public data. The AAP only reports figures for downloadable audiobooks (and not for example CD-based), and the data that the Audiobook Publishers of America has released is.
There’s little public data on Audible’s revenue, but the latest info from the AAP reveals that the US downloadable audiobook market was worth $87 million in 2012, and that it has seen an annual growth rate between 20% and 30% for the past several years.
Something tells me that a 20% to 30% increase isn’t good enough for Amazon, but I should think that should really come as no surprise.
Amazon has been doing their best to build the audiobook market for a couple years now, first by launching Audible Creation Exchange in May 2011 and then by launching Audible Author Services, which pays authors a dollar each time one of their audiobooks is sold, in April 2012.
Amazon’s investment in audiobooks is having incredible success in creating a larger supply of audiobooks to sell (a reported 10-fold increase in production). I expect that when Amazon does pick a new and lower price point, sales of the self-published audiobooks will go through the roof.