Authors, Can You Afford to Produce an Audiobook?

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

audiobooks, authors, books, indie authorsOne of the first questions that indie authors and small- to mid-size publishers ask me about audiobook production is, “How much does it cost?”

My answer is always, “It depends.”

Producing an audiobook is like building a house: your choices dictate your final cost. Each recording is custom-made rather than mass-produced. When people contact me about narrating and producing their audiobook for them, I always want to educate them about the time and skills necessary for a polished production. However, most people want me to simply cut to the chase and give them a firm number.

Before I can even give a ballpark estimate on a custom quote, though, I point out, “You can have the finished audiobook fast, good, or cheap. Pick any two.”

Since no dollar figure can apply to all circumstances, the more useful questions for authors might be:

1. How much do I need to pay up front?
2. What are the long-term costs?
3. If I pay up front, how long will it take to recoup my investment?

While other production sites and models are available, I’ll use Audible’s Audiobook Creation Exchange for this discussion, since it’s practically the only way for an author to produce an audiobook with a professional narrator and have no up-front costs. ACX also is a completely free service to both authors and narrators. Finally, in my research, I have not found a company that will pay a higher royalty rate than the 40 percent offered by Audible.

Traditionally, publishers have paid narrators, sound engineers and proof listeners on a per finished hour (PFH) basis. However, studio time may be charged in real hours.

The general rule of thumb is that at least 6.2 hours of time are required to produce that one finished hour. The 6.2 hours covers the recording, editing, proofing and mastering needed to create the retail-ready product.

An audiobook that runs 10 hours, therefore, generally would require at least 62 hours to complete—and possibly many more, depending on its complexity.

Given the number of people involved and the studio rental costs, you’ll often see traditional production quotes of $5,000 or more, depending on the length of the book.

On ACX, the narrator is also the producer who is responsible for all phases of production. Most narrators on ACX have created a home recording studio and do not charge a separate fee for its use. The narrator may do her own editing, proofing and mastering, or hire someone to do those tasks.

Now that you have a little background, let’s look at each question individually.

1. How much do I need to pay up front?

If you want to pay nothing up front, you could post your book on ACX under a royalty share (RS) contract. Many authors think of this type of production as “free,” but it’s really a deferred payment in which the costs of production are repaid to the narrator over time through the royalties paid by Audible. Choosing this option means:

  • You must choose exclusive distribution with Audible, which includes Amazon and iTunes in its reach. You won’t be able to sell your audiobook on any other website—including your own—you won’t be able to sell it on CD, and it won’t be available to libraries.
  • You will split the royalties paid by Audible 50-50 with the narrator for the seven-year distribution period. Under the current terms, each of you would earn 20 percent of the royalties paid in that timeframe.

The author earns royalties from all editions of her work, but the RS narrator only gets paid when the audiobook sells. Therefore, the RS narrator is taking ALL of the risk for low or no sales of the audiobook.

She also has to consider her up-front costs: she must pay her editor and proofer at the time service is rendered. Since a narrator could easily stay in the red for quite a long time on an RS project, most experienced narrators are reluctant or may even refuse to consider an RS contract.

Alternately, you could decide to pay the production costs up front by hiring a narrator on a PFH contract, which is a buy-out option that lets the author retain all royalties. This choice is especially attractive when your ebook routinely sells 1,000 or more copies a month.

Experienced narrators charge between $200 and $400 per finished hour. For instance, at $200 PFH, a narrator would send a $2,000 invoice for complete production of a 10-hour audiobook.

By the way, if you want to select non-exclusive distribution with Audible, you must choose a PFH contract.

2. What are the long-term costs?

Although an RS contract initially seems ideal to authors, many indie authors get frustrated with it over time for several reasons:

  • Most narrators who work on RS projects understandably schedule those titles after work that pays up front. The audiobook might take longer to produce as a result.
  • Production and/or acting quality could be lower with inexperienced narrators, which might lead to bad reviews and lower sales of the audiobook.
  • Under exclusive distribution, the author incurs the hidden opportunity costs of unavailable options, like back-of-the-room sales.
  • The author earns only half of the available royalties for seven years.

On the other hand, a PFH contract has no long-term costs. The author pays once for the production, retains all royalties and has the freedom of choice in distribution options.

3. If I pay up front, how long will it take to recoup my investment?

Audible pays monthly royalties based on the amount it received for each unit sold, not the title’s purchase price. Audible member credits are worth about $10 each and account for the most sales. Other factors such as special sales and currency exchange rates affect the proceeds.

Generally, for a 10-hour book, Audible pays about $4 in royalties per unit sold. The author keeps the entire royalty amount on a PFH contract. On an RS contract, the author can expect to earn only half of the available royalties, or around $2 per audiobook sold.

In our earlier example of the $200 PFH contract, the author pays $2,000 for production costs of a 10-hour audiobook. After selling only an estimated 500 units of the audiobook, the author would break even from the royalty payments. From that point forward, all remaining audiobook sales would generate pure profit of around $4 in royalties paid per unit sold.

Many authors get quite excited when they realize that it may not take long to break even on a PFH contract and then earn double the profit they would have had in an RS contract!

A final useful question for authors who are thinking about audiobook production is:

With the increasing number of devoted audiobook listeners and press coverage about the audiobook industry, can you afford to not produce audiobooks of your titles?


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25 thoughts on “Authors, Can You Afford to Produce an Audiobook?

  1. Michael W. Perry

    Quote: “You will split the royalties paid by Audible 50-50 with the narrator for the seven-year distribution period. Under the current terms, each of you would earn 20 percent of the royalties paid in that timeframe.”

    With Amazon, always take the time to do the math. In this case that means that the author and narrator are doing all the work and taking on all the risk, but each only getting 20% of the retail price. Amazon, which is taking no risk and doing nothing but a credit card transaction and file download—total cost in the pennies—is pocketing full 60% of that retail price. Even the old nineteenth-century robber barons didn’t have it that good. They invested substantially in their railroads and steel mills.

    I can never understand why so many authors fail to calculate just what Amazon is paying them and use that to guide their marketing. For ebooks, Apple pays 70% at all retail prices and charges no download fee. In contrast, Amazon pays half as much, meaning only 35% of retail outside the narrow $2.99-9.99 window. Inside that window it charges a grossly inflated “download fee” that’s ten times what Amazon Web Services users pay. Yet many authors gush about Amazon and fail to make a sensible business decision to steer as many of their readers as possible to Apple and other ebook retailers, all of whom pay better than Amazon at all price levels.

    It might be worthwhile to encourage Smashwords to sell, along with all their other versions, author-supplied audiobooks. Then the author and narrator could pocket up to 40% each, doubling their income per sale. Audible needs competition to force it to pay more than that pitiful 20%. Smashwords could also distribute audiobooks to libraries, if author so choose. For many authors, that’d get their books wider exposure.

    Some of the websites that distribute public-doman audiobooks (i.e. Librivox and Loyal Books), might want to look into retailing author-supplied audiobooks. They already have to software tools to distribute them and the apps to play them. This would give them additional income.

    Know any lawyers who like class action? This one could pay really big. For ebooks and audiobooks, someone needs to take on Amazon’s ‘most favored’ contract clause. Authors should be able to price their ebooks and audiobooks to get the same income from all retail sales. Where authors get half as much per sale as the market rate—as with many Kindle ebooks—authors should be able to set their retail price twice as high.

    That means that a $12.99 nursing textbook on the iBookstore would be priced at $25.99 at Amazon. That’s only fair, since the author/publisher income on both would be the same—just over $9. Something similar would be true for audiobooks.

    Reply
    1. Karen Commins

      Hi, Michael. Thanks for your comment.

      It’s true that Audible retains 60% of the royalties on exclusive distribution deals and 75% on non-exclusive distribution deals through ACX.

      However, those royalties are not all profit. I formerly worked in information technology positions and can only imagine the tremendous costs associated with building, improving, and maintaining Audible’s infrastructure.

      Cordially,
      Karen Commins

      Reply
  2. Karen Myers

    AuthorsRepublic will distribute audiobooks to all the main retailer/distributors, including Audible, for a very reasonable cut.

    You can do your own narration, with a bit of initiative and a decent voice and use a professional music studio to do all the engineering and file production.

    Result: $100/finished hour, for a 14.5 hour audiobook, and quite reasonable quality. And no one requires an exclusive contract. Sample here: http://hollowlands.com/books/the-hounds-of-annwn/to-carry-the-horn/

    That’s still not cheap, but unit sales required to recoup are far fewer than in your example.

    Reply
    1. Karen Commins

      Hi, Karen! Congratulations on producing and narrating your audiobook!

      I used ACX for my example because it allows authors to collaborate with a professional narrator and pay no upfront costs.

      ACX may have been the first way for indie authors to produce audiobooks, but authors now have a growing number of options for audiobook production. The costs, royalty rates, and distribution channels can vary widely.

      I hope to compare some of these companies in a future article.

      Thanks for the comment, and best wishes for your success!

      Cordially,
      Karen Commins

      Reply
  3. Dan

    You might bear in mind that I for one stop reading when I see “she” and “her” as the author and narrator. Since I am male, I understand that language to exclude me.

    Reply
  4. Daniel Minor

    Dan wrote: “You might bear in mind that I for one stop reading when I see “she” and “her” as the author and narrator. Since I am male, I understand that language to exclude me.”

    Dan would prefer that the author, who is female, use “he” and “him”, thereby excluding herself so that he can feel included.

    Writing as another bearer of the same fine name, I would ask that all readers ignore Dan and continue to use whatever pronouns he/she/it/they feel comfortable with.

    Reply
    1. Carole

      Really?? After decades of “he” as the standard? You actually become so offended you cannot continue reading to gain valuable information?

      Reply
  5. Samyann

    I’ve provided an audiobook version of my book, and paid the narrator up front. My primary reason for doing so was that I’m a new author and RS would be unfair to the narrator … simply put, they wouldn’t make any money with RS. And, I’ve been proven correct. Even though I’m fortunate enough to have good reviews, I’m still a newbie and sales reflect this fact.

    That said, sales, insignificant as they are, have confirmed for me that audiobook production is an absolute must today. At least 1/3 of my sales are the audiobook format.

    Reply
    1. Karen Commins

      Hello, Samyann! I’m happy to read you’ve produced an audiobook. Congratulations!

      I believe that what we put out in the world comes back to us, in a way and time that we didn’t expect.

      Because you found a way to pay your narrator, I am convinced the Universe will find a way to not only repay your investment, but create profits from your audiobook sales.

      As you write more books and build your fan base, I would expect sales of all of your editions to grow. Most books still aren’t in audiobook format, so you’re already ahead of the game by creating your audiobook edition.

      Thanks for your comment, and best wishes for your success!

      Cordially,
      Karen Commins

      Reply
  6. Kathryn Guare

    I think this gives a misleading idea about what it takes to recoup the investment via the ACX model. Certainly for authors selling 1,000 units a month in print/ebooks, it won’t be an issue because they are already visible and doing well, so they will likely do well with the audio sales as well, but it will take far more than 500 units moved to break even. That’s because ACX breaks sales into 3 categories:
    AL = Audible member listener sales using their credit – you get the royalty based on the full retail price of the book, which is indeed typically $4-$5
    ALOP = Audible member listener purchasing instead of using credit – the royalty on this is far less because the price they are paying is discounted, often to a price as low as $1.99, so you are making about $0.90 on that sale
    ALC = A non-Audible member sale. Theoretically this would mean a royalty on the full retail price, but quite often what you are getting are non-Audible members who have purchased the e-book first, and then are getting the Whispersync/audiobook feature at the discounted price of, again, around $1.99. So again, you get about $0.90.
    In my experience so far, the sales volume (units moved) are skewed more to the ALOP and ALC (Whispersync) categories, so 500 units moved does not translate into anything close to $2,500, unless you are employing some kind of advertising/promotional strategy to get Audible listeners to spend their credits on your book.

    Reply
  7. Karen Commins

    Hi, Kathryn! Thank you for sharing your experiences with ACX in this thoughtful comment.

    I appreciate your confirmation that units sold through Audible member credits do equate to $4 or so in royalties.

    You raise a valid point about the lower royalties paid on Whispersync sales and are absolutely correct in saying that the break-even point could be further delayed as a result of them.

    Aside from the royalties — and further complicating this discussion — ACX pays a $50 bounty to entice new listeners to sign up for membership (see https://www.acx.com/help/50-bounty-program-terms-and-conditions/201462580). Many authors are heavily promoting their audiobook editions and earning numerous bounty payments, which offset the lower royalties paid from Whispersync sales.

    Given the mixture of royalties earned across the 3 categories of purchasers and possible bounty payments, it’s impossible to determine an exact break-even number of sales or the amount of time that would pass before those sales have occurred.

    However, authors who paid the costs of production up front would always earn the full royalty and bounty payments available. Once the break-even date occurs, all of those payments are pure profit.

    Congratulations on your audiobook! You chose a terrific narrator, and I predict you will be VERY well pleased by your long-term sales!

    Cordially,
    Karen Commins

    Reply
  8. Kate Canterbary

    After extensive research, I see the ACX options as the all-around worst for indie authors. Organizations like ListenUp! offer royalties as high as 70% and require about the same up front costs. Working with an independent producer and then distributing via organizations such as Blackstone Audio/Downpour also yields royalties higher than ACX and come with the benefit of extensive library distribution plus physical distribution (CDs). Knowing that ACX has serious limitations (i.e., if one’s book is dual POV, it’s complicated to manage narrator agreements as ACX only currently allows for contracting with a single narrator. One must find a narration team, or a narrator who routinely outsources part of the narration and is reliable enough to ensure the other party does get paid), I would only choose ACX if it were the only production avenue.

    Reply
    1. Karen Commins

      Hi, Kate. Thanks for the comment. Authors who are willing to pay for production costs have many choices and should do their research to find the best fit for their requirements.

      Best wishes for your success!

      Cordially,
      Karen Commins

      Reply
        1. Karen Commins

          Hi, Vic! You’ll find a game plan and lots of advice in answer to that question in my blog article titled “How to Become An Audiobook Narrator”. When I posted the link to it here, the message apparently sets off the spam filter.

          Best wishes for your success!

          Cordially,
          Karen Commins

          Reply
  9. Andrew Updegrove

    Karen, thanks for the very informative article. I’m intrigued about what the extra 5.2 hours are in addition to the hour that makes its way into the final audiobook. Is that all reading the book, narrating it, and retakes of sections that the narrator doesn’t think are good enough, or are there other tasks involved that I’m not thinking of? Also, I’m curious what the role of an editor is in creating an audiobook? I assume the proofer presumably listens to the recording while listening to the recording, which presumably the narrator could do herself.

    Thanks in advance for your answers.

    Reply
    1. Karen Commins

      Hi, Andrew! Thanks for the good question.

      In general, the break-down for the 6.2 hours to produce 1 finished hour starts the moment the narrator begins recording as follows:

      — 2 hours for the narrator to record the text, which includes stops and re-takes due to stumbles, stomach growls, different acting choices, etc.

      — 3 hours to edit and master the recordings by listening to every second to remove mouth noises, adjust pacing by adding or subtracting pauses, and create a consistent, pleasing volume and sound for the whole book. The editor must seamlessly add narrator “pick-ups” (explained below) into the original recordings before doing the final steps to master them.

      — 1.2 hours to proof-listen to every word and notate mistakes (transpositions, wrong character voices, mispronunciations, etc.) that must be re-recorded. These corrections are known as pick-ups. The narrator records the pick-ups and sends them to the editor to replace those sections in the original audio.

      However, the 6.2 hours is only a general rule of thumb about studio time. The time needed to produce an audiobook is longer when we add in the narrator’s preparatory tasks.

      Before the narrator ever walks in the booth, he must read the ENTIRE book to get a sense of the author’s style, understand the material and decide how to present it, and research any pronunciations he does not know. Some fiction narrators also determine their character voices before entering the studio, while others take that step organically during the recording process.

      The narrator may edit and proof his own recordings although this practice is discouraged. If you made a mistake when recording, you may not recognize that you made a mistake while editing and proofing. Also, a narrator’s performance and technical skills and abilities are usually not closely matched. You want as many ears as possible to listen to the audiobook before it’s released in order to create the best possible production.

      I hope this info is helpful.

      Cordially,
      Karen Commins

      Reply
  10. Nancy J. Cohen

    I would like more info on the marketing angle. It seems to me that authors who sell 500 copies so easily are already bestsellers. What about midlist authors trying to break into the audiobook markets? There are some online review sites and audiobook bloggers, but how else can we reach the listeners and get word out there?

    Reply
  11. Felicity Jones

    My science fiction romance writer friends, John Blandly, “The Volunteers,” “Lightman,” and Icy Rivers, “Sochi Wild Dogs”, tell me they found producing audiobooks time consuming, but not expensive. I feel that time will tell, but these writers have found the experience rewarding.

    Reply
    1. Karen Commins

      Hi, Felicity! I’m glad to learn your friends are pleased they have created audiobooks of their titles. Most authors will find that having their work in audio is rewarding for a variety of reasons, especially these:

      1. Their work is easier to discover as fewer audiobooks exist than are available in print and ebook in the same genre.

      2. Audiobooks put authors in a more prestigious light. Until recently, only about 5% of books were made into audiobooks. The perception still exists that an author who has audiobooks must be in the upper echelon of the profession.

      3. Audiobooks are a multi-tasker’s best friend. Even people who don’t read the print or ebook editions will listen to books while doing other things.

      4. The audiobook edition is another revenue stream for the author. If the author retains his audio rights and produces the audiobook, he earns royalties on every sale of the audiobook edition!

      Thanks again for your comment!

      Cordially,
      Karen Commins

      Reply

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