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Thursday, February 27, 2014

ACX - MONOPOLY - GREED


ACX, an Amazon owned site, was an excellent way to get your book done as an audiobook:

Until now, these royalties have been pretty generous: 

Creators who agreed to sell exclusively through Amazon and Audible got a rate of 50 to 90 percent, depending on the number of units sold.

Not anymore.

 “Effective for projects started on or after March 12, 2014, titles distributed exclusively to Audible, Amazon, and iTunes 

will earn a non-escalating 40% royalty paid to the Rights Holder (or, on Royalty Share deals, split equally between the Rights Holder and the Producer). "

BIG CHANGE, BAD CHANGE.

After March 12th, no producer will want to accept 20% WITH NO HOPE OF ESCALATING RATES.

A quality voice actor charges $3000 for the average book.  Say my audiobook (over which I have no say in its price) sells for $10.

I will have to sell 750 BOOKS to start making my first profit of FOUR DOLLARS.

BUT IT GETS BETTER:

ACX has this thing called WHISPERSYNC -- 

IF YOU BUY THE KINDLE BOOK, YOU CAN BUY THE AUDIOBOOK FOR $1.99!

So now, I have to SELL 3,750 COPIES OF MY AUDIOBOOK 

TO START MAKING MY 80 CENTS PER BOOK PROFIT!

Let's say I get a voice actor for $1000 -- I STILL HAVE TO SELL 1250 AUDIOBOOKS TO START MAKING A PROFIT.

 Why the change? 

According to ACX, “We are lowering the royalties as we continue our mission to accommodate more audiobook productions."

 How does lowering the incentive to produce audiobooks accommodate more productions? 

Obviously, it is about greed.  The robber barons did it.  

The orange growers during the real-life horrors of THE GRAPES OF WRATH did it. 

Wal-Mart drove the Mom-And-Pop stores under with low prices, only to raise them once the competition was gone.

 Profit is god to many.

ACX states: "Our royalties still remain well above those offered by traditional audiobook publishers.”

But traditional publishers PAY ALL THE PRODUCTION COSTS.

When you catch a monopoly putting a reverse spin on what it is doing, you know the white wash is to hide greed.

Sad.

ACX's stipend policy helped me to produce END OF DAYS.

Is it like the drug dealer giving you the first hit for free?  Is it all smoke and mirrors to get you hooked?  

There is a petition requesting ACX to reflect on its new policy of upping its percentage to 60%
without bringing anything new to the table:
 http://www.change.org/petitions/www-acx-com-reverse-changes-to-the-royalty-share-policy?recruiter=83935948&utm_campaign=signature_receipt&utm_medium=email&utm_source=share_petition 

What do you think of this?

9 comments:

  1. It's an old tried and true marketing ploy called 'loss leaders' or something similar.

    Entice, hook with the free or cheaper service or whatever, then once you're entangled, change the rules. . .

    Who can we trust with the rules always morphing into something different? What happened to operating on a fairness principle?

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  2. Money, money, money...
    You could sell them, just ask an immortal to do it for you. :-)

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  3. Donna:
    It is business: nothing personal, nothing moral, merely the quest for larger profits. Sigh. You're right: it sucks. :-)

    D.G.:
    The more frightening aspect is that ACX is just another face of Amazon, and there are rumbles that Amazon is testing the waters with this in advance of drastically lowering the royalty rates for its Kindle books through KDP which would affect us all.

    David:
    But who would buy them? Who wants a pet that bites the hand that feeds it? :-)

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    ReplyDelete
  5. That's a terrible change. It practically punishes authors for opting to go with them. What is this "incentive" they're talking about? Because I'm not seeing one.

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  6. It think in the long run it will affect the listeners too. Really, for the most part they don't know about the production and costs and who gets paid, how and how much.

    But this will stifle the flow of audiobooks. Maybe it was too fast or too many for the structure they had in place, to review and establish for listing. If there are fewer audiobooks, that won't matter because they will get a bigger percentage to make up the difference. Listeners will still buy, right?

    Maybe. Maybe not. A lot of smaller publishers and authors go out and market and encourage folks to give audiobooks try. With that incentive gone, there will be fewer people giving them a try.

    The bounty of 50 dollars, raised from 25 dollars sounds good, but the 25 dollars was paid on the first three books a new member to Audible purchased. Now it's just the first, so a net gain of 25 dollars for ACX. (this was not one of the terms mentioned in your post).

    Finally, you would make a small amount more with the whispersync, as you'd earn the royalty for the Kindle version, plus the royalty for the audiobook, but it's still far cry from what it would be otherwise.

    There are a number of smaller players out there in the audiobook field, but the way the nonexclusive is set up with ACX, it's meant to discourage that route.

    We'll see what happens. I have two audiobooks out, one was submitted as complete to ACX last week, and one is already contracted and in production. All of those will be grandfathered in. However, it is unlikely that my publisher will find the cash up front for any novels I might right (I have one slated for late spring or early summer). The talent for royalty share at the new rates, well, it'd be a shot in the dark luck to find really high talent. Royalty share was already a risk for the narrator. It's a bigger one now.

    Okay, long reply. Sorry.

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  7. Thanks, Damon.

    Elephant's Child:
    What you said! :-)

    J E:
    The doubling of the bounty for new customers who sign up for ACX is only for the first.

    For top-name authors, these bounties can add up to more than what they earn from royalties.

    Expanding the bounty program ensures that the rich will get richer while the self-published ACX authors hoping for more visibility will be left out in the cold.

    Rather than making up for the reduced royalty rate, the extra bounty adds insult to injury.

    ACX is pretty greedy. You pay for it all and they just host and hit send and for that, they take 60% of the money.

    Seems odd and almost as if now that their inventory has enough titles so that they have some variety for Audible, they are restructuring to allow for courting of big names

    while demanding that any Indie pay big fees at the door to sit in the gallery and watch the princes eat their dinner.

    Terry:
    I didn't want to mention the bounty in my post so as not to confuse my readers with another set of figures. The lowering of the royalty rate and removing the chance of escalation was greedy enough on their part! Ouch.

    The authors will not be able to afford quality voice actors, so the quality of the audiobooks will suffer.

    Amazon, in doing this, is floating a trial balloon to see if they can cut back to a 35% royalty for Kindle books as they had before Apple provided competition for them. Now that B&N is crushed, Amazon obviously is feeling its oats.

    I sell my books usually for $1.99 which means I make .70 a book so if someone buys the Kindle book and the $1.99 (for which I receive .80) audiobook, I will still have to sell 2,000 kindle/audio's before I make back my $3000. Having to sell 2,000 books before I break even is ludricrous.

    I am trying to get three of my books in under the wire of March 12th.

    Amazon is shedding its nice-guy persona and showing itself to be the cyber Wal-Mart, crushing all for the sake of a few dollars more.

    Where's Clint Eastwood's Man With No Name when you need him?! :-)

    Thanks for such an insightful reply!

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