A journalist requested an interview with me last week to talk about audiobook narration, my favorite topic. I asked her to send me a list of questions and offered to write out some answers for her.
I knew this wouldn’t be a typical interview when I saw 2 questions:
- How much money do you make?
- What do you use the money for?
I realized that she wanted to interview people with side jobs rather than full-time occupations. It turns out that she was writing a column named “Easy Money” and was surveying multiple ways to make money that are associated with books. Her editor had seen listings on Upwork.com where people are looking for audiobook narrators and thought this job would be a good one to add.
I told her that I didn’t want to be included in her story because audiobook narration and production are definitely NOT ways to earn easy money!
As you learned in this article, narration is not as easy as reading aloud. Authors who are new to audiobooks are often shocked at the cost of production.
Also, due to the dramatic growth of the audiobook industry, authors perceive that sales for audio editions are easily made without much or any effort. I therefore thought it would be good to write an article this week about 3 financial aspects of audiobook production so authors can have realistic expectations.
1. It might take years to show a profit.
First of all, understand that audiobooks are a long game. One author said on-line that she had “lost money” because she hadn’t recouped her costs of audiobook production within a year. I wanted to tell her that she needed to view it with this mindset: her money was not lost, but it was used for a capital investment in her business. Capital investments often take many years to pay out.
If you need instant gratification, must recoup your investment immediately, and/or don’t have funds to meet your living expenses, you should wait to produce your audiobook.
While you can and should do things to specifically market the audio edition, you still must market the BOOK in order for it to gain visibility and sales.
When I say the book must be marketed, I mean you have to expend more energy and (probably) money than just posting about your book on social media or changing the sales price. Simply tweeting about the book or even the audio edition of it won’t do much, if anything, to move the sales needle. Repeated tweets on the same subject don’t gain much attention and become part of the noise. And changing the price makes no difference if you don’t have a way to attract people to your sales page.
For every 10 ebooks you sell, you might sell one audiobook. Royalties are paid based on the revenue received from the purchase price, not the full retail price. You might earn $2-4 for each audiobook sold, so you can see it could take a while for the audiobook to start earning a profit.
2. Royalty Share contracts aren’t for everybody.
In breaking down the expenses for audiobook production, the narrator’s fee is usually the largest cost. To get around this obstacle, ACX.com allows audio rights holders to set up royalty share (RS) contracts with the narrator. The narrator isn’t paid anything up front. Her fee is deferred to her half of the royalties paid each month.
To an author, royalty share contracts look like free narration and an easy (there’s that word again) way to produce an audiobook.
To a narrator, though, a royalty share contract looks like the author doesn’t have confidence that her audiobook will sell enough copies to earn back the costs of production. The author makes money from all of the editions. The narrator only makes money from the audiobook and therefore is shouldering all of the risk for low or no sales on an RS contract.
One author was quite miffed with me when I said I could not accept her offer of royalty share plus $30 per finished hour because I would still be in the red for my editor’s fee and didn’t think I’d earn back my narration fee.
Before answering her, I had analyzed her Amazon sales rank and reviews for ALL of her books — not just the one she wanted to produce in audio. I told her that I wasn’t convinced she had sufficient selling power for me to take the risk of earning back my narration fee and the full cost of my editing. I told her I could do the book for my per finished hour rate or on a royalty share contract with a much higher author stipend.
She told me my rate was was misleading and that I had wasted her time. My ACX profile stated at the time that I was available for “royalty share or unspecified”, so I did not mislead anyone.
I can’t take every royalty share book I’m offered because it’s a serious commitment of my time and money to produce an audiobook. I must have some evidence that I can recoup my costs from the royalties. Otherwise, I couldn’t make enough money to sustain my business and/or might miss the opportunity to take work that pays up front.
Generally, a narrator would be able to earn her fee and expenses over time on an RS contract if one or more of these factors is true (the more, the better):
- You routinely sell 500 copies a month of the ebook.
- Your Amazon sales rank is less than 100,000 and preferably 50,000 or less. If it’s over 1 million, a narrator knows that the other editions aren’t selling frequently, so the audiobook couldn’t be expected to sell, either. Be sure to point us to your best-selling edition as I described in this article.
- Your book has an average rating of at least 4.0 with at least 50 recent 5-star ratings from genuine reviewers.
- The estimated finished time of your audiobook would be 6-9 hours, which means your manuscript has around 55,800 to 83,700 words. If the audiobook is shorter than 6 hours, Audible listeners might be reluctant to use a credit to buy it. Purchases made with Audible credits tend to reap the largest royalties. If it’s longer than 9 hours, even more copies must be sold before a narrator earns out her fee and expenses.
In other words, a narrator is most interested in a royalty share contract for those books that are selling or can be expected to sell consistently in other editions. However, in those cases, an author is best served by paying the narrator her rate (usually $200-400 per finished hour) and retaining all royalties. This article further discusses your options and the break-even point.
3. Money makes the world go round.
I read a comment in an on-line forum that stated many indie authors are struggling to meet their living expenses. The person continued by saying that an extra $4 means the world for some people. I gathered that struggling authors create royalty share contracts with the thought that whatever revenue they might get from an audiobook would be better than nothing.
While I can understand and even relate to the “hard times” mentality, I strongly advise against creating audiobooks only for the money. Loyal listeners appreciate audiobook narration as an art form. New listeners might never listen to another book if their first experience is negative. In both situations, a sub-standard product created for the money will negatively affect the industry as a whole.
After getting a divorce from my first husband, I worked 2 jobs in order to pay my expenses and start saving for the life I wanted. When I decided to take a voiceover workshop and produce a demo, I didn’t expect the teacher to invest his time in me because he thought I had potential. Instead, I sold all kinds of stuff on eBay in order to pay him for teaching me and producing my demo. I did the same thing when I wanted to buy a harp.
Rather than producing an audiobook prematurely and only for the money, consider doing the exercise described here to figure out other ways of acquiring money.
By looking at the big picture, paying for production, and earning sustenance funds through other means, authors can find that their audiobooks are a steady revenue stream. Over time, the capital investment will turn into pure profit. In the meantime, audiobooks bring an author’s work to new audiences and are more discoverable by new fans.
Is this the year you’re planning to create an audiobook? What questions do you have about the process? Please leave me a comment and let me know!