Last updated 4/10/25

 

I received an email this week from a narrator who is considering making an offer to license the audio rights of a book. They asked me what an industry-standard offer would be.

It seems like a simple question, but it doesn’t have a simple answer.

In 2008 when I first wrote about licensing audio rights, audiobooks were not the mainstream entertainment and hot commodity that they have become. Most books were not produced in audio at that time. A literary agent suggested to me back then that an advance of $1000 might seal the deal.

Even though audio licensing deals are routine these days, an “industry-standard” offer for audio rights still doesn’t exist. It really depends on the skill of the negotiator, the book, the rights holder’s approach, and any competing offers.

As a narrator hoping to persuade a rights holder that you should record their book, you have 3 options to suggest and negotiate with the audio rights holder:

1. Per Finished Hour (PFH)
2. Royalty Share (RS)
3. Licensing

You must be clear which option you are pursuing and the outcome that you want to achieve BEFORE you contact the rights holder!

PFH

With a Per Finished Hour (PFH) rate, the audio rights holder is simply another client who pays you to narrate — and possibly produce, as on ACX — the finished audiobook. Your payment, responsibilities, and involvement with the audiobook end once you submit the recordings and are paid for the agreed-upon work.

Royalty Share

Pros:

• You don’t incur the upfront cost of an advance.
• Your risk for low or no sales can be mitigated if the rights holder will pay some or all of your production costs, e.g., with a Royalty Share+ contract on ACX.
• The rights holder has a vested interest in marketing the audiobook, which is not saying that they actually will do any marketing, though. If they use ACX, they would supply the cover art.

Cons:

• If you perform the work through ACX, the rights holder would own your audio after 7 years and could re-use and -sell it without any further compensation to you unless you negotiate a buy-out before the 7-year term ends.

Licensing

Pros:

• You own the copyright to your audio and your actual recordings forever.
• You can negotiate the licensing agreement to automatically extend each year unless either party chooses to cancel it.
• You have the potential to make the most money over time. You would not pay any royalties until any advance that you paid the rights holder earns out.

Cons:

• You have greater up-front expense if you must pay an advance, which means it will take longer to recoup costs and start showing a profit.
• An advance exacerbates your risk for low or no audiobook sales.
• You as the publisher are responsible for choosing the audiobook’s distribution, as well as providing the cover and all marketing of the audiobook.
• You must account for the sales and royalties due the rights holder every 6-12 months, depending on the terms of your agreement. You may wish to hire an accountant to perform these tasks, especially if you license more than one title.
• The rights holder might shop the book around to other potential producers once you’ve shown interest in it.

 

Licensing Considerations

Once you decide you want to license the audio rights, the first thing you need to do before approaching a rights holder is figure out how you expect to distribute the audiobook. You’ll want to include that information in your offer. The RH will want to see that you have a solid distribution plan so they have a greater comfort level in your ability to get the audiobook to market.

Next, you need to determine what your top amount for an advance would be. An advance means you pay money upfront on the royalties you expect to earn. You’re advancing the RH the percentage they’re entitled to earn on each sale. You then wouldn’t pay the RH any additional royalties until you have recouped the advance in your royalties from sales.

The higher the advance, the more copies of the audiobook you must sell in order to earn back that money and enjoy a profit.

I would not make my first offer be my best, only offer. For instance, if I was willing to pay an advance up to $1,000, I would start with an offer of much less, say from $0 to $250. I would adjust my offer based on the response received from the rights holder.

I’d want to pay a low percentage of royalties. I’d offer from 15-25% of the royalties I earn to be paid to the rights holder once any advance earns out.

Jessica Kaye noted in the APA webinar mentioned in the Resources below that 25% is a common royalty payment.

A few days after publishing this article, I read in a Facebook group for authors that Tantor offered an author a $1000 advance and 25% royalties. Audio publishers may be competing with you for audio rights to the same book.

I would also ask for usage of the same cover art and to have a licensing term as long as possible — at least 10 years. You may discover that the rights holder may not own the rights to the cover art, in which case you would need to supply your own.

You may adjust your offer more than once as you negotiate the details with the rights holder.

 

Other resources on this topic:

• If you’re interested in learning more detailed info about licensing audio rights, I hosted a webinar with IP attorney and Grammy-winning audiobook director Jessica Kaye. The 1.5-hour recording, transcript, and sample licensing contract are available on my Shop page. Jessica’s #1 rule about licensing negotiations bears repeating here: never fall so in love with a project that you can’t walk away from it.
• Members of the Audio Publishers Association can view the 9/15/21 webinar Audiobook Rights and How They Are Changing by logging in to the APA site, then clicking Resources, then Webinars. The speakers gave pointers for estimating a book’s revenue.
• Members of my NarratorsRoadmap.com site have access to my exclusive Audiobook Distributors Comparison Chart, which compares 6 popular distributors across 22 criteria.

 

Image: Negotiate by Nick Youngson CC BY-SA 3.0 Pix4free.org