Audiobooks are the fastest growing segment in publishing and everyone within the industry is very bullish about the future of the format. There are a number of new start-ups that are making waves and retailers are beginning to release that audiobooks are worth investing in.
The global audiobook industry is currently evaluated at 2.8 billion dollars and this is primarily due to the sheer amount of new titles that were produced in 2015. 43,000 new audiobooks were released this year, which is a slight increase from the 36,000 that came out in 2014 and a far cry from the 20,000 that were issued in 2013.
According to a recent report by the American Association of publishers downloaded audio had the highest growth in the first eight months of 2015. The number of audiobooks sold increased 43.3% in August, compared to August 2014. This brings the year-to-date growth for this format to 37.8%, compared to the same timeframe in 2014.
Since the industry is generating so much revenue many companies that specialize in statistics are beginning to pay attention. For the first time audiobook and audiobook subscription services are being tracked by Nielsen StatShot. 20 publishers proclaimed that the subscription model for audiobooks are actually proving to be more lucrative than e-Books. Approximately 3.88 million audiobooks were downloaded in 2015 compared to the 2.47 million eBooks that were read.
New Digital Distribution Models
Publishers are willing to experiment with different models for audiobook distribution because they don’t abide by the same agency model that applies to e-books. Companies like Blackstone Audio, Gildan Media, Hachette Audio, HarperAudio, and Naxos Audiobooks have all committed themselves to audiobook subscription services and bundling.
Scholastic is one company that has been at the forefront of embracing alternative distribution methods and are willing to take risks. The company currently has over 400 audiobook titles, which is an overall increase by 32% over 2014. One of the big reasons why their catalog has grown is because production costs have decreased by over 50% since 2009.The audio editions that have proven to be the most popular in 2015 were movie driven titles such as the Hunger Games and Goosebumps series.
Linda Lee, VP, Publisher Scholastic Audio told me that "The traditional audio customer will find your titles wherever you offer them, however, many of these non-traditional distribution models are targeted to the non-traditional audio user and/or customers who have never listened to an audiobook before. The hope is that through a subscription or bundling model, a non-audio user will be enticed to try and audio and become a convert. Additionally, these types of models offer the chance to ‘sample’ your product – I.e. Offering the first few titles in a series – hoping to hook the customer, who will then go to a more traditional full price model to find subsequent titles in the series once they are hooked. "
The Audiobook Subscription model
It is hard to have a conversation about companies involved in the unlimited audiobook space and not talk about Amazon. Their Kindle Unlimited platform features over 2,500 audiobooks, which is fairly paltry compared to their competition, but they have made it work.
Kindle Unlimited has only been available for a full year, but the company already commands the largest market share. A survey report from Peter Hildick-Smith's Codex Group confirmed they have more subscribers than any other company.
The report also showed that Amazon's subscriber base grew by 10% between November 2014 and April 2015, while the customer base of its smaller competitors fell by an average of 30% over the same period.
Scribd originally launched as a document sharing service almost a decade ago and was one of the first companies that got into the unlimited e-book subscription space. In 2014 the company got bullish about audiobooks and they ironed out an agreement with Findaway to include over 30,000 titles. They expanded their catalog in April of 2015 when they started dealing directly with major publishers.
VP of Content Acquisition Andrew Weinstein. said that in Scribd's first year of offering audiobooks, users logged more than 270,000 hours using the companies apps for Android and iOS.
The big problem with Scribd is that their audiobook program was too popular and it failed to generate a profit. This prompted them to pivot from unlimited listening plan to allowing their subscribers to access to a single audiobook title every month and if they wanted to listen to more, they had to pay extra.
"Our goal is to connect readers to books in a meaningful and sustainable way," said Andrew Weinstein in an exclusive interview with Good e-Reader. "We forged new ground when we created Scribd, and innovation often requires iteration. We made adjustments to our business model in order to ensure we could continue to deliver a great value to our subscribers and be a long-term partner to publishers."
"When we launched the Scribd subscription service, we were entering uncharted waters, and we bore the risk with the contract terms.Two years in, we’ve proven that there is true consumer demand for a reading subscription service. Likewise, we’ve shown that Scribd is a strong partner to publishers. We are open to future iterations of the model provided we reach terms with publishers that are both fair to their authors and Scribd." she said.
Playster is the newest entrant in the US market that has just launched a new unlimited service. Unlike their contemporaries they have numerous tiers that give you access to e-books or audiobooks, or you can sign up for their premium package and get access to everything. Their catalog currently features 250,000 e-Books, and more than 60,000 audiobooks.
The CEO of Playster Phil Keezer told Good e-Reader why his company got involved in audiobooks in the first place “Audiobooks were always appealing to us, but we were further buoyed by the fact other subscription services had begun to introduce credit systems for audiobooks. This provided an opportunity for us to give our members a better deal than they’d get elsewhere.” He went on to say “The popularity of audiobooks has seen a tremendous growth over the past couple of years, due to how great they are for multi-taskers. Audiobooks have become the soundtrack to people’s activities. In the past year it seems more and more books have been getting audiobook counterparts.
In order for audiobooks to grow further in 2016 Phil had some interesting thoughts “It would be great to see bigger name actors and narrators with larger followings – I think this will help audiobooks to grow further. Better production value will also help to blur the lines between audiobooks and other media types such as movies and music, which is hugely exciting. Audiobooks have the potential for great achievements within the next year, and it’s great that they’re already getting recognition through awards and accreditations.”
“New features could also make audiobooks more immersive. Synchronization between audiobooks and their e-book counterparts is one example that we’re already seeing, and in the future we could even have listeners choosing their own endings using spoken feedback. Audiobooks with animated qualities tend to be very successful, and while we don’t believe these bells and whistles are always necessary, they will certainly help to make the medium more powerful.”
Audiobooks.com does not have an unlimited subscription model but they have been in the business for a really long time. This has afforded them a unique prospective on the inner workings of the industry and recently GM Ian Small sat down with Good e-Reader for an exclusive interview. “I’m a big champion of the unlimited audiobook model. There are many stakeholders involved with audiobooks – Authors, narrators, publishers, customers, and retailers so it’s going to take some time (and obviously trial and error) to find a model that works for all parties involved. But it is becoming more commonplace for the consumer to enjoy their digital media in this capacity. There are perceptions of other industries that are currently using the “all you can eat” model and that it has not worked out favorably for all parties involved (see the music studios). So I understand the reluctance to completely dive in and deviate from existing retail models. It’s going to take some time and a little tweaking to get it right for audiobooks.”
Ian than alluded to his company’s future plans in the subscription audiobook space “We’re trying to find a model that can expand the market and lower the barrier for consumers to enjoy audiobooks while trying to avoid mistakes that have happened in other markets and their rights holders. It’s a learning process (albeit an expensive one) to figure out what doesn’t work, and then build on what does.”
I think the concept of subscription audiobooks will be slowly refined in 2016, companies like Findaway are looking to limit the amount of risk that retailers. I have heard they are going to be developing new tools and features that will monitor budgets and insure that companies will not spend more than they are financially able.
In this audiobook trends and analysis report I have made reference or will make reference to a company named Findaway. This is likely the largest company involved in the audiobook sector with a catalog of over 100,000 titles and they deal with over 200 publishers. They do not sell audio content directly to consumers, but they offer a powerful API system that retailers all over the world employ to sell audiobooks directly to users, your local library or non-conventional distribution models such as bundling or unlimited subscriptions. You might not heard of them, but their client list is very extensive. Findaway powers the collections of Scribd, Playster, BITLIT,
