As an audiobook creator or consumer, understanding the financial landscape between Audible and Libro.fm is crucial for making informed decisions about where to publish or purchase audiobooks. This comprehensive guide breaks down the royalty structures, exclusive deals, and long-term implications for authors, narrators, and the entire publishing ecosystem.
- Audible offers 25-40% royalties through ACX but requires exclusivity for higher rates
- Libro.fm provides competitive royalties while supporting independent bookstores
- Audible Exclusives prevent libraries and independent retailers from accessing content
- Spotify’s acquisition of Findaway Voices has created new challenges for creators
- Understanding the long-term implications of platform choice is essential for sustainable income
- Market Dominance: 63.4% – Audible’s current market share in the US audiobook market
- Catalog Size: 600,000+ – Audiobooks available on both Audible and Libro.fm
- Exclusive Impact: 99% – of bestsellers available on Libro.fm despite Audible Exclusives
- Royalty Difference: 15-20% – Lower royalties on ACX for non-exclusive distribution
The Royalty Breakdown: Audible’s Complex Payment Structure
Audible’s royalty system through ACX (Audiobook Creation Exchange) presents creators with a critical choice: higher royalties through exclusivity or broader distribution with lower compensation. The platform offers two primary royalty options:
- Exclusive Distribution: 40% royalty rate but restricts sales to Audible, Amazon, and iTunes only
- Non-Exclusive Distribution: 25% royalty rate with freedom to distribute through other platforms
- Audible Plus Catalog: Variable payments based on listening time rather than direct sales
Many creators initially choose the exclusive option for the higher royalty rate, but this decision comes with significant consequences. As noted in Libro.fm’s analysis, “ACX promises higher royalties to creators if they opt for Exclusive distribution. If a creator wants to distribute their audiobook to other audiobook platforms or libraries, they will earn 15% to 20% less of retail sales from ACX.”
Libro.fm’s Creator-Focused Approach
Libro.fm takes a fundamentally different approach to audiobook distribution and creator compensation. As a Social Purpose Corporation and employee-owned company, their mission centers on supporting independent bookstores while providing fair compensation to creators.
While Libro.fm doesn’t publicly disclose exact royalty percentages, their commitment to fair compensation is evident in their business practices. Unlike Audible’s complex tiered system, Libro.fm offers straightforward royalty arrangements that don’t require exclusivity clauses that limit distribution opportunities.
The Hidden Costs of Audible Exclusives
Audible’s exclusive licensing model has far-reaching implications beyond just royalty percentages. When creators choose Audible Exclusives, they’re effectively removing their content from:
- Public Libraries: Audible Exclusives cannot be purchased or distributed by libraries
- Independent Bookstores: Local retailers lose access to popular titles
- Educational Institutions: Schools and universities cannot acquire these audiobooks
- Alternative Platforms: Competitors like Libro.fm, Spotify Audiobooks, and others are blocked
This restriction has particularly severe consequences for accessibility. As highlighted in competitor analysis, “Audiobooks are also a vital means of access for some readers with disabilities: due to disabilities, some people need audiobooks to read. People with disabilities are more likely to be underemployed/unemployed, thus they rely on the library for access to audiobooks.”
- Popular titles like “Born a Crime” and “Handmaid’s Tale” become inaccessible to library patrons
- Independent bookstores miss sales during crucial release windows
- Readers with disabilities face additional barriers to accessing content
- Creators sacrifice long-term discoverability for short-term royalty gains
Beyond Royalties: Additional Creator Considerations
Royalty percentages represent only one aspect of the financial equation for audiobook creators. Several other factors significantly impact overall earnings and career sustainability:
Distribution Timelines and Market Availability
Audible’s approval process can be notoriously slow, as evidenced by Gergely Orosz’s experience with “The Software Engineer’s Guidebook”: “Audible’s unusually slow approval process means my audiobook isn’t even available on Amazon’s platform, yet. I submitted the book to Audible at the same time as I did for every other platform… they can take up to 10 weeks to approve new books.”
This delay means lost sales opportunities during crucial launch periods when marketing efforts are most concentrated and consumer interest is highest.
Platform Stability and Contract Changes
The recent acquisition of Findaway Voices by Spotify demonstrates how quickly platform terms can change. As detailed in competitor analysis, Spotify’s new terms initially included language that would allow them to “create derivative works of your IP… royalty-free… and they get to keep the right to do that forever.”
While the terms were revised after creator backlash, the incident highlights the risks of platform dependency and the importance of understanding long-term contract implications.
Case Study: The Practical Engineer’s Platform Dilemma
Gergely Orosz’s experience publishing “The Software Engineer’s Guidebook” provides valuable insights into the real-world tradeoffs between platforms. Despite Audible’s market dominance (63.4% US market share), Orosz initially resisted publishing on the platform due to concerns about monopolistic practices.
His survey of potential buyers revealed Audible’s overwhelming dominance in consumer preference, ultimately compelling him to distribute through the platform despite his reservations. However, the extended approval timeline meant missing crucial sales opportunities during his book’s launch window.
- Audible: 63.4% market share demonstrates strong consumer preference
- Spotify Audiobooks: Emerging competitor with growing listener base
- Libro.fm: Niche but dedicated audience supporting independent bookstores
- Direct Sales: Higher per-unit profit but requires significant marketing investment
Strategic Recommendations for Creators
Based on comprehensive analysis of both platforms and industry trends, here are strategic recommendations for audiobook creators:
- Start Non-Exclusive: Begin with broad distribution to build audience across multiple platforms
- Evaluate Performance: Monitor sales data across platforms for 3-6 months before considering exclusivity
- Consider Library Sales: Remember that Audible Exclusives eliminate library distribution opportunities
- Negotiate Better Terms: Established creators may negotiate improved royalty rates outside standard ACX terms
- Diversify Revenue: Combine platform sales with direct sales through services like Gumroad
The Ethical Dimension: Supporting a Healthy Publishing Ecosystem
Beyond pure financial considerations, creators must weigh the ethical implications of their platform choices. Audible’s exclusive practices have drawn criticism for their impact on libraries and independent bookstores.
As Libro.fm’s analysis notes, “There are audiobooks being published that bookshops cannot sell, and libraries cannot lend. This hurts bookshops because they are consistently missing out on sales for big releases. When they aren’t able to sell audiobooks that are in high demand, potential customers will opt for Audible over their local bookshop.”
This dynamic creates a feedback loop where Audible’s dominance grows, further strengthening their negotiating position and ability to secure additional exclusives.
Q: Should I choose Audible exclusivity for the higher royalty rate?
A: While the 40% exclusive royalty is attractive, consider the long-term implications. Exclusivity limits your audience reach, eliminates library sales, and prevents distribution through independent bookstores. For many creators, the broader distribution of non-exclusive arrangements generates comparable or better overall revenue.
Q: How does Libro.fm’s royalty structure compare to Audible’s?
A: Libro.fm doesn’t publicly disclose exact royalty percentages, but their model prioritizes fair compensation while supporting independent bookstores. Unlike Audible, they don’t require exclusivity for better rates, allowing creators to distribute widely while still earning competitive royalties.
Q: What about newer platforms like Spotify Audiobooks?
A: Spotify’s entry into the audiobook market provides additional distribution opportunities, though their acquisition of Findaway Voices has raised concerns about contract terms