When Audible founder Don Katz launched the Audiobook Creation Exchange (ACX) platform in May 2011, he said one of the main goals was to help increase the number of audiobooks released into the market. With its third anniversary just around the corner, ACX has fulfilled that objective, and the company sees more growth ahead. Offering a nutshell description of the platform, Jason Ojalvo, Audible content senior v-p and head of ACX, says, “We’re a matchmaker for audio rights holders [authors, agents, publishers] and audio producers [narrators and studio professionals]. They can connect on this platform to make more audiobooks.”
At launch, ACX had roughly 1,000 titles, and in the following year “things really took off,” says Ojalvo. Author Neil Gaiman was an early supporter, partnering with Audible on his own ACX label, Neil Gaiman Presents, for which he selects and produces audio titles. To help ACX gain traction, Audible started the Audible Author Services program in 2012, which, for each audiobook purchased through Audible.com, Audible.co.uk, and iTunes, gave the author of the title in question $1. The company created a $20 million fund for the incentive plan, intended to encourage authors to promote themselves and their work via social media, and to make use of ACX. Audible wound down the Author Services program in June 2013, saying that the incentives had served their purpose.
More than 10,000 ACX titles were produced in 2013, and, according to Ojalvo, the platform is on track to surpass that number and become the largest content provider to Audible in 2014. (To date, there are more than 16,000 ACX audiobooks on sale at Audible, Amazon, and iTunes.) The increase in the number of audiobooks has helped meet the demand of Audible’s customers for more titles on the site. As Ojalvo explains, “Our customers have a voracious appetite for audio. Members, on average, download about 17 books a year. And the truth is that [in the traditional publishing model] a very limited number of audiobooks get made.” He adds, “Publishers, agents, and authors are sitting on lots of audio rights, and ACX offers them a way to exploit those and get more titles out there.”
Ojalvo characterizes ACX rights holders as “a healthy mix of authors and publishers,” including print publishers who use the platform to put dozens of titles in the system and start an audio line. He points to success stories from traditionally published authors who regained previously unexploited audio rights from their publishers, and from prolific self-published authors, including Hugh Howey, who has said that he could live off his ACX earnings alone. As more and more authors get into the DIY spirit, ACX offers another sales avenue to pursue.
The ACX platform allows rights holders and producers to decide how they’d like to work together: they can opt for either a pay-for-production deal or a royalty-share deal, which requires no money to be paid up front, and which allows the two sides to split the proceeds, 50-50. Royalty rates are higher for parties who opt to give Audible exclusive distribution rights (through Audible, Amazon, and iTunes). The royalty rate was initially an escalating scale starting at 50% and going up to 90%, but the current rate, instituted Mar. 12, 2014, is a nonescalating 40% for titles distributed exclusively by Audible, and 25% for nonexclusive deals. When it updated the rates, ACX also changed its bounty and production stipend incentive programs to be more generous. According to Matthew Thornton, senior director of communications at Audible and ACX, the shift to focus on bounty and stipend bonus payments, rather than royalties, was “the right way to apportion our investments,” and it provides “self-reliant indie authors,” who are already successful at creating awareness, an opportunity to be comarketers in finding new listeners.
The changes, not surprisingly, were met with complaints from some ACX users. Author and ACX user Josh Lanyon stirred a lively discussion on his blog about the lower rates, asking, “Why does no one come up with a viable alternative?” He went on to say that he will continue to produce audiobooks through ACX and Audible, even as he hopes and prays for a competitor to come along that he can work with.
It’s too early to know if ACX’s new payment structure will have any negative effect on the number of platform users. For now, Ojalvo and other team members continue to spread the word about ACX’s success and its potential, by encouraging author and narrator self-promotion, especially via social media, and by appearing at various voice-actor events and book and author conferences. As Thornton notes, “ACX is still young and still a grand experiment, so the spirit of experimentation and innovation informs all of our efforts.”