Publishers Move to Cash In On Digital Audiobook Boom

Impressive growth in the digital audiobook category has become the new normal for publishers. After several years of solid increases, recently released industry data shows that digital downloads again racked up great numbers in 2015. The AAP’s StatShot report tracking publishers’ trade revenue last year found that downloaded adult audiobook sales were up 38.9% in 2015 over 2014. And according to the Audio Publishers Association’s annual sales survey, which includes information provided by 20 member publishers, sales of digital downloads increased 34% in both dollars and units in 2015.

How has this upward trend affected audio publishers’ strategies? For starters, publishers unanimously say they are producing more titles. At Penguin Random House Audio, senior v-p and publisher Amanda D’Acierno notes that her division’s title count is increasing “about 10% each year,” and she expects to release more than 800 titles in 2016. HarperAudio is seeing similar growth, “close to 10% in the past 12 months,” according to associate publisher Sean McManus. For Recorded Books, which includes the Tantor and HighBridge divisions, chief content officer Troy Juliar reports that “we’re up about 400 titles year over year across the Recorded Books companies.”

In 2015, Samantha Edelson, marketing director at Macmillan Audio, says her company produced 28% more titles than the previous year, and that the total number of titles is expected to rise in 2016 as well. The picture is also upbeat for Scholastic Audio. “We have more than doubled our overall publishing plan, with over 75% of the titles we publish now being published as digital-only titles,” says Linda Lee, v-p of Scholastic Audio and Weston Woods Studios, and current president of the Audio Publishers Association. “This is quite an uptick from 2012 when we first started publishing digital-only titles. At that time less than 15% of the titles we were publishing were in the digital-only format.”

Chris Lynch, president and publisher of Simon & Schuster Audio, notes that the growing numbers mean looking anew at ways to meet demand. “We continue to expand the number of titles. As the business grows overall, and more people are listening to audio, there might now be an audience for a book that would justify us doing a digital audio when we might not have done it even two years ago.”

With this ability to create larger lists, publishers across the board are generating new releases from a variety of sources. “We’re going deeper into the [front] list and we’re also going into our backlist,” Lynch says. As an example, he mentions The Making of the Atomic Bomb, Richard Rhodes’s classic history title, released as a digital download in February. “It would have been long and expensive to do on CD,” he notes, “but it has done particularly well for us [as a digital release].” Lynch says that the additional leeway in the number of productions is encouraging some reconsideration of titles. “Things we passed on when our list was tighter—we’ve been able to bring some of those authors back in, like Jodi Picoult, and we just did The House of the Spirits by Isabel Allende, which had never been on audio.” Some prolific bestselling authors are picking up additional traction in digital audio, too. “Stephen King’s backlist has been a real boon,” Lynch says. “Some had never been done on audio before.”

Several publishers noted that digital audio expansion affords them an opportunity to focus more attention on certain types of titles. “It’s allowed us to expand the number of titles we publish, particularly in genres that do especially well for us, like science fiction and fantasy,” Edelson says. Similarly, McManus says, “Science fiction and paranormal have been great areas of growth with digital audio” for HarperAudio. Looking across the industry (as well as closer to home), APA executive director Michele Cobb, who is also publisher of Insatiable Press, which specializes in erotica and romance audiobooks, says, “Erotica is obviously a genre that has burgeoned with the growth of digital.”

Branching out beyond traditional print content, McManus believes that “original audio content is something that a lot of publishers are looking into with digital booming.” On May 6, HarperAudio announced the winner of a radio-drama contest they hosted in partnership with the Goldberg Department of Dramatic Writing at NYU. As the grand-prize winner, Jyotsna Hariharan, a graduate student in the dramatic-writing M.F.A. program, will see her play, Rebuttal, published as an unabridged multi-voice audio production this fall.

Self-published books, a significant component of Audible’s ACX platform, which enables authors, narrators, and studio professionals to find one another and produce digital audiobooks, are helping to fuel audio growth at the company. “We are seeing our biggest increase in ACX titles,” says Audible publisher Beth Anderson. “In 2014, rights holders and narrators teamed up to produce 13,600 titles, 20,000 in 2015, and we’re on track for 30,000 in 2016.” Outside of ACX, Anderson notes, Audible is experimenting with different types of content, such as the audio edition of the graphic novel Locke & Key and original programs in its Channels service, which is a collection of short-form audio content including news, comedy, and ad-free podcasts available free to Audible subscribers.

Publishing more audio titles means securing more audio rights. Synergy plays a role and can certainly be an advantage for the audio divisions at the Big Five publishing houses, where very often the plan is to keep audio rights to print books in-house. Of course, that has long been the case, with publishers ideally being able to piggyback marketing and publicity strategies under one roof. But the drive to produce in-house material has intensified. “Every house is keeping its rights,” Lynch says. “The value of rights is higher than a few years ago.” Among the advantages authors using the same publisher to do both print and audio is an integrated marketing plan, Lynch notes. The situation is similar at Macmillan Audio. “We think it’s critical to have audio rights to the books Macmillan publishes,” Edelson says. “This allows the publisher to have a full marketing campaign that integrates and sells all the formats for a given title.” And McManus concurs: “Audio rights are becoming much more competitive, and we believe strongly that exploiting audio rights alongside the print edition is crucial to an overall publication success story.”

However, independent companies are expanding their lists, too, and are on the hunt for rights with everybody else. Blackstone Audio said that its launch of Blackstone Publishing, an imprint for print and e-books, was indeed sparked by this issue. “With the explosion of audio—which has resulted in great sales for us—there is just one problem with that core business: rights,” says Josh Stanton, Blackstone CEO and president. “This move [into print and e-books] allows us to position ourselves a little better, so that we can go to literary agents and compete for all rights out of the box.” Tantor Media, acquired by Recorded Books in January 2015, made a similar move into print books in 2012 (and e-books in 2011).

At Recorded Books, Juliar is confident that his company’s experience can be a big factor in the bid for rights. “We have a very good message about why to publish with Recorded Books—from our long-standing reputation as a quality producer to our direct selling in institutional channels to our global footprint,” he says. “Rights are competitive, but there is a long line of quality authors who know our unique capabilities and want to bring their rights to us.” And, according to Lynch, it would likely be impossible for the larger houses to publish every print title as an audio, so there are rights available to outside publishers. “As much as we are expanding our list, there are still some titles we don’t publish in-house,” he says.

Though the picture of a hot market prevails, audio publishers are not upping digital output without careful consideration of the format. Scholastic has begun to increase the number of YA titles on its list, “because they do best in the digital market,” Lee says. D’Acierno notes: “We’re able to publish more titles with greater niche appeal since we don’t have to meet physical production minimums. The digital audio audience and physical audio audience also differ—we strategically publish titles into each channel based on demand.”

To D’Acierno’s point, all the publishers PW spoke with noted that they remain flexible on issues of format, as they must weigh which titles will have the best success in digital audio, and which may perform better as physical audio—still an important part of the market. “Physical is still a very viable business,” McManus says. He speaks for many colleagues when he describes what has essentially become a best practice industry-wide. “HarperCollins still focuses on physical sales, and we have put in place agreements with print-on-demand partners to make sure that any ‘digital-only’ title is available to anyone who wants to listen to it via physical CD.”

As Juliar explains it, “The P&Ls for titles have shifted over time as the blend between physical and digital goods has changed—but that has been happening for years,” he says. “There are some titles that perform uniquely in physical or digital formats, or uniquely in libraries versus consumer markets, so it is important to estimate that blend as accurately as possible. The revenue per unit hasn’t changed all that much in the shift to digital, so it affects the financials a little less than you might think, though costs are certainly different when running a digital business versus a hard-goods business.”

In this digital audio heyday, the number of titles being produced is a plus, but not the only one. D’Acierno points out that “one of the biggest benefits of digital production is that we now measure our turnaround time from casting to recording a title to bringing it to market in a matter of days, not weeks,” she says. “That allows us to be incredibly nimble in responding to trends and breakout bestsellers.”

Most publishers agree that, at its core, marketing digital audio is not very different from marketing physical audio, with a goal of promoting titles and authors (and narrators). But Cobb notes, “The social media opportunities to introduce potential listeners to a new title or a snippet of a title have helped us reach a wider audience.” And according to Edelson, that kind of reach in the digital segment has led her team to add “even more direct-to-consumer marketing.”

Looking ahead, the picture is bright for not only digital audio, but for the entire industry. As reflected in the APA survey, audiobook sales in 2015 were up 20.7% over 2014 and totaled more than $1.77 billion. “Audio is having its moment, and has been for the last couple of years,” Lynch says. “I don’t believe people are forsaking books for audio, but people are discovering audio,” he says on what the future holds. “Because of the popularity of smartphones, there is an audio player in everyone’s pocket. Listening to a CD or a digital download is not much different. But there is a big difference between reading on a screen and on the printed page.”

As Edelson puts it, “Even with [the audio industry’s] amazing growth, the number of people who listen to audiobooks is still a relatively small percent of the book buying market, which indicates that there is still a lot of potential out there. With widespread technology and people leading ever-busier lives, I think we will see more and more consumers add audiobooks to their reading habits.”

And according to Cobb, it’s important to build on the industry’s positive trends, and the APA continues apace with its efforts to raise awareness of the medium. To that end, she says, the APA is working on a major marketing campaign for June, which is Audiobook Month, encouraging publishers, authors, narrators, and listeners to share their enthusiasm via the hashtag #loveaudiobooks.

Audiobook Titles Published, 2011–2015

Source: Audio Publishers Association.