Audiblegate: the house always wins, promo code corruption - Isobel Starling
Authors and narrators who are familiar with the earning reports from ACX.com know they are the digital equivalent of looking into the fires of Mount Doom. Each month we stare at our reports and wonder how the hell the Audible Finance Team came to these calculations. They are one of many long-running issues yet to be resolved, no matter the ACX ‘promise’ of a sparkly new dashboard. Even a multi-billion-dollar company employing the best tech nerds in the world cannot seem to put their ducks in a row when it comes to telling authors and narrators how many audiobooks we’ve sold, and how much we are earning each month—with transparency.
With this in mind, I’ve put off updating my audiobook earnings spreadsheets for the past eighteen months because no migraine medication can prevent the headache they induce. But, I recently bit the bullet and crunched my numbers. While doing so, I remembered a few things concerning audiobook promotional codes, a perk which when it came down to it, bled Audible of millions of dollars to ensure that Audible kept their monopoly – harvesting both indie author content and listeners with their delicious membership dollars.
PERKS AND PROMOTIONAL CODES
I began my journey with audiobooks in 2017, and in 2021, I now have twenty-seven audiobooks for sale. When I published my first audiobook, Audible gave authors twenty-five promotional codes per title. They monetized the codes and counted them, once redeemed, as sales. Authors and narrators gave a handful of codes to bloggers and reviewers, and everyone was happy. The system worked fine, or so we thought!
Listeners who were given codes realized there was a flaw in the promotional code system. They discovered codes could be redeemed for ANY book, not necessarily the book for which the author gave the code. Or they could listen to the free book, review it, and then return the book for a credit and get a new book. Audible ended up paying TWICE for promo codes, sometimes more if a listener did this multiple times.
Upon discovering this flaw in the system, any sensible business brain would have said “We’ll make the promotional codes book-specific so listeners cannot abuse them.” In April 2019, Audible did exactly this. They closed the loophole and made codes book specific. However, for reasons that will become clearer later, they also increased the number of monetized promotional codes to 100 per territory, per title.
This created a tremendous incentive, so authors and narrators aggressively distributed the codes to earn payment for 200 sales as quickly as possible. Listeners suddenly had hundreds of free audiobooks ‘for review’ on offer and Audible benefited from blanket advertising.
The financial perspective of the change to codes is quite an eye opener! If an average sale of a 5–10-hour audiobook earned three dollars in royalties, every new title with its automatic 100 US and 100 UK codes could earn a minimum of $600 by distributing promotional codes, more if the title was a vast 25-hour fantasy tome.
THE HOUSE ALWAYS WINS!
The availability of promotional codes in such large quantities shook up the audiobook market in subtle ways to benefit Audible:
Codes for free audiobooks brought new listeners to Audible. To redeem a code, a listener needed an Audible or Amazon account. If they didn’t have one, to access the free audiobook they need simply create an account and register their credit card and address details. New listeners were offered a list of incentives—free books, three months for half price, etc., and unlimited returns—few would decline.
The availability of millions of codes created a voracious listenership.
The possibility of an instant $600 profit with zero financial outlay encouraged many inexperienced authors new to audiobook production to seek royalty share deals with narrators. Narrators who were seeking work in a rapidly booming market accepted the work, regardless of the quality of the book.
The lure of an instant $600 income led to a phenomenon known as ‘code farming.’ The short story of code farming is one of nefarious ‘rights holders’ or marketing companies who would set up several hundred sock-puppet accounts on Audible. They’d then create dozens of short books and distribute the codes to these faux accounts for redemption, thus making A LOT of money quickly. For example, create 100 short story audiobooks, distribute codes to 200 sock-puppet accounts, and make $60,000.
EVERYONE WINS! YES?
Narrators booked loads of work, authors produced audiobooks and made instant income, listeners received free audiobooks, and Audible saw increased site traffic and memberships.
But no, all was not as rosy as it seemed. The 200 monetized code-perk was a scammer’s delight. Books under three hours flooded the Audible store with all kinds of wacky titles: ‘101 ways to tie your shoelaces’, ‘How to get rich quick selling Speedos’, etc. All fake titles, but you get my meaning. They plagiarize some content, while some were stolen from larger books and chopped into smaller audiobooks. The ways scammer ‘rights holders’ created audiobooks to access profit from the codes were many.
Audible/ACX saw a surge of traffic through listeners’ code redemption, and authors benefited from instant income and an increase in reviews. However, giving free money in return for content was an incredibly short-sighted and damaging decision on Audible’s part. The doors flew open for anyone to record a short audiobook, upload it to ACX and, through distributing codes, earn $600 for a few hours’ work.
Remember, too, availability of the codes was only to Audible-exclusive books, and the sales revenue for these giveaways was 40% for exclusive or split between author and narrator for royalty share at 20% each. How did Audible pay themselves 60% to 75% of the sale when no financial transaction occurred? The promotional codes perk had to be a massive financial drain for Audible and in the long run, proved to be unsustainable.
Why would a company throw away millions of dollars like this?
Why would they knowingly give bags of money to authors and narrators?
Why would they pay easily spotted criminals who uploaded fraudulent titles?
The evidence of abuse of Audible perks is all over the internet—from websites created by code farmers to distribute ‘free audiobooks,’ to ‘How To—‘ entrepreneurial videos on YouTube describing schemes to get-rich-quick by moving into audiobooks.
LONG TERM PLANS
There may be several good reasons Audible increased the number of codes gifted to authors and accepted the losses generated:
Audible’s long-term plan appears to be one of moving to a library offering. They have trialed this with programs such as the Romance Package, Audible Escape, Audible Global Reach, and Audible Plus.
Their business model isn’t, as most believe, one of selling audiobooks, but aims at creating subscriptions, just like Amazon’s Prime Membership. They now own the lion’s share of the world audiobook market; some suggest up to 90%. All this was achieved by taking massive losses which would bankrupt any of their competitors.
Once a reader joined to access a free book delivered by the code, Audible could market membership perks to them that no competitor could match.
In March 2020, Audible may have reached their limit for losses or they’d achieved their market goal. They announced that all codes given after 26th March 2020 would no longer pay revenue. Authors and narrators began dumping their pre-March audiobook codes by the thousands to a feeding frenzy of happy audiobook listeners—listeners incentivized to visit Audible to redeem and enjoy those codes. Audible benefited from ending monetization of codes with increased traffic and new sign-ups. The house always wins!
While crunching my numbers, I realized that from 2017 until October 2020, when the ‘glitch’ revealed the extent of ‘returns’ losses, my ‘true’ sales had been disguised by not only a missing ‘returns’ column, but by promo code ‘sales.’
Since there has never been a separate column for promo codes and, despite Audible’s promises, there is still no column on the dashboard or in the reports, authors have no way of differentiating a sale via a code against sales via a monthly membership ‘credit’ or direct sale. Authors and narrators only saw the ‘truer’ nature of our sales when promo code income vanished, and the glitch revealed huge numbers of returns.
Audible has used smoke and mirror tricks with promo codes within their playbook of building a monopoly and its maintenance. This is one of the many important reasons the #Audiblegate fight is long overdue and necessary. Audible can afford to hemorrhage millions of Bezos’s dollars and still be the audiobook market leader, while we, the content providers and creatives, who’ve spent considerable sums of money and time producing these books, remain in the dark on our true earnings. Audible’s market dominance and business practices require scrutiny and dissection by government enforcers to clean up the industry and allow healthy competition.
The only avenue left is legal action, and this begins with delivery of evidence to engage enforcers. When you gamble it’s easy to forget the house creates a system where they eventually always win. Small incremental ‘wins’, like the extra 5% Audible promised for sales in December 2020, are created to keep author and narrator dissent at bay, and ensure authors keep gambling. Amazon plays the same game with its vendors. Amazon has the deepest pockets, and so their companies always win, and for them to win, sellers and creatives must lose. That outcome cannot be the end of the story.
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Isobel Starling bio:
Isobel Starling has been a full-time writer since 2014. She writes thrillers, fantasy, historical, and romance books in the M/M genre. Including translations in German, French, Italian, and Spanish, Isobel has published 54 titles, 27 of them as audiobooks. “As You Wish”, narrated by Gary Furlong won the Independent Audiobook Award for Romance in 2018, and was the first LGBTQ title to win a mainstream audiobook award.
In 2017 Isobel launched Decent Fellows Press which publishes e-book, print, and audiobooks by select M/M authors.
Social Media and link: https://linktr.ee/Decentfellowspress
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