monopoly

AMAZON, THE UNDEFEATED AUDIOBOOK CHAMPION?

Audiobooks are undoubtedly the fastest growing segment in the publishing industry. The global audiobooks market is valued at $3.5 billion (Kozlowski, 2016) and the format has not seen the dwindling sales that eBooks have over the past couple of years. Rather it can be argued that audiobooks have replaced eBooks on readers’ metaphoric shelves. Carter (2016) reported that the format is outselling print editions too with Richard Thaler at Amazon claiming that “books in every imaginable genre [are selling] better as spoken rather than written word ­– four times as well” to be exact (Olshan, 2016). Unlike what Octavio West (2017) suggests, audiobooks are clearly proving that books do not have to be “printed to fully exist”. As the ‘new face of the publishing industry’, they offer readers the chance to multitask whilst giving them an adequate reading experience (“Are You Still Listening?”, 2015). In an age where time is nothing short of a luxury, audiobooks are the pioneers of literature on the go.

It is no wonder that numerous organisations are battling each other for a piece of this lucrative market. With Amazon declaring that they are the “unmatched… largest producer of digital audiobooks” in the world (“What is Audible?”, 2017). “Largest” most likely but “unmatched” is up for contention. Using quantitative and qualitative evidence, this essay will argue that Amazon is ruling the auditory waves and pioneering the audiobook market. This reign may be curbed however if individual publishers merge their functions, to specialise in techniques that the conglomerate has not tapped into.

 

Amazon’s general presence in the book industry has been met with controversy, hostility and outright disdain. The main accusations being that the company is undercutting traditional publishers and acting as a monopoly both in bookselling and on the functional front. Insert the recent news of the Amazon Buy button here for a small glimpse into the ire of traditional publishers. The launch of the Kindle eReader in 2007 is what catapulted Amazon to “major player” status in the industry and is also what spearheaded doubts that digital formats were on the path to replace print books. What was for the most part ignored in all of this was that Amazon was building an auditory empire too, when it purchased Brilliance Audio in the same year and Audible for US$300 million in 2008. Brilliance Audio was the largest independent audiobook company in the United States, a market with $1.8 billion in audio sales (Kozlowski, 2016) .

By 2013, The Atlantic had reported that

“60 percent of audiobooks were downloaded to digital devices, and nearly all of those came from Audible or through its long-standing license to supply audiobooks to Apple’s iTunes.” An important aspect to note here is the not-so-surprising collaboration with iTunes, one of the world’s most encompassing auditory platforms found on almost every Apple product. This partnership bought Amazon an unparalleled amount of visibility. Gorey (2017) describes it more succinctly: Amazon and Apple “ran the two largest distributors of audiobooks in the world, with no room for any smaller third-party operations to compete”. Their exclusive, monopolistic relationship despite it being deemed illegal in countries such as Germany equipped both and in particular Amazon to dominate the market today.

In 2016, Forbes reported that Amazon and Audible were the most frequently used audiobook online retailers, Audible seeing 20.7% of purchases (compared to 14.2% in 2014) and Amazon seeing 21.0% (compared to 21.5% in 2014). Listed here as two separate companies but functioning under one umbrella, the Amazon Group as of 2016 controls 41.7% of online audiobook sales. The company performed a feat of cross-marketing genius: linking its audiobook service to its Kindle eReader and Amazon Prime Reading whilst advertising Audible on almost every popular podcast in the world (Carter, 2016). Listeners of podcasts are more likely than anyone to jump on to the audiobook wave. Good eReader performed an earlier more qualitative study corroborating my reasoning and proving that Audible is the primary place to shop for Audiobooks:

“The most popular audiobook genres in 2016 were mystery, thriller, romance and fantasy/science fiction. 53 people voted and it looks like Audible is the most popular service, which garnered 16.6% of the vote.” (Kozlowski, 2016)

 

Whilst these figures clearly show that Amazon is leading the retail side, they fail to take into consideration the presence of libraries, free downloads and good old pirating (see below).

 

 

Amazon is manning the commercial front but free/public access is still drawing the largest crowds. If Amazon extends its “free for one month” Netflix-style subscriptions and includes a deal offering numerous free audiobook downloads, then libraries might be in serious trouble. Until then, they can hang on to their lifeboats of government grants and rest assured that they are still the most popular place to acquire audiobooks.

 

On the commercial front, “discoverability is [the utmost] important consideration for audiobook publishers”  (Duffer, 2016). To prove this, I performed a basic experiment and typed “audio book” in Google search on both Safari and Chrome. Amazon’s “Audible” was the first result to show.  Like hoover is to vacuums and Kleenex is to tissue paper, Amazon is making its subsidiary synonymous with the term audiobook. It is therefore not surprising that Audible is mirroring its parent company through its expansion into the world of self-publishing with their Audiobook Creation Exchange (ACX)  service.

 

“ACX is a marketplace where authors, literary agents, publishers, and other Rights Holders can connect with narrators, engineers, recording studios, and other Producers capable of producing a finished audiobook. The result: More audiobooks will be made.” (Yau, 2016)

 

Through ACX, Amazon is making itself the primary meeting place for all of those with a stake in the audiobook industry. By facilitating the production process, they are positioning themselves as a necessity; fostering long term relationships with the other players in the industry and listeners alike (Maxwell, 2012) whilst solidifying their position in what Jane McGonigal dubs “the engagement economy”.

 

Where is Canada?

There is a general lack of Canadian content in audio format. BookNet Canada reported that out of 1.1 million active records and 21 650 audiobooks in 2015, only 398 had Canadian contributors (BNC, 2015). Outsourcing content from the United States has become the norm, as expensive as it is, it is aggravated by the fact that there are only a handful of audiobook producers in Canada (Carter, 2016). Audible has set itself the task of changing this. Their ‘mandate’ is to provide Canadian content on their Canadian eStore, Audible.ca, where “approximately 300,000 titles reside, thousands of which are by Canadian authors and publishers” (Carter, 2017). Audible is also making its presence known on the Canadian literary scene by sponsoring the most prestigious prize in the country, the Giller. This is a further attempt by Amazon to make the company a household name. Audible Canada is also the company’s first bi-lingual store, which Audible’s chief content officer calls a “unique and immersive experience for French Canadians” (Carter, 2017). Attempting to bridge the tense language divide in Canada is the smartest business move on Amazon’s part. Furthermore, Amazon is able to jump on whatever wave is currently popular with a quicker turnaround than its competitors. For example they are offering Margaret Atwood’s, The Handmaid’s Tale audiobook for free to any first time subscribers. It is needless to say that this book has been the buzz book in the industry this year as a result of its TV adaptation. Strategically offering Canadian content and promoting a nationalist front in an age where Canadians are increasingly responding to audiobooks, is a marketing strategy for the gods.

So what about the competition?

According to Kevin Williams from Talon Books, audiobooks are extremely expensive to make and independent publishers cannot burden the cost on their own. On the contrary companies like Amazon are benefiting from economies of scale as they are large enough to host the infrastructure needed to produce the books. Other multinationals with successful audio arms such as Hachette, HarperCollins and now Penguin Randomhouse, are also benefitting from advantages attributed to size. I believe that independent publishers in Canada will not be able to compete in this market unless they merge their auditory arms. ECW is one of the publishers pioneering these “collaborations”; with help from Coach House Books. Both have spearheaded a project to publish 100 audiobooks using Canadian content and local resources (Yau, 2016). Mergers are the lifeboat in this Amazon world.

Macmillan Audio’s collaboration with hoopla digital is necessary to deter Amazon’s monopolistic advantage in online retail. Whilst the Audiobooks.com partnership with Android Auto to bring 60 000 titles to over 60 million cars within the next five years is a feat Amazon has not tapped into yet (Kristons, 2015). Audiobooks.com allows subscribers to stream their books whilst Audible, Amazon and Apple offer downloading options only. The biggest collaboration that will withstand Amazon is that of Kobo and her sister company Overdrive. Overdrive is “the largest company [powering] 75% of all Canadian and US libraries audiobook and e-book collections” without leaning on a third-party distributor (Carter, “Kobo” 2017). Libraries go beyond the scope of Amazon’s reach by  offering audiobook services for the blind or partially sighted alongside people with other disabilities. The need for libraries will never wane. The only reason Overdrive is at a disadvantage is because multinationals are reluctant to provide them with content. On the commercial side, however,  Kobo entered the audiobook subscription market in September 2017 by pricing its books at $12.99 as opposed to Amazon’s $14.95 a month. Time will tell whether this will have an impact on Amazon’s clientele.

 

Lastly, publishers need to be innovative in this fast-paced environment. Audible has partnered with dog psychologist Cesar Millan to create Audible for Dogs, a guide to help people care for their pets. Unless other publishers match this level of experimentation, they will remain invisible and a step behind. It is my belief however that constant alliances, the larger they are, are the only way to weaken Amazon’s grip on the audiobook market. Until then, may their kingdom continue to reign.

 

Works Cited

 

  • Are You Still Listening. (2015). BookNet Canada. Retrieved 31 October 2017, from https://www.booknetcanada.ca/are-you-still-listening

 

 

 

  • Carter, S. (2017). Kobo enters the audiobook subscription market | Quill and Quire. Quill and Quire. Retrieved 31 October 2017, from https://quillandquire.com/omni/kobo-enters-the-audiobook-subscription-market/

 

  • Duffer, E. (2016). Forbes Welcome. com. Retrieved 31 October 2017, from https://www.forbes.com/sites/ellenduffer/2016/12/30/canadian-audiobook-users-favor-amazon-and-audible-over-itunes/#67c4494e55fc

 

  • Gorey, C. (2013). Amazon and Apple will now allow third-party audiobook sales in EU. Silicon Republic. Retrieved 31 October 2017, from https://www.siliconrepublic.com/companies/audiobooks-amazon-apple-audible

 

 

 

  • Maxwell, J. (2012). Amazon and the Engagement Economy (repost) | Publishing @ SFU. sfu.ca. Retrieved 31 October 2017, from https://publishing.sfu.ca/2012/11/amazon-and-the-engagement-economy/

 

  • Olshan, J. (2016). Forget e-books, this may be the real future of reading. MarketWatch. Retrieved 31 October 2017, from https://www.marketwatch.com/story/why-some-audiobooks-sell-four-times-as-well-as-their-print-versions-2015-12-08?siteid=rss&rss=1

 

 

  • West, Octavio. “The Printed Nature of Books.” PUB800, 3 Oct. 2017, https://tkbr.publishing.sfu.ca/pub800/2017/10/the-printed-nature-of-books/. Accessed 28 Oct. 2017.
  • What is Audible?. (2017). custhelp.com. Retrieved 31 October 2017, from http://audible.custhelp.com/app/answers/detail/a_id/4436/~/what-is-audible%3F

 

  • Yau, K., & Yau, K. (2016). Audiobooks: State of the union. BookNet Canada. Retrieved 31 October 2017, from https://www.booknetcanada.ca/blog/2016/8/5/audiobooks-state-of-the-union

Works Consulted

  • Beyond Audible: Other Options for Audiobooks. (2017). Costa Connected. Retrieved 31 October 2017, from http://costaconnected.com/beyond-audible-other-options-for-audiobooks/

 

  • Greenberg, S. (2016). Macmillan Audio Joins hoopla digital; Publisher Will Provide Audiobooks on hoopla digital to Public Libraries in Pilot Program. Marketwire. Retrieved 31 October 2017, from http://www.marketwired.com/press-release/macmillan-audio-joins-hoopla-digital-publisher-will-provide-audiobooks-on-hoopla-digital-2017204.htm

 

  • Kozlowski, M., & Kozlowski, M. (2017). Harlequin Audiobooks Now Available for Libraries. Good E-Reader – eBook, Audiobook and Digital Publishing News. Retrieved 31 October 2017, from https://goodereader.com/blog/audiobooks/harlequin-audiobooks-now-available-for-libraries

 

  • Kozlowski, M. (2017). Penguin Random House Audiobook Sales Increase in 2017. Retrieved 31 October 2017, from http://tps://goodereader.com/blog/business-news/penguin-random-house-audiobook-sales-increase-in-2017

 

  • Staff, Q. (2017). The explosion in ebook lending | Quill and Quire. Quill and Quire. Retrieved 31 October 2017, from https://quillandquire.com/omni/the-explosion-in-ebook-lending/

 

  • Staff, Q. (2017). Canadian Accessible Library Service to serve print-disabled patrons | Quill and Quire. Quill and Quire. Retrieved 31 October 2017, from https://quillandquire.com/omni/canadian-accessible-library-service-to-serve-print-disabled-patrons/

 

  • (2017). Libby can give you access to tons of free books and audiobooks on your phone with just your library card. Android Police. Retrieved 31 October 2017, from http://www.androidpolice.com/2017/04/06/libby-can-give-access-tons-free-books-audiobooks-phone-just-library-card/

https://www.theverge.com/2017/8/7/16109228/cesar-millan-audible-for-dogs-psychology

 

http://forums.welltrainedmind.com/topic/633429-is-audible-worth-the-membership/