Podcast Perspectives: The State of the Audiobook Industry

Jeff Umbro: This is Podcast Perspectives, a show about the latest news in the podcast industry and the people behind it. I'm your host, Jeff Umbro, founder and CEO of The Podglomente. Today we are doing something different on the show and talking about audiobooks. I started my career as a book publicist, so I'm personally interested in the topic, but it's also a subject which I think podcast folks should pay more attention to.

For one, in 2023 the audiobook industry is more than double the size of the podcast industry. There's a lot that podcasters can learn from that growth. But also, the two industries are intersecting and collaborating with one another in a lot of interesting ways. Between podcast agencies producing audiobooks, podcast platforms hosting audiobooks, and interesting distribution plays on both sides.

To break this all down, I have a great panel today, featuring Michele Cobb and Sean McManus, both audiobook publishers on the board of the Audio Publishers Association, and Landon Beach, an independent author who has published multiple audiobooks. 

So with that, let's get to it.

So everyone, welcome to the show. Just to make this a little bit easier, would everyone introduce themselves? Michele, would you like to begin?

Michele Cobb: Sure, I'm Michele Cobb. I'm the Executive Director of the Audio Publishers Association and I'm the publisher of AudioFile Magazine that reviews audiobooks. 

Jeff Umbro: And you have a podcast called Behind the Mic.

Michele Cobb: That's right. Behind the Mic, which AudioFile puts on. And I'm a small audio publisher myself. 

Jeff Umbro: Cool, and Sean, would you like to go next?

Sean McManus: Yeah, thank you. My name's Sean McManus. I'm the President of Dreamscape Media, an independent audiobook publisher. I'm also the president of the Audio Publisher Association and work closely with Michele in that function.

But I have close to 15 years in the audiobook field, with publishers from HarperCollins and Scholastic, as well as distributors such as Audible and Spotify.

Jeff Umbro: And Landon?

Landon Beach: I'm Landon Beach and I am an author of eight novels. The narrators who perform my novels are hall-of-fame narrator, Scott Brick, and award-winning narrator, Suzanne Elise Freeman.

Jeff Umbro: So, the reason that we have gathered you all here today is to talk about the parallels of the audiobook industry and the podcast industry. It feels really natural to have a conversation about audiobooks within the context of podcasting and on-demand audio. But that really wasn't necessarily the case, even a few years ago.

So first off, I want to ask you guys if you all think that right now is a pivotal moment in the audiobook industry. 

Sean McManus: Yes. I think overall audiobooks, to your point Jeff, were primarily a niche format, even three or four years ago. And now it's really transformed into more of a mass format. And I think that's anchored in [new] business models and the players coming into the space, which I know we're going to talk about. 

But I think that is the pivotal point: these new distributors, these new business models that are now taking hold to bring this from a niche format, really to a mass format is kind of where we are today.

Jeff Umbro: Yeah, I think that that's what I've been seeing, but I also am coming at this [as] somebody who's more or less a complete outsider to the space. 

So audiobooks, as far as I'm aware, are a $5 billion annual industry today. Podcasting is just about to cross over into $2 billion. Why is the news always about the podcast industry?

Michele Cobb: It's a good question. I think we've decided that people think podcasts are cooler than audiobooks, although we disagree. 

Podcasting is fairly new. Audiobooks and the Audio Publishers Association was formed in 1986. So we've actually been part of the landscape and it's been something that people have been exposed to for a long time.

Sean McManus: I would also add that everyone's talking about podcasts because they're free, they're amazing, they're great. I still think audiobooks are much better, Jeff, sorry. But in Sweden, over 60 percent of all units consumed in the book space, in the publishing space, are audiobooks. Because they embrace streaming, they embrace different business models, and the larger publishers embrace it as well.

So I think us, as English-language-speaking territories in the U.S. specifically, we're on that road and it's actually going to make audiobooks a primary format in the long run.

Jeff Umbro: Michele, I believe you've mentioned to me before that there are four major business models surrounding the audiobook industry. Would you walk us through those?

Michele Cobb: Sure. The model that the U.S. market was built on in retail is called the credit subscription model. So that's where you're buying, you know, one book a month on credit, generally in the 15 range. You can pick out whatever you pick out. This often incentivizes people to choose a long title – you paid $15, you might as well get your 30 hours worth. 

Then you've got your very standard à la carte model. You buy one title, whatever the publisher is charging for that, you pay that, and you kind of own that title. 

Then there's the subscription model, which exists in either an unlimited or limited way where you're essentially paying a monthly fee to access a body of content.

And then I'm also seeing this hybrid subscription model, which is you pay for credit, and then you also get access to a library filled with content. 

Jeff Umbro: It strikes me that there are a bunch of different business models out there that people are testing. The one that's been around the longest that most people listening to this are probably aware of is the credit system, because that's what Audible uses.

The biggest one that is in the news lately is probably the subscription model via Spotify. Can you walk us through what that looks like? 

Michele Cobb: Sure. So Spotify has actually launched a program in which if you are a premium subscriber, meaning you pay a certain amount per month to access podcasts and music, you can also access audiobooks and you can listen to up to 15 hours per month as part of your subscription.

Jeff Umbro: And then if you want to listen to like 15 to 20 hours, do you just have to pay extra?

Michele Cobb: That's correct. You can pay a little more and get a little more, as we say. 

And then there are other audiobooks that are available in Spotify that you cannot get through that model. You can buy them à la carte. You just have to leave the app, go to their website, acquire it, and then you can load it in. 

Jeff Umbro: And because we like simple things, Spotify is not actually letting people buy it on their app. They have to go to a separate website, because of an entirely separate issue that we won't get into today, with Apple’s business models in their app store.

And then speaking of Apple, Apple books, and I believe Google books, and several others just operate on [an] à la carte system – you pay for what you want. So those are the dominant models. And I believe those four [models] probably make up like 90-something percent of the market

Michele Cobb: You'd actually be surprised. I remember making a slide years ago that had all the players and it was Overdrive and Audible. And then five years ago, I started having 40 or 50 different retailers on the slide. So as the market grows, the bigger players actually technically lose market share, because there are so many players in the market. But they continue to grow.

Jeff Umbro: Well, I like that. 

This could be Sean or Michele. Could you walk us through what the audiobook space looked like over the last 10 years? What happened that helped to transform it into what we see today?

Michele Cobb: Well, I would say a couple of things. 

First of all, the smartphone has been a huge boon for audiobooks, because, if you're old enough to remember carrying them on cassette or on CD, that was a lot to hold on to. But it was really that smartphone where suddenly you're carrying a computer with a lot of potential titles on it that helped people discover audiobooks. And the industry over the past 11 years has seen double-digit growth in revenue each year. And I really do tie that back to the smartphone and to publishers producing much more.

So 20 years ago, as a group of publishers, we probably published between 2000 and 3000 titles a year. Now, through digital production and digital delivery, each publisher in their own right has doubled and sometimes tripled their list in the past decade. And that amount of content being available has helped drive the format.

And then you have people like Landon who are independent authors who are doing their own publishing of books and audiobooks. And we're starting to see that that has a huge impact. So availability has been a key driver of growth. 

Sean McManus: And to add on to Michele's point, especially in the last five or ten years, Audible was a really big player in the industry in retail. They were the go-to for digital and they were the first ones out of the gate. Really their only competition were the public libraries and library systems. 

So where we are now, I mean, we have companies like Scribd and Chirp, Apple has grown significantly, Audiobooks.com… Gone are the days of just one retail player being the go-to stop for audiobooks. Now we have a really healthy ecosystem for audiobooks.

Jeff Umbro: Landon, I wanted to also ask you how you have seen this growth in the industry as somebody who is actually writing these books. When was the first audiobook that you wrote published? 

Landon Beach: My first audiobook got published in 2020, and I started working with Scott Brick in the summer of 2019. 

I think my perspective comes from seeing the growth in audiobooks and seeing [that] hardcover sales are down, paperback sales are down, printing costs are up. And so if you want to go and publish your book just because you want some family members to read it, and put it under the Christmas tree or whatnot, it's pretty inexpensive. 

But if you're looking to make a career of it, I think [there are] three legs of [the] stool: you have to have an ebook, you have to have some kind of physical copy, and you have to have audiobooks. And if you don't have those three, if you're not putting out a tremendous amount of material, which is beyond the scope of this podcast, then you have to think about the quality that you want to have with fewer books. And it's essential to have audiobooks as one of the legs of that stool, which puts an onus on trying to get really good narrators to separate yourself and your work. But that isn't easy either.

Jeff Umbro: On the podcast side, it's very similar. When I was a book publicist, we used to have this quote: something like 300 books everyday are being published and that's your competition. We were probably drastically underestimating how many books were being published, to be honest. 

So what we've established so far is that there are a few different business models through a lot of the big tech players, as well as some of the more legacy audio distribution platforms. There are more audiobooks than ever being produced and published because of accessibility with smartphones, with the tools to actually record this stuff. 

How are publishers and authors being paid through all of these disparate systems? Sean, would you like to take that one? 

Sean McManus: Yeah, it's a tough question because every single business model is different, between publisher and author. It really is still anchored in the traditional publishing model. And so whatever the publisher nets, a percentage of that then is given down to the author from there.

Now, in the instance of one copy, one user for libraries, you're selling an audiobook to a library system for many opportunities to listen to that title. So usually the list price is much greater, so the net is much greater, and so on. 

For [customers] such as Audible, it's more similar to à la carte, but a smaller amount that is then netted by the publisher and then paid through.

So without going into every single business model and everything overall, it's more of a traditional publishing space, where the publisher or the author who is self-published just receives a net amount from that distribution platform.

Jeff Umbro: So, authors/publishers, depending on the distribution deal, will receive some kind of percentage on whatever sales occur.

How dominant is the traditional publishing industry, the “Big Five” publishers within this market? As opposed to independent publishers or people who are trying to move into this space on their own

Sean McManus:. It's really interesting to compare ebooks and audiobooks. When you look at the units consumed for ebooks, say Kindle Unlimited or Amazon, the ebook percentage of self-published authors and non-Big Five and non-traditional publishing Is really, really high. It's over 50 percent 

On the audiobook side it's much, much smaller. And that's because of all the hurdles that have historically been put in front of self-published authors, as well as independent audiobook publishers. 

Now we're in a world where, I'd say two years ago the self-published authors were about 10% to 20% and the independents were 10% to 20% of all audiobook consumption. But now, that number is increasing very quickly. Because those ebooks that do extraordinarily well have great SEO, great metadata, great cover art, great narrators such as Scott Brick and others. They're actually exploding.

And so what people aren't talking about as much in the trades for publishing is the fact that this self-publishing and these independents are actually growing leaps and bounds because of the plethora and the quality of content out there. I think that's what new business models can bring to the front, such as Spotify and others, that the more traditional book distributors, such as Audible and others, haven't been able to really push. 

I think we're going to see that self-publishing and those independent publishers such as myself and Landon, and Michele's publishing company really come into fruition more.

Jeff Umbro: Landon, what do you think? You published your first audiobook in 2020. [It] sounds like that is a big part of your business as a writer. Have you seen more opportunity in the space in the last couple of years? 

Landon Beach: When you think about putting your work out in audiobooks, I think it always comes down to what is going to make you the most competitive as more and more narrators who work with traditional publishers are being open to working with independent authors. Those lines are going to get blurred. I've seen more and more indies start to go with audiobook narrators and try to get top-flight audiobook narrators to compete. 

And as far as the payment goes, it's pretty streamlined. I don't have to wait for any royalties for months while my agent and publisher, if I had them, would be fighting. It goes directly into my account and allows me to focus on putting out quality content, rather than trying to go through the tentacles of bureaucracy. So there is an advantage too. 

But it is a lot more work upfront. My wife and I are a mighty team of two. She is able to help me upload those files and work out when we have to submit them to distributors that are going to get them out to retailers. So in one way, technology giveth, and in another way, it can taketh away. If you don't know how to navigate that, that's probably something that would make people shy away from independent publishing. It is a lot more work. 

Sean McManus: In the APA, the Audio Publishers Association data, one of the key items, I forget where it ranks, 1, 2, or 3, of actually wanting to consume an audiobook, outside of the actual title, is the narrator. So consumers looking for that narrator, looking for that name that they want to listen to, is so key and continues to be in both the retail segment and the library segment. 

Jeff Umbro:  That brings me to one of the questions that I have, which is more of a fun one for me to ask. There's a Star Wars audiobook that I've listened to that has all the lightsaber sounds and, not [a[ John Williams score, but might as well have been. There is George Saunders’ Lincoln in the Bardo from a few years back, which had something like 200 voices in it outside of the narrator. How much does the production play a part in how people consume these things and enjoy them?

Michele Cobb: I think that's a good question. For a long time, there's kind of been two camps of listeners, people that are listening and are used to the one narrator reading all the parts, and then there's people that listen to more of the audio drama with the sound effects and music and full cast. And never the twain shall meet is what I often found in my anecdotal discussions with people. 

But I think that that is changing. More books are being published with full cast, sound effects, and music. More books are being published with three perspectives, so three different narrators. We're starting to see that that piece of the performance is being honored in a different way.

And I think part of that is because people are listening to podcasts that are doing these things. So publishers are being more creative and consumers are being more open to the idea of exploring different types of listening. 

Landon Beach: Jeff, I'd say too, there's another distinction, and that's just in the performer themself, which is there are some voice artists who do different voices for different characters, and there are others who do not and play more the attitude and go through subtlety. So even within a singular narrator, there are choices that differentiate between each other. 

So that's even different than hiring a full cast because you could have one person who is an incredible voice imitator and could come up with different voices for characters that would give the impression that you have a bigger cast. That's something else that exists in that space, especially when you have a singular narrator.

Jeff Umbro: It's so funny because all three of you are saying things that could easily be applied to podcasting. And I do think that there is a big blend in these different business models. It's happening right now. 

I spoke with somebody recently who works at a premium subscription podcast service, and they're starting to print, essentially, gift cards that you can buy at Target, scan, and you can download your audiobook. There is Pushkin, who is putting out paid audiobooks on RSS feeds that do a premium subscription. Substack is kind of its own beast that is more or less that – you can get audio versions of people's newsletters. Same with Autumn from the New York Times, who the New York times purchased about a year ago.

I feel like we are living through whatever like “phase two” or “phase three” of the audiobook industry is, where all of this stuff is getting blended, and people are used to audiobooks, and moving to podcasting, and vice versa. 

Do you guys want to speak to that new business model or whatever like this merge of, of formats is? And do you think that like five years from now we're not even going to be talking about audiobooks versus podcasts? Am I crazy?

Michele Cobb: I don't think you're crazy. In addition to being the executive director of the Audio Publishers Association, I'm also the executive director of the Podcast Academy. And I would say this issue is the singular one I spend the most time on, because we in the industry can't really describe the difference except in business models. 

So we're trying to figure out how they're going to come together, and if the consumer doesn't care, how we are going to walk in parallel step with each other, still creating great products, but maintaining a way to monetize each one, maybe in a slightly different way, or maybe in the same way.

Sean McManus: And I would go on – overall, I actually don't think podcasts and audiobooks will merge. I think they are very different, actually. So Michele's point, how can we walk in parallel with one another, is really the most important piece. 

The fact of the matter is, and I might ruffle feathers here, but “audiobooks,” that word is very different than “podcasts.” You can go to different territories around the world, but in America, we've been trained to say that podcasts are free. In my mind, those are free. Audiobooks actually have a higher value just from the word alone. 

Now, would a recording of a fiction podcast be just as good, if not even ten-times better than a lot of audiobooks? Yes, they definitely could be, and they definitely are. But I think what we're seeing now is those longer form Audiobooks or audio programs going to the audiobook sector and those podcasts going to [the podcast sector]. I think we're actually gonna see a real separation. 

But they still need to live right next to each other. And they actually feed one another in a lot of ways, because it's very much the same consumer. 

Michele Cobb: And I would say the thing that I equate them to is movies and television, right? Television used to be free, pre-cable, but movies were of that longer format, sort of higher premium. And I think that these formats of podcasts and audiobooks are largely the same. Movies and television exist together on the same platforms, podcasts and audiobooks now exist together on the same platforms. So I think that there's a lot of upside for both. 

Jeff Umbro: Speaking of these different business models, what do you think, Landon, about the idea of putting advertisements in audiobooks? So putting ad markers at chapters, et cetera. There’s been some discussion of that with some of the platforms.

Landon Beach: I think what I would say, in going with what Michele was alluding to there, is that when you had hardcover or paperback book, and you purchased them, or you got them from the library, or you went to the theater, what you had was uninterrupted choice to be immersed into this content. And I could not imagine if I was sitting on a couch with a hardcover book reading, and all of a sudden a robot that was sitting next to me reached over, closed the book and said, “let me now interrupt your experience and take you completely out of that world to give you an ad for something that you may or may not be interested in.” 

In television, when you're watching sports or when we were all growing up you had commercials, you had that expectation [of that]. But it just reminds you that you're back in the real world, and you're like, “I'm tired, I just had a bad day at work…” And then television would have to leave you always on a cliffhanger so that you'd be like, “well, I wonder how Magnum PI is going to get out of this one,” and then you get sucked back into it. 

But I just think that it eliminates [the] choice of the consumer, involuntarily stopping someone from being immersed in something they paid for. I think it is a really bad idea from an artistic standpoint. I do get the revenue streams that can come from that. But I really hope that remains a distinction between podcasts and audiobooks, that those two things don't cross over, my friend.

Jeff Umbro: I agree with everything that you all said. And I think that we're going to be at a point where they're going to be two distinct industries that are working in parallel to one another. But I also do think that we're continuing to see those boundaries get absorbed into one another. 

You start to see a lot of organizations talk about putting advertisements in audiobooks, or taking a podcast and making it a premium model. Apple's been doing that for the last year or two with their subscription models. 

I also wanted to spend just a minute talking about the next step of audiobooks. Historically, and as long as I can remember, up until the last few years, Audible has been the company that is, in my mind, the go-to organization to go and purchase a book. Over the last few years, that's changed.

Would you like to spend a minute talking about what has changed in that regard and the new platforms that are emerging? 

Michele Cobb: I think there's just so many more retailers. We've talked about Apple, we've talked about Google, Audiobooks.com, Scribd, Libro.fm, Kobo, Audiobooks Now. I mean, I can just [them] rattle off. There's so many different players in the market who are contributing to bringing listeners to the format. 

Just like with your TV streaming service, you might bop around. You may do so as well in the audiobook space now. And we know that a lot of listeners come to the format from libraries and do a portion of their listening through the public library as well.

Jeff Umbro: I go back and forth in my own head about the idea of these new retailers or distribution platforms that are starting to market in audiobooks. Are they just stealing audience share from one another, or is the overall pie growing significantly? Significantly enough to support all of those like different people listening?

Michele Cobb: So, I mean, we can thank the pandemic for reminding people that they liked to read, and certainly that they like to get away from screens. Both of those things have helped audiobooks and in general. 20 years ago, less than a quarter of the population had ever listened to an audiobook. This year, the APA measured 53% of U.S. adults saying that they had ever listened to audiobooks, and that was a big uptick from the previous year. 

And the good thing is when someone listens to an audiobook once, they tend to return, and especially those younger listeners. So the ones that we're picking up now in their youth, they're going to be with us for another 70, 80 years, which is great.

Sean McManus: I think to merge those two questions around the players and cannibalization, I think every distributor, retailer, or library outlet that comes into the space, actually has its own audience. 

Take Chirp, for example. A lower cost audiobook offering has a much older audience looking for deals for audiobooks. You bring in Spotify, and we've already seen some initial data – a much, much younger demographic. And that is what the Audio Publisher Association wants to see. That's what I want to see as a publisher of audiobooks. A different demographic coming in.

Jeff Umbro: Well, thank you all so much for joining us, and we'll be sure to have you all back soon.

Thank you to Michele, Sean, and Landon for joining us on this episode. You can find Michele Cobb at the Audio Publishers Association and on Behind the Mic. She wanted me to let you all know that the Audies will be announced on March 4th, 2024. You can find Sean McManus at dreamscapepublishing.com, and you can find Landon at landonbeachbooks.com. 

For more podcast related news, info, and takes, you can follow me on Twitter @JeffUmbro. Podcast Perspectives is a production of the Podglomerate. If you are looking for help producing, distributing, or monetizing your podcast, you can find us at thepodglomerate.com. Shoot us an email at listen@thepodglomerate.com or follow us on all social platforms @podglomerate. 

This episode was produced by Chris Boniello and Henry Lavoie. And thank you to our marketing team, Joni Deutsch, Madison Richards, Morgan Swift, Annabella Pena, and Vanessa Ullman. And a special thank you to Dan Christo. Thanks for listening, and I will catch you next week.