The incident exposed practices and policies that conflicted with ACX authors’ interests on multiple levels. At the heart of this was a lack of transparency – around the implications for authors of key contract terms and in opaque accounting practices which make it impossible for any author to get a true picture of how their income is being calculated.
Today, we welcome Audible’s announcement of the latest changes to ACX’s terms in response to this campaign to address and remediate the widely expressed concerns of authors, narrators and audiobook purchasers.
Following our public letter—which was signed and endorsed by thirteen thousand authors and a wide coalition of international author, narrator, and producer organisations —the SoA, Guild and ALLi, with invaluable input from the independent author community, especially the members of the Facebook group “Fair Deal for Authors and Rightsholders,” have been in dialogue with Audible’s management, pushing for changes to its terms to make them more transparent, fair, and equitable for the thousands of authors whose work has contributed to the company’s success since its inception.
That letter calls on Audible to:
- provide full and complete accounting of returns made pursuant to this policy since it was first implemented.
- limit the time period of returns and exchanges that could be deducted from royalty counts from 365 days to a reasonable period, such as 48 hours, and allow only “true returns” (e.g., where less than 25% of the book has been read) to be deducted from royalty accounts;
- show the total number of unit purchases and returns on the author dashboards, not just the “net sales” already adjusted for any returns; and
- take action against abuse of the “return and exchange” terms by listeners.
Audible has made progress on some of these demands and other subsequent ones, but our reasonable demands for a full and complete accounting of returns made to date, to recompense authors and narrators for returns unfairly charged back to their accounts, and to stop charging back returns when more than 25% has been read, have not been met. In November Audible agreed to stop deducting authors’ royalty accounts for returns made after seven days from the date of purchase (previously, Audible deducted royalties for audiobook returns for 365 days after purchase). This week Audible announced several other new policies that resulted from our discussions and author complaints, including changes to exclusivity and licensing policies that have long been requested by independent authors who use ACX to produce and publish their books. They are:
Transparency in Reporting Returns/Exchanges
Audible is currently building a new reporting system that will reflect details on “returns and exchanges”, including returned units by title. The new reporting will be visible beginning in March 2021 in the ACX dashboard. The data will also be reported in Audible’s monthly financial statements starting in March and going forward. The new statements will show returns and exchanges going back to January 1st, but authors will not receive them until March when the new reporting system is up and running.
Note that only returns and exchanges made within seven days of purchase—i.e., those for which Audible is continuing to deduct royalties as of January 1, 2021—will be displayed, though Audible will continue to allow consumers to return and exchange audiobooks for up to a year.
We look forward to seeing these new statements and considering their suitability. We will continue to press for information in relation to the financial effect of the practice before the change.
Ability to Terminate Audible Distribution
Starting February 1, all ACX rights holders (including authors who self-publish audiobooks through ACX, as well as independent publishers that rely on ACX services to create audiobooks) – both exclusive and non-exclusive – may, with notice, terminate distribution of any title that has been in distribution for at least 90 days. To withdraw titles created using a royalty share option with the producer, however, the ACX rights holder will need to obtain consent from the producer. Titles for which distribution is terminated will be removed from all sales and distribution through ACX including Audible, Amazon and Apple. Audible will share details about the process for termination in the January payments letter, including details about how termination requests will be processed.
Ability to switch from Exclusivity to Non-Exclusivity
Audible will allow ACX rights holders in the DIY or Pay-for-Production programs to switch from exclusive to non-exclusive distribution for titles than have been on sale for at least 90 days. This does not apply to titles in the Royalty Share or Royalty Share Plus programs (where an Audible producer was used).
Our initial letter to Audible, which many of you signed onto made demands for limiting the period for returns that could be deducted from royalty accounts and transparency on returns in reports. Subsequently, with input from independent authors, we raised other issues, including the one-year commitment to exclusivity and the mandatory seven-year license term in Audible contracts, and are pleased to see that progress was made on these demands.
While Audible has not agreed to all of our demands for fairer treatment of authors, we appreciate their willingness to listen to our concerns, discuss how they might address some of them, and then alter certain practices. This marks an important step towards fairness.
Among other issues, we continue to seek transparency in the calculation of royalties on sales made to Audible members—specifically how it calculates the ALAF factor, which determines the royalty rate on membership plan sales—and we urge Audible to share more information regarding its calculations.
We will continue our dialogue and demands for changes on the substantive issue of returns discrepancies and other issues affecting authors, narrators, and content providers.