Blog Audio

What indie book publishers can gain from audiobooks

Cover image for What indie book publishers can gain from audiobooks
Photo of Rutger Rosenborg
by Rutger Rosenborg

In the music industry, three major labels generate the lion’s share of revenue: Universal, Sony, and Warner. In the book publishing industry, the “big five” publishers dominate: Penguin Random House, Hachette, Macmillan, Simon & Schuster, and HarperCollins. 

The thousands of other music labels and book publishers are considered “independent” though, in the aggregate, they make up substantial shares of their respective industries’ revenue. In fact, since the music industry’s shift from physical to streaming, major label market share has consistently declined relative to independent label market share gains. With promising early figures on audiobooks from one of the big five book publishers, is there anything independent book publishers can learn from both these results and music industry trends?

HarperCollins posts promising financials

HarperCollins’ net income in Q4 2023 was $183 million, compared to $94 million in the prior year, while EBITDA grew 67% according to parent company News Corp’s latest financial report. The report calls out audiobooks and the publisher’s new partnership with Spotify as primary drivers for this profitability, with digital sales increasing 15% year-over-year. In Q4 2022, digital sales comprised 19% of consumer revenues, half of which came from audiobooks. In Q4 2023, that 19% climbed two points to 21%.

HarperCollins’ growth is reflective of the book industry writ large, where from 2018 to 2022, digital audio revenue surged 71.7%, ultimately accounting for 10.4% of total US book publishing revenue. While a tenth of total revenue sounds small, audiobooks not only accounted for almost $3 billion of 2022 revenue in the US alone according to the Association of American Publishers, but they are also much cheaper to produce and distribute than physical books. Not only this, but MIDiA data reflects that audiobooks reach a new consumer segment entirely. Rather than consumers who read physical books converting to audiobook listeners (which could dent publishing revenue); audiobook listeners are a distinct additional segment (which boosts revenue). To make matters even more promising, audiobook piracy is not an issue the way music piracy was for the music industry, suggesting that leaning into digital should be a no-brainer for book publishers.

Independents can find digital success too

Some independent book publishers have managed to leverage digital to make waves in their own right. Wolfpack Publishing, for instance, experienced a remarkable 67% growth in sales between 2019 and 2021 by publishing digital editions of out-of-print titles and developing an audiobook production wing of the company. North Atlantic Books witnessed a 14% increase in sales in 2021, with digital sales surging to account for 22% of the publisher’s total revenue. That growth was driven by a 50% uptick in audiobook sales over a three-year period, underscoring the publisher's commitment to adaptability in a rapidly evolving landscape.

By leaning into digital, as HarperCollins has done, these independent publishers became some of the fastest growing indies from 2019-2021. In more recent years, independent publishers like Forefront Books and Microcosm Publishing have also made their names with non-traditional approaches, from licensing deals that allow authors to retain their intellectual property rights to radical financial transparency and revenue distribution.

It is a trend the music industry knows all too well: in a transitioning industry, agile indies can thrive by filling the needs not being met by slower, traditional power players. As the music industry’s shift to streaming democratised music consumption, creation, and distribution, opportunities for indies to reach new audiences and capitalise on niches expanded. Through this, a new class of distribution developed, with music distributors providing independent creators with self-service tools. As self-publishing grows, independent publishers should consider further diversifying their offerings by providing self-service tools for independent writers to create and distribute audiobooks, bypassing the gatekeeping of physical distribution (typically also controlled by the big five). If independent publishers stay ahead of the curve and embrace the expansion of books into digital audio, then audiobooks could very well help the independent sector of book publishing grow in a manner similar to how it has grown in the music industry.

The discussion around this post has not yet got started, be the first to add an opinion.


Add your comment