Of the 150 titles on HarperCollins’s spring audio list, only two are being published on CD; the rest are being released as digital downloads. Although CD sales have been declining in the audio market for several years, no major house has moved away this drastically from the format. So what does a largely download-only audio list from one of the big six publishers mean? Although some insiders said giving up on CDs is giving up on revenue, others believe that Harper may simply be the first publisher making this leap, and that the other major houses will soon follow.
According to the Audio Publishers Association’s 2009 statistical survey, units in the year rose, but sales fell as more business shifted to lower-priced digital downloads. Although CDs still accounted for 65% of the market, the production cost of creating CDs, in a business with very tight margins, has encouraged many houses to move more aggressively into digital-only models.
Harper insisted that its digital-heavy spring list does not mean it is abandoning the CD format. Christy Mirabal, associate director of HarperAudio, said the house is “committed to bringing our authors’ works to as many fans’ ears as we can,” but that in recent years “our listeners have really gravitated to the digital audio format.” Mirabal added that Harper will likely decide later in the publication process to bring out a few more of its spring titles on CD and that “while we are selective in our CD publications, we have no plans to discontinue publishing in this format.”
Chris Lynch, executive v-p and publisher of audio at Simon & Schuster, said that while his division does some titles as digital downloads, most of its list is still released on CD. Although he thinks interest in CDs will continue to diminish, he noted that CDs often do not need to sell a large number of copies to remain profitable. “We’re at a point now where we look at every title we publish, and we ask ourselves, ‘Can we sell enough over time to make money off the CD?’ ”
Random House Audio, which pointed to recent big hits in audio (both on CD and download) like Decision Points and Stieg Larsson’s Millennium trilogy, also believes the CD market is very much alive. “Downloads are certainly a rapidly growing and important segment of our audio publishing business,” said Sheila O’Shea, director of public relations for RH Audio, “but we’re still seeing strong CD sales.”
Seth Gershel, a publishing consultant and former head of S&S Audio, said the reality is that audio, like print, is going digital, but is still a long way from being all digital. Echoing Lynch’s sentiments, Gershel said, “Because of the economics of scale [with CDs], you can still make money publishing in this format.” While audio CD sales may have gone down by as much as half in the past five years, he added, titles in the format still sell thousands of units.
Another wrinkle in Harper’s audio approach is a change in the publisher’s contract boilerplate. Although Mirabal said contract negotiations are private and she could not comment on the subject, a number of sources said the publisher has added language to its contracts to broaden the scope of digital rights. Sources said the section of Harper’s contract that defines physical versus digital now indicates that audio is part of digital.
While any attempt by publishers to control more rights is often met with outrage by agents, the issue with audio is more complex. Although some agents said they dislike the idea of rolling up audio rights with digital—one said, bluntly, “It is something we will not accept”—others acknowledged that perhaps audio belongs with digital. With the market for digital books in varied formats expanding, agents said that audio will likely be something necessary for those ancillary digital forms, like enhanced e-books and formats that have not yet sprung up. Almost all those interviewed said the industry is looking ahead to a time when the audio download will be bundled with the e-book, and these enhanced editions will be something that can then compete, and be priced competitively, with a print hardcover upon a title’s initial release. If a publisher is only using the audio right to create a digital download, which generally brings in less revenue for authors since its price is significantly lower than the CD’s, agents will be forced to weigh the pros and cons of selling audio separately. Withholding the audio right may block a publisher from creating editions like enhanced e-books or apps, cutting off valuable revenue streams. But withholding the audio right offers the chance to land a separate audiobook deal with a smaller audio publisher.
The Authors Guild’s Paul Aiken, who confirmed that Harper’s contract does now roll in digital audio with the standard digital rights, said this will be a problem in the industry. “Many authors and agents will have serious issues with this,” he said. Aiken warned against the danger of publishers “warehousing unused rights” and said, “At a minimum, authors need to be able to recover audio rights if they aren’t being exploited by the publisher.”