Audible UK revenue soars 45%

Audible UK grew its revenue by 45% last year to over £97m and posted its first operating profit to date of almost £2m. Meanwhile, market analyst Enders has predicted that “the market will continue its period of strong growth”, with sale comfortably above £100m already, though it warned that there were “early signs of over-hype”.

According to accounts filed on Companies House, Audible's turnover for 2017 came in at £97m up from £67.1m the year prior. It turned a gross profit of £59.9m up from £38.9m in 2016 while reporting its first ever operating profit of almost £2m up from an operating loss of close to £12m the year before.

Audible is the dominant player in the UK's audiobook download market. Earlier this year the Publishers Association's annual Yearbook showed publishers' invoiced audiobook sales grew by 22% in 2017 to £31m in digital audiobook sales in 2017. PA c.e.o. Stephen Lotinga said last month that the difference between the two figures was likely to be an indication of the “mark-up” the Amazon-owned company was achieving from its dominant market position. "You only have to look at the price of audiobooks in the UK to see there is significant mark-up going on," he said at the time. "That is what happens when you have a monopoly in the market. I think our figures are an accurate representation of what is happening in the audiobook market.”

A recent report research service Enders Analysis published last week acknowledged a "lack of reliable metrics for sizing the market" but said it believed Nielsen's numbers - which last year estimated the market to be worth in excess of £100m and still growing double-digits year-on-year - were "closest to the truth, though still likely low".

The growth of the audio market, which now represents 5% of the total trade market for books in the UK according to Nielsen, is "in no small part thanks to Audible", Enders' analysis said, because the company has opened up the market to people who don’t usually buy books, such as young men.

However, it also dubbed Audible a "frenemy" for simultaneously "breathing new life" into the market and "putting publishers under pressure". It described its approach to bidding for audio rights and its investment in high-end productions as "aggressive", making it a player "more directly threatening to publishers in audio than Amazon publishing is in written books".

The report explained:"While Amazon (Publishing) mostly picks up a longtail of genre fiction titles, Audible competes for the same authors and titles as incumbents. As a result, publishing audiobooks is more competitive and expensive than ever, prices are lower, and Audible is eating more and more of the market – a market that, more than any other company, Audible dragged into this new phase of growth."

Wading into the debate surrounding audio rights, the Enders' report said agents had valid cause for concern over publishers demanding that audio rights be bundled with the print and e-book rights to a book, www.thebookseller.com/news/battleground-audio-rights-heats-futurebook-683901">as previously reported.

"We are sympathetic to the publisher argument, given their investment in the text, but agents have a legitimate worry that audio rights will be neglected if large publishers use their leverage in print to get them as a matter of policy," it commented..

"...Tying audio to print rights is not enough to insulate publishers from the competitive pressure Audible has introduced: incumbent publishers are still going to have to pay market rates, and these rates are being pushed up."

Among Enders' other recommendations was that print should continue to dictate publishers' strategy. To do otherwise would be to "let the audio tail wag the print dog" and boost a market that is controlled by Amazon at the expense of a more competitive one, it argued.

Publishers should also be mindful to experiment with a range of audiobook models and avoid going 'all in' on any one retail or consumption model, it added.

Audible has been approached for comment.

The Bookseller's successful audiobook conference, AudioBook Revolution, returns in 2018 on 30th Novermber, as part of FutureBook Live. More details are available here.