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November 20, 2020

#Audiblegate: How Audible-ACX Returns Policy Penalizes Authors

Posted by Victoria Strauss for Writer Beware®

Do you have audiobooks on Audible, either through your publisher or via ACX? If so, you'll want to head over to author Susan May's blog.

What follows is a long, detailed account of how Audible-ACX has been, in effect, hiding the volume of audiobook returns from authors by lumping them in with sales. 

Here's how it works. Audible-ACX records audiobook sales on a daily basis--but it shows them as an aggregate figure: the total of books sold less books returned. Returns are not broken out separately, and only show up on authors' sales statements if they exceed the number of sales. 

Why is this a problem? Well, returns strip authors of income, since authors' accounts are debited for those returns. Of course, returns are a fact of life in the book biz. But Audible-ACX's Premium Plus program--a relatively new membership category that allows readers to make unlimited returns (for books not finished) and exchanges (for books fully read), no questions asked--aggressively promotes returns and exchanges as a reader benefit, likely incentivizing readers to do so.

Hiding returns under sales also prevents authors from getting an accurate picture of how their books are doing in the marketplace. If your sales figure is zero, you can't know if it's zero because you've sold no books or because sales and returns cancel each other out. If your sales figure is ten, how many returns--if any--are included? If your sales figure is -5, does that mean five returns total, or were there even more returns that were offset by sales--sales you'll never be able to count because of the aggregate accounting? All of this is information authors need to assess and plan important things like marketing strategies. 

More generally, an unlimited returns policy lends itself to abuse. Readers can, for instance, use the monthly credit they receive with their Audible memberships to download and return multiple audiobooks--without paying for any of them. For example, an author who joined Audible as a new customer in order to test the system was able to download and return more than 20 audiobooks in just three days, using the same customer credit. Readers can also load up their devices with multiple books, and then return those books en masse, without penalty, when they don't have time to read them. 

In the Facebook group where Audible-ACX authors have gathered to share information and experiences, there's discussion of these and other abuses.

Because of the way Audible-ACX treats returns, authors weren't aware of the scale of the problem until this past October, when a technical glitch caused three weeks of returns to be recorded in one day. Suddenly, the returns that had been largely camouflaged by sales when reported on a day-by-day basis sprang into glaring view.  

Since then, authors have been emailing Audible-ACX to ask for their returns data, to request that returns be broken out separately from sales, and to request that at least some limits be imposed on returns. "Twenty or thirty odd percent of a book is enough to know if you like the narrator and want to continue," May writes. "This is the return policy we want implemented." 

Reportedly, Audible-ACX has responded only with "cookie-cutter" replies that ignore the requests. Amazon and its companies are famously black boxes, and frequently take unilateral actions they decline to explain. So this is about what you'd expect. But that doesn't make it right. 

Susan May and others are advising writers to put their audiobook projects on hold until Audible addresses the problems. In the meantime, the Authors Guild and the Alliance of Independent Authors are going to bat for Audible-ACX authors. ALLi has received a "we take your concerns very seriously" response from Audible, saying that they are "actively reviewing this policy with the feedback under consideration." Per a media release on November 19, ALLi has downgraded ACX from an "approved" service to "pending", until a satisfactory answer is provided.

For more reporting, see this post from Nate Hoffelder at The Digital Reader, this YouTube video from writer Daniel Greene, and this post from writer Kyle West. Or check out the #Audiblegate hashtag on Twitter.

Authors are welcome to join the Fair Deal for Rights Holders and Narrators Facebook group, where Audible-ACX authors and others have come together to try and work for change. Authors aren't the only ones who are affected: narrators who've accepted a profit share as payment are also losing income. 

Returns aren't the only issue with Audible-ACX, by the way. Susan May indicates in her post that there are substantial delays on approval of finished audiobooks (pre-dating the pandemic), and last year I wrote about problems with rights fraud and inexplicably withdrawn promotional codes. 

UPDATE: Authors Guild, SFWA, RWA, ALLi, Novelists Inc., and Dramatists Guild have jointly issued a letter to Audible’s CEO Bob Carrigan and General Counsel Stas Zakharenko, demanding that Audible end its practice of encouraging easy returns and exchanges. "This is not an exchange policy, but an unauthorized audiobook rental arrangement supported by authors’ reversed royalties, and it must stop." You can add your name to the letter here.

UPDATE 11/25/20: Audible has responded to authors' and narrators' concerns by announcing that as of January 1, 2021, ACX will begin paying royalties on titles returned more than 7 days after purchase. 

Notably, there's no mention of the accounting concerns outlined above, and the announcement includes a lengthy justification of the returns policy, along with a claim that returns abuse by customers is "extremely rare". 

The Authors Guild has updated its letter to Audible to respond to the policy change. 

At Publishing Perspectives, Porter Anderson has more responses from authors' groups, including ALLi and the Society of Authors.

UPDATE 11/27/20: Multiple members of the Fair Deal for Rights Holders and Narrators Facebook group are reporting that they've received this email from ACX, removing their titles from sale for "suspicious free trial activity":

Has ACX decided to deal with customer abuse by penalizing authors? If so, that would make absolutely zero sense, and be massively unfair. 

Stay tuned.

UPDATE 12/7/20: ALLi reports that it has gathered the following evidence, as part of its advocacy in this situation:
  • Proof that a listener can return 9 books using the button on the app with no interaction or oversight by Audible/ACX. After that, it is a simple matter to return more using email, chat, phone—all actively encouraged by Audible (and why not, when it doesn’t cocst them a penny). 
  • Recording of an Audible UK phone support where the first choice is PRESS ONE to exchange a book they haven’t enjoyed. It’s pretty bold. 
  • Folder of 49 return emails done on one credit. (This is the highest we’ve seen, to date, but that doesn’t mean there aren’t others who’ve done more). 
  • Correspondence between Audible and authors who have queried returns data showing threatening emails and account closures. Multiple authors have reported this happening. They have no right of reply and the emails are aggressive. 
  •  Reports from authors of being under investigation for “fraud" or "suspicious free trial activity" with their royalties withheld for months. They keep getting told that the investigation will end the following month and they’ll be paid but on it goes. One is reported to be owed since August, another owed $12K was never paid and has given up. In these cases, Audible is retaining the authors’ payments' on all books, not just the ones being “investigated".
UPDATE 1/20/21: Susan May is keeping tabs on #Audiblegate, and providing ongoing updates in her blog. Here's her latest post

UPDATE 1/21/21: ACX has announced that will share returns data with authors, starting in March 2021. Kudos to the activist authors and authors' groups whose continuing pressure achieved this result!

UPDATE 2/23/21: The Audiblegate campaign now has a public page on Facebook. You can also keep up with the latest news and updates at the Audiblegate website

UPDATE 3/22/21: ALLi has launched a petition to urge ACX Audible to:
- provide monthly returns statements for all books from date of publication
- pay for its unorthodox “returns and exchange” swap scheme from its own share of revenue
- pay compensation for monies wrongly debited from creator accounts via the secret returns accounting system
- Supply transparent, detailed payment reports going forward
- install an appeals mechanism for future high-level grievances to be dealt with by management and senior management in a timely manner
- correspond fairly and respectfully with authors who question payments, or whose accounts are closed /accused of fraud, etc.
You can add your name here.

UPDATE 7/28/21: The latest news from Susan May:

Read the rest here.

UPDATE 8/30/21: Via their own publishing corporations, two authors have launched a class action lawsuit against Audible for unpaid royalties. I'm told that this is the first of several suits that will drop in the next few months.
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