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AUDIOBOOK BUSINESS
Audiobook Narrator: Can A Rights Holder Buy
Out Your ACX Royalty Share Or RS+ Contract?

Note: This article originally appeared in the Knowledge Base of NarratorsRoadmap.com.

By Karen Commins
Audiobook Narrator, Producer & Publisher

Sometimes, the rights holder (RH) of an audiobook created under an ACX (Audiobook Creation Exchange) Royalty Share (RS) or Royalty Share Plus (RS+) contract will want to dissolve the contract after the audiobook is on sale.

In many cases, the sales have been better than the RH expected, and they would like to receive all royalties rather than split them with the narrator.

In other situations, the RH wants to distribute their audiobook on other platforms.

With an RS or RS+ contract, they are locked into Exclusive Distribution with Audible through the initial 7-year distribution term. The only way to break an RS/RS+ contract with the narrator is to pull the book.

The RH cannot take that action without the narrator's consent.

If an RH approaches you and asks you to dissolve the contract, be aware that the decision rests completely with you. You have no obligation to terminate the contract.

Observe how you feel. What does your gut tell you to do - retain the contract or release the RH from it? Listen to your intuition because it will give you correct guidance.

If you decide you are willing to terminate the contract, the RH should buy out your share.

Skilled negotiators ask the other side to go first. I therefore would request the RH make me an offer of fair compensation for the termination fee. Of course, my idea of "fair" and theirs might differ!

COMPUTE YOUR COMPENSATION

I'd average the monthly royalties earned thus far for the audiobook, and multiply those amounts by the number of months remaining in the contract to estimate what I might expect to earn over the contract life.
  • How do those numbers compare to your PFH (Per Finished Hour) rate multiplied by finished time for each book?
  • If the guestimated royalties would be greater, use that number as a base. Otherwise, use your PFH rate.
  • Have you earned back your production costs, such as your editor's and proofer's fees? If not, add any unrecouped expenses to your figure.
  • I would also add in the cost of any attorney fees for this transaction. (You typically won't need an attorney for contract termination.)
Finally, if the author has earned some sort of bestselling designation (NY Times, USA Today, etc.) and/or is prolific with more books coming out, I'd add an arbitrary figure to compensate for the loss of the prestige of having her books in my portfolio.

Tally all of these figures together to determine a reasonable counter offer. Know the minimum you would accept, because the RH would likely try to negotiate you down.

AND INFORM ACX

You must use the ACX message system as the official record of your communications regarding changes to the project.

This page on the ACX site shows how to communicate with the RH. The video on that page only concerns books still in production, but the process would be the same for completed audiobooks that are for sale.
As an aside, I want to point out that the ACX page links to the Production Standard Terms, which is your contract. This page is also linked on your project. On your Completed Projects tab, each book that says "Accepted as a Royalty Share deal" to the right of the cover art includes the Production Standard Terms.
This ACX Help page lists the steps for notifying ACX about contract dissolution for RS/RS+ books that are for sale. The language indicates that Audible reserves the right to say no to the request.

Be sure that both you and the RH write to Info@ACX.com and outline your agreement about contract dissolution.
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ABOUT KAREN
Karen Commins is an award-winning audiobook narrator, producer, publisher, and leading curator of info about the audiobook industry. She is a five-time audiobook juror for the Voice Arts Awards competitions and has spoken about audiobook creation and marketing at VOAtlanta, on ACX University, and on several podcasts. After years of helping narrators on their journeys through her articles, videos, online advice, and private consultations, in 2019 Karen launched NarratorsRoadmap.com. This site is THE destination for narrators of all levels, with a knowledge base, videos, and an incredible number of resource links.



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Comments (2)
Ryan Duncan
10/20/2020 at 5:31 PM
This is a very useful theoretical situation. Thanks for the great insight. I also couldn't help to consider any producer's social media marketing as part of the cost analysis calculation. In the "grass roots" style production model of ACX, it seems that effort and time to promote a book is also a valued factor.
Michael Cyll
10/20/2020 at 2:27 PM
Great article very helpful.
Thank you.
Best regards,
Michael P Cyll
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