Although I am not a big reader of romance, I have followed KU's business model closely, so have been fascinated to see how Audible went with a similar subscription model for romance audiobooks. The service as I understand it divides an Amazon allocated pool according to minutes read. Payments are quarterly, the first in February with the next due in May. The heading says it all about the first payment. 57 cents for a 10 hour audiobook. Needless to say, outrage was the result. So much so that Audible has made extra payments on some undisclosed basis, but has not so far resolved the matter, admitting in a letter to authors that "consumption patterns have challenged our original economic model for the service."
Nate at the Digital Reader has posted a good summary of what is happening
HERE
I find this fascinating for a number of reasons, incluging that I find it diffiecult to envisage what a solution might look like. Audible romance has adopted a KU type subscription model. KU has been successful because it has been able to exercise control of its costs. Authors have been prepared to trust Amazon by enrolling their books in KU and leaving the amount of remuneration to be paid at Amazon's discretion. This trust is balanced by the ease of withdrawing books from KU, which is a powerful incentive for Amazon to try to get the balance between themselves, authors and readers right. This is probably the main risk to Amazon in KU, and the most likely way for KU to fail. Authors place a great deal of trust in Amazon and if Amazon is perceived to have betrayed that trust the whole concept will quickly cease to be viable.
I suspect Audible is being honest when they write that they "recognize that these impressive consumption patterns have challenged our original economic model for the service." In other words, subscribers are listening too much! I suspect that their economic model has been based on KU, and the response to Audible romance have blown these figures out of the water. I can guess at a couple of reasons why. Firstly, romance readers do so voraciously, as other subscription services have found out to their cost. And audiobooks are far more "accessible" than ebooks, in the sense that they do not demand a listener's exclusive attention. I have listened to Audiobooks in the car, on the train, bus, tram, plane, waiting at the airport, whilst using my computer and/or the Internet, whilst exercising or sometimes simply when I'm enjoying a walk. Finally, the result of these two factors is, I suspect, that Audible Romance listeners are taking full advantage of their subscription, unlike KU in which I think many subscribers do not take full advantage of the service and thus effectively subsidise those who do.
Audible is not doing itself any favours by delaying an effective response. This is a real challenge to its business model. Whilst it is considering what to do it may be well advised to allocate a far larger pool, even if it leads to a loss on the service. I would not be surprised if Audible ultimately abandons this service, or at least experiments with a higher subscription fee. However, if it does not handle this situation property and loses the Trust of its authors the implications may carry over beyond Audible to Amazon itself and KU.