Don Katz, interviewed by Dawn Raffel
The CEO of Audible on the future of audio—and the non-future of the middleman
In April, Amazon’s Audible.com earmarked $20 million for an unorthodox program called Author Services: Writers who register not only get help promoting their audio books but also receive a $1 honorarium for each sale. What has people talking—and in some cases raising their eyebrows—is that the “incentive” payment goes straight to the author, bypassing the agent and publisher.
I recently spoke with Audible founder and CEO Don Katz about the rationale for the no-middleman-model, what authors need to know about audio, and the sea changes he’s seen in publishing since his years as a journalist. Prior to starting Audible in 1995, Katz had a twenty-year run reporting for publications such as Rolling Stone, Esquire, and Sports Illustrated, and also wrote books, including two about huge corporations. He cites Ralph Ellison as his writing mentor, and told me that Author Services was inspired in part by a model used by Reader’s Digest, which paid authors directly for reprints, and in part by new technology. I asked:
What did you see in the emerging technology?
I became aware in 2005 that technology was empowering authors to go way beyond what my participation had been in selling my books [The Big Store: Inside the Crisis and Revolution at Sears; Home Fires: An Intimate Portrait of One Middle-Class Family in Postwar America; and Just Do It: The Nike Spirit in the Corporate World]. I would go on these 12-and-14-city book tours, and I was incredibly active. I’d go in every store, turn the books face-out, sign everything. I always picked out the guy in the indie store with the ponytail and the granny glasses to sit down and talk to because I knew that was the person everybody looked to for a recommendation. It was a lot of on-the-ground work when the world was physical.
But in 2005 I got a call from Neil Gaiman, the writer. He basically said, "Watch this." At that point he had such a large e-mail following (this was pre-social media) that he sent out a single e-mail and moved his book American Gods from about 60th on our bestseller list to number one. I remember thinking, "Oh, my God. That's incredible." Then I watched him build up a vast blog following and now, 1.7 million Twitter followers.
He knew how to do this because he came out of comics, which always had a fan base connection. You had to create your own fans if you were going to differentiate from all the other good writing and drawing. Neil is now the editor of a label here. By working with us, he creates four and five times more sales of his books than we’d get through our normal merchandising and marketing.
A year ago, I said to the Board of the Author's Guild, "Look, we're all the same age. We're all coming out of the Esquire, Rolling Stone era. We need to tell young writers that the era of being Victorians living above the marketplace and expecting intermediaries to do our work is over. We need to take as much responsibility for our economic lives as a cabaret singer, at least fill the room. At least get your friends to buy the damn thing." Otherwise, you get to say you've earned your poverty. And unfortunately I don't think a lot of the organizations [for writers] are being very helpful. Spending all your time demonizing the latest distributor is like a sport. It's been going on since the paperback was controversial in the '20's.
I remember listening to a panel of very esteemed writers in the late 80s. They were talking about how word processing was the devil and it was going to be the death of literature.
You know what? It did change literature. It really did. There's no question, from the plume pen to the fountain pen to the typewriter to word processing, it definitely had an effect. The idea of composing a sentence knowing that you have to pull something out of the typewriter and retype it, versus backspacing on a Selectric, versus completely erasing it like it never existed; I do think it affects prose.
But from the distributive end the fact is, the book club, the super store, the warehouser, and Amazon were all invented outside the publishing industry. And they were all demonized.
I’d like to talk specifically about audio books. Now I see authors on Facebook and Twitter and Pinterest publicizing the hell out of their books. But I have to say I have not seen a lot of authors out there promoting audio books.
Right. I think that's a sad lack of awareness, which is one of the other ulterior motives to Author Services. There's nothing growing faster than the audio book segment, and it's frankly Audible, and people don't like that. I'm not going to be embarrassed by the fact that we've transformed a category. Our average member, and there are millions of them, takes 19 books a year.
So what we've done is taken a sidecar business—buy a set of tapes for a ridiculous price because you want to keep the kids quiet on a vacation—and turned it into a literary and emotional and intellectual experience that people have every single day because there are all these times you can't read or look at a screen. We’ve rewritten how audio works. It never had any reason to be in a physical format. It was ridiculously expensive and inefficient.
Everybody's lit up about Audible, from customers to actors—but the authors are frankly just sitting there not very aware. Witness the fact that the vast majority of the midlist and the new books being published never go to audio. We’ve had to become the largest producer of audio in the world because we couldn't get traditional supply to keep up with our growth.
Authors don’t understand that they have a really valuable right that nobody's exploiting for them. So we started this thing last year called Audio Book Creation Exchange [ACX]. It's a very sophisticated platform where authors can post unexploited audio rights. Then they're either bought by a third-party publisher, or a whole bank of actors and studios and engineers will bid to make the audio. There's even a sweat equity piece where you can split royalties with the narrator and have no money exchange hands. Most authors didn't even hear about this. For most midlist books, the publishers demand all these rights and the agents don't necessarily fight very hard. There are all these rights sitting there that just aren't exploited.
I noticed you're also opening up the program to self-published, or “indie” authors.
We just started that. Look, self-published authors understand this kind of self-reliance. Some of them, when they get more successful, want to be part of the “normal” publishing universe, which usually means an advance.
But you know, now I'm seeing previously midlist authors who've been pushed out and are starting to look at self-publishing and branding themselves as groups.
Right. What we're doing is just intercepting [all types of] authors. Ann Tyler's in now, and Margaret Atwood, and Michael Pollan. And we’ve got Kate Winslet and Dustin Hoffman and Colin Firth, and all kinds of people doing our audio books. We're hundreds and hundreds of millions of dollar of revenue, and people don't really know.
No, they don't.
Working with publishers and trying to work with agents and just having the authors in caves has been totally frustrating to me because I'm an author at heart. I was on this panel in London and it got very controversial. This one publisher chose to try to attack me for having the gall to pay authors directly, which I thought was kind of daring of him because it's not a particularly defensible viewpoint unless you're trying to say, "Well, that's bad for us [publishers] because we want authors to believe we'll do everything for them."
So I said, "As far as I know the Author's Guild average income, last I checked, was $6,000 per professional author.” And a guy at the other end of the panel said, "Well, in the UK last year's stats were £4,000." I mean, it's not a particularly good living. It had better be a labor of love, but it shouldn’t be more monk-like than it needs to be. The world is changing. The only people who really matter are the professional creators. In our case, it's the actor and the author, and then the listener/reader. It's an honor to sit in between those two poles. And if you don't add value you need to get out of the way!
So I have to ask—are you going to write another book?
I like the idea that there's no retirement age for a writer, and I wake up in the morning and I still think, I'll think of something. You know that feeling when you have knocked off a set of sentences and you're excited, that physical rush you get when you hit something you're proud of. There's nothing like it.
But I’ve decided to ride with this and see it through. Most founders like me are long gone from companies this big. It's almost never the case that founders stay, except for maybe Bill Gates and Jeff Bezos and Steve Jobs, all of whom I had deep relationships with. Each of them played a huge part in Audible's success. What I like about this is it's creative and collegial. And I thought after twenty years of writing every day, as much as I got to go around and meet the most powerful and dangerous and interesting people, it is ultimately a lone wolf thing.
My mentor, Ralph Ellison, taught me in college and was part of my life until he died. He was a complete student of vernacular culture and how that informed the character of American literature. I always felt like audio was at the core of how music in language is supposed to be perceived. I always liked seeing a novel as the ultimate script, refracted through artful performance.
Don Katz is the founder and CEO of Audible.com. He is the author of Home Fires: An Intimate Portrait of One Middle-Class Family in Postwar America, The Big Store: Inside the Crisis and Revolution at Sears, and Just Do It: The Nike Spirit in the Corporate World. Before founding Audible, Katz was a contributing editor at Rolling Stone, Sports Illustrated, Esquire, and Worth.