Audible has been the exclusive provider for audiobooks on the Apple platform since 2003. Whenever you browsed iTunes and then iBooks, all of the audio editions that were listed all stemmed from the same provider. This partnership recently came under fire from the German Publishing Association and after a year of discussions with the European Commission, Apple and Amazon have agreed to terminate their existing deal.
At the time of the complaint in November 2015, Alexander Skipis, the head of the German Book Trade body, said: “The business model of Amazon and Audible is aimed at destroying the excellent book trade structure in Germany. These companies are avowedly on the way to establish a monopoly.” He went on to say that Audibles dominant market position to force publishers to accept “unreasonable conditions.”
In its statement, Bundeskartellamt president Andreas Mundt echoed the European Commission and praised the joint moves of both companies. “With the deletion of the exclusivity agreement Apple will now have the opportunity to purchase digital audiobooks from other suppliers. This will enable a wider range of offer and lower prices for consumers,” Mundt said. “After conducting intensive market investigations and due to the close cooperation with the European Commission in this case, the Bundeskartellamt was able to close these proceedings without a formal decision.”
There are a few reasons why the German publishing industry cracked down on Apple and Audible. The main reason is that in Germany these two companies have corner stoned the market and represent 90% of all audiobook sales. Audible also basically invented the audiobook format and many publishers turn to the Amazon owned company to distribute their titles to the widest possible network. The final reason is author royalties, there is no set in stone royalty rate for publishers, authors and people who use the ACX platform to self-publish titles.
I have serious reservations that Apple will truly start to source audiobooks from anywhere else, other than Audible. Apple will likely have to create a totally new submission system and integrate it directly into iBooks. Consumers are the ones who might benefit from this deal, as audiobook prices will come down due to the rise of competition among providers. Remember, audiobooks do not abide by agency pricing, so retailers can discount them and take a loss.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.