Episode 24: Cory Verner on the Growth of Audiobooks

Cory Verner is the CEO of ONE Audiobooks, a publisher of audiobooks and a turnkey audio services provider. Cory has been working in the audiobooks industry for over 20 years, and has seen the changes in technology, the changes in focus, and the growth in sales as the format has taken off in the last 6-7 years. Cory and I talk about some of the reasons for that growth, the demographics of listeners, and some specific differences between the Inspirational Books market that he is closely connected to compared to the general audiobooks market.

We also talk about how the audiobooks industry has changed over time, including technology changes that have driven much of the recent growth, and we discuss the risks publishers take on when they create their own audiobook program.

You can learn more about ONE Audiobooks at oneaudiobooks.com (corporate site) and oneaudiobooks.app (customer engagement tools).

Transcript

Joshua Tallent 

On this week’s episode of the BookSmarts podcast, I’m excited to have Corey Verner, the CEO of ONE Audiobooks, which is a publisher of audiobooks and a turnkey audio services provider for the publishing industry, joining me today. So Corey, thanks for joining me.

Cory Verner 

Thanks for having me, Joshua. Appreciate it.

Joshua Tallent 

It’s great. We go a long way back. I think I’ve known you for quite a few years, lots of connections in the ECPA community and other places. So it’s, it’s great to have a chance to chat with you about audiobooks and kind of where things are. I just wanted to start off, you know, for people who are interested in audiobooks—and obviously we see a lot of things happening in the audiobook world over the last couple of years—what’s the current state? What’s the state of affairs for audiobooks, right now, you know, who’s listening? How many people are listening? That kind of stuff that you think is important?

Cory Verner 

Yeah, sure. I think that’s a great place to start. Um, we’ve obviously seen really, really significant growth in the last decade. I think it was probably six or eight years ago, when we started seeing double-digit growth. And in some cases, well, well over 10%. And it really surprised a lot of people. Because audio had been growing, but very slowly, for a long time. So we were, we were gaining listeners, but it wasn’t happening quickly. And then there’s a confluence of several things that happen at once. Obviously, smartphones, and then apps, and then awareness started coming. And then about 1000, other things started competing with reading books. So that was really the biggest thing, in my opinion is: everybody knows they should read, they want to read, they think it’s important. They think it’ll help them and change their life. But finding time anymore with the competition that you have—I mean, binge-watching Netflix, or you know, basically doing work on your, your phone, or whatever it is. So audio is kind of that one thing where you can do it when you’re doing other things. I have to drive somewhere I can listen to an audiobook or a podcast. I, I have to wash the dishes, I have to wash my dog, I have to mow the yard, I have to go to sleep—people listen while they fall asleep. So the biggest trend, which shocked me—it’s probably seven or eight years ago, the first time I saw this on the sales surveys—was people who were saying that they mainly listen, when they were relaxing at home. And it used to be that people would say they did it on their commute. And when I saw that, for the first time, I was like, what is that? And are you sure it’s right. I actually talked to the people who ran the surveys, like, Are you sure that’s right. And so over time, it just made sense. It’s like, it’s really like I’m taking a walk around my neighborhood or I’m taking a walk around my office, it’s not really relaxing at home, it’s just I’m using—I’m filling in all the margins with audiobooks. And so we’re, we’re still seeing every year double, you know, double-digit, you know, growth. And COVID was a really big boom, too, because people had a lot more time. So we saw explosive audiobook growth during that time, which has since come down, I mean, it was a little bit of a spike, and then we’ve settled back into a little bit of normal.

Joshua Tallent 

Yeah, that makes sense. I listen to a ton of audiobooks myself, and they compete—with me they compete on with podcasts. And I found myself over the last couple of years just thinking man, I want fewer news podcasts and more audiobooks. I feel like that’s a that’s a good thing for my soul in some ways. So who’s listening, though? I mean, I’m in a kind of a weird demographic, mid 40s. I guess I’m kind of at the tail end of Gen X. And I fit well with some of that. But I’m wondering who’s watching—who’s listening the most and kind of where the demographics are along the board?

Cory Verner 

Yeah. Well, I’ll start with who’s not listening, because there is one group not listening, and that is Gen Z. Interestingly enough, five years ago, I used to say that about millennials, and now they’re the strongest category. So the strongest category in audio books is the millennial. That’s where all the growth is right now. Not all but it’s a significant portion of the growth is with that market, which to me is really surprising. And when I saw the data, I was sort of skeptical of it. But that’s that’s—So in terms of demographics, Everyone is listening right now. Except for Gen Z, as I said, and it’s pretty much looks like a pie chart, like a pizza sliced evenly. So everybody’s listening. Where it gets interesting is when you start looking at usage and how many books people listen to, then the under 40 crowd, Xers and Millennials blow everybody else away. They’re listening at incredibly high levels. And anecdotally, when I talk to Publishers, Books that are targeted, millennials do 50% sales in audio. So it’s really serious in certain categories and self-help is happens to be the category that we most spend most of our time in—nonfiction, self-help, the religious market, you know, Christian titles, that market is, has the highest preference for audio as a format. So when you start looking at like, let’s say you’re trying to target, say, leaders, younger leaders or influencers or podcasters, I mean, audio is going to be your primary source to get the word out and to get engagement.

Joshua Tallent 

Yeah, that makes sense. So what types of audio books then are doing well?

Cory Verner 

That’s a really interesting question. And one of the things that’s fascinating is our market, what does well doesn’t do well in the general market. So we primarily in the inspirational market—and just, you know, as an example, one of the weakest categories in our market is YA fiction, it’s probably the weakest category behind reference. So reference obviously, is not a great audio format, although people are doing it now and selling books, believe it or not, but that used to be the worst, but YA was the worst, then that happens to be the best category in the general market. So you have to sort of think about which—who’s your market, that’s part of it. So I’ll give you another example. The market is 75% fiction. But in the inspirational market, self-help market it’s 75%. nonfiction. Yeah, so it’s exactly flipped in a lot of categories. In the regular market. Fiction does extremely well, but it has a short tail. Nonfiction is kind of where a lot of the growth is—you’re seeing a lot of the growth, and you has a really good tail. So although you get a good hit off of the fiction, I think nonfiction is a great place to be because you know, it’s—you don’t have this big spike of sales, and then very few sales after that, which is what we see a lot in fiction, especially in faith, the faith based market, we see that a lot.

Joshua Tallent 

Yeah. That’s interesting to me to think about YA, you know, YA fiction tends to be a lot of adults reading that kind of content, too. It’s not, it’s not, you know, a lot of teenagers buying audiobooks, for sure buying books, even in general, it’s mostly their parents. So that’s an interesting, interesting kind of variable there. Yeah. And your point is well made for those who listen to the podcast a lot, we have conversations with nonfiction publishers pretty often here and had one with—I keep bringing him up—Todd Sattersten over at Bard Press publishes nonfiction business books, and does like one book a year. And his approach to publishing is pretty unique and pretty interesting. But it’s also very much a long tail business. You look at, you know, where the sales are, it’s all about backlist. It’s not necessarily about what’s on the frontlist. And you build a market for a book over time. So that’s—it’s interesting to see and good to see as well that at least in your part of the market, in the inspirational part of the market, that’s also the case that there’s a there’s a good case to be made for, you know, this kind of book, this kind of nonfiction inspirational book is going to have a good long tail in the audio space as well, not just in the in the print book space.

Cory Verner 

Yeah. And you know, I have a 20-year history, I started a company that only did backlist for seven years. We bought basically the entire kind of evergreen Christian in the Christian market—1000s of titles. And most of those titles were still selling 10, 15, 20 years later, which was really shocking to me. Because you know, you’re thinking you’re trying to just recoup, that was the goal back then, just basically make your money back. That was all—that was what we were trying to do. There weren’t a lot of sales, obviously. When I got in, in 2003, into the market, it was 95% cassette tapes. And there were no downloads. And so at all—there was no obviously iPod, so that was part of the the issue. It was it was very technical to get a book on your device, you know, and there was discussions of which format would win: MP3 or Ogg Vorbis. You know?

Joshua Tallent 

Right, yeah! Yeah, I remember that? And that’s, that’s the same thing in the ebook space, you know, is it EPUB or Kindle or, you know, the old Microsoft format. There’s a whole bunch of, a bunch of fun things that have thankfully left the, left the building. Exactly. Yeah. So what’s changing today? Like, if you look at the audiobook industry, what do you think is changing the most? And where do you think publishers need to be aware of you know—that thing is coming? Six months, a year, two years down the line?

Cory Verner 

Yeah, that no, that’s there’s a lot changing. And it’s changing quickly, I’ll go over some really high level trends. One is production is getting more difficult and more expensive, because we’ve—we’re doing like, somewhere around 25 times more books than we were when I started. So you know, 100,000 titles a year as opposed to 5,000 titles a year or something, you know, whatever that is. I don’t know what that ratio is. But it’s we’re doing many more titles. And so a lot, we all think of a lot of the same talent that we always have. So it’s really—you know, you’re waiting, you know, hey, can you read this book? I need six months. So we’ve been working on really expanding over the last few years our casting to really have a much better handle on say, not just 100 narrators, but 400 or 500 narrators who read nonfiction, because casting is kind of where you get the biggest bang for your buck in production. And it’s the hardest part of the process now where it used to be really easy, because everybody was free, you just look on Audible and see who read their book the last time and that was your casting decision. And I would have people say, Hey, I’d like to read for you. And I’d be like, I don’t really need anybody. That’s I, you know, unless you’ve read 100 books, I really didn’t talk to anybody. And obviously, now every day, I’m attending every speed dating session at APAC, and I’m talking to everybody I can, every time someone sends I’m listening to samples, and you know, it, we’re really trying to expand that, because we see, it’s only going to get worse in terms of production. So that’s one trend. Another is the dominance of a big publisher, and a e-tailer/retailer that maybe a lot of us know about, the biggest one, I won’t mention the name. But many of you will know who they are, they’re losing dominance very quickly, which excites me, because they’re not very generous. And so it’s, we see a lot of growth in the library market, explosive growth, all-you-can-eat—which publishers are resistant to all-you-can-eat models, but we see a lot of growth there. And internationally, we see channels you’ve never heard of that are 90% of the business. So you know, there’s a lot of international growth. There’s growth in you know, ala carte with like, Chirp and BookBub. And they’re, they’re killing it. And in our market, inspirational market, we’ve we’re ramping up new channels that are doing very well, that essentially, you know, we’re kind of one of the main ways to get there as a distributor, because we only focus on inspirational market. So that’s interesting to have new channels where you can move hundreds or thousands of units with a promotion and didn’t exist two years ago. And there’s a lot of that happening, which is exciting, but also kind of tough to navigate if you’re a publisher, and you’re like, Okay, how do I how do I navigate this? Do I just go direct with ACX? Well—you know, —that’s like half the business now for a lot of publishers, so that’s a trend. And I would say the last trend is author reads are just exploding. I would—maybe 40% of what we do—we have an author, we have authors in our studio—I’m in one of our studios, here in San Diego, and we have next door two authors, we just got going for a multicast, you know, dual author read. That would have never happened five years ago. We were at conferences teaching you how to, you know, avoid author reads. Like, I spoke on a panel how to avoid author reads one time, like six years ago. So now it’s like we do 150 of those a year. And it’s—I think everybody’s feeling that. And author reads are way more challenging, there’s way more room for error, and you have failed projects way more often. So a lot of risk mitigation, and a lot of, you know, vetting studios, vetting engineers, vetting even the author, and then figuring out—they can be very expensive they can be—they’re actually a lot more expensive than a narrator read, which always surprises people than we quote them. Because you got studio fees, maybe the narrator’s reading at home and, and then you’ve got twice as much editing and the editing is the heavy lifting of the whole project, right? So you’ve just got all these issues that you run into with an author read, and they fail quite often. And so it’s disconcerting for publishers who jump in and think, oh, man, um, everybody’s upset. That’s no fun.

Joshua Tallent 

Yeah, no, that makes sense. And that’s, that’s interesting. You know, the, the technology obviously has changed over the years. And I think everybody’s talked about this, that you can record at home. And, you know, there’s, you know, you can have a decent setup as a narrator in your own—in your own home. And that’s, that’s something we didn’t have before, and I’m sure it’s helping with the production. Talk to me about other things you’re seeing on the production side. Is it getting easier to edit in general? Are the tools getting any better? Is the—Do you see anything coming down the pike where you’re thinking, okay, so, you know—like in the ebook spaces they always talk about, you know, some sort of other, you know, additional enhancement to an ebook, are we seeing that kind of—like things, technologies or ideas coming down the pike that you think publishers should be aware of?

Cory Verner 

Well, some of the software’s getting better. So I would say you can, you can use like RX and other tools to solve issues you couldn’t solve before. Like, let’s say you have an author with a incredible amount of mouth noise, and you’ve basically re-mic’ed them three times you’ve changed mics, now you’re micing them from across the booth with a shotgun mic—you’re doing, you’ve done everything you can do and you’re still can’t, you’ve got something that you couldn’t process out well, before you had to live with it. The tools are getting better to fix issues like that, you know, fix problems with you know, buzzes, hums, whatever. Really, really smacky, moist voices, whatever. But the problem is the editing is like 3 hours to every finished hour to 5 hours for every finished hour—if you’re good at it. And that hasn’t changed in 20 years. So it’s kind of hard to—it’s hard to get a lot of the fluff out. I mean, we have a very streamlined production process, you know, we produce about 35 books a month. So, to do that we have a lot of editors and proofers. And we do a lot of research up front, and we do a lot to streamline that process. But the bottleneck is always the editors. And finding good editors is getting harder because it’s just, uh, it’s pretty nuanced work, it’s fairly technical, it takes a really detail oriented person. And then, you know, on the mastering side, some people can maybe get the editing, but they take a long time to get good at the mastering to really deliver stuff you have confidence in. And so that’s part of the part of the problem. So I haven’t, I would say, you know, narrators are getting more expensive, editing is getting more expensive for us because labor’s a lot higher, it’s like 50%, higher than it was a few years ago because of inflation. So I don’t, I don’t see costs really going down. The only way that cost can go down is if you do like you said, you’re an author, you work in a home studio, and you do it yourself. I’m seeing a lot of that. The problem is that we get projects every day where people send them to us and say, Can you fix this, it didn’t get approved? Or can you—can we do this, and we listen, and we tell them, Hey, you, you’ve got a large audience. And this is way, way below what we would—industry standard, forget about what we would ever deliver, we wouldn’t put our name on this and tell anybody we did it. But so far below industry standard that that it may not—it may not even—you may do all the work and it doesn’t even pass. So that’s the challenge is that—The weird thing about audiobooks is it’s not like recording music, where it’s all about the gear, it’s about having a quiet space, you know, it’s about having a space where you can work all day without any outside noise getting in. And you can actually keep it cool enough to where someone can work in there without sweating. And you can have it treated so that the, so that you don’t have the reflection. So you get a really good and you got a low noise floor. And once you do that, I don’t care what mic—you can put any mic in there, it doesn’t matter. I can record with my iPhone in a room and it sounds pretty good. But an author usually doesn’t have that. Even if you’re in a closet, those are really funky spaces and a lot of times they’re not quiet. We actually do a lot of remote reads for publishers when they send us—especially during COVID. And we’ll be in an in a house, the person’s reading in the closet, the whole house is locked down like the person—the gal’s calling and yelling and everybody for using the restroom, you know, it’s just miserable. This is just not fun, you know, so you really need a space for it.

Joshua Tallent 

Yeah. And publishers need a space as well. And you think about you know, a lot of publishers are trying to get into audiobooks now and have been for the last couple of years, they see the growth, they know they need to do it, it ends up being—you know, I think one of two things in many cases, one, they outsource it or license it out, and they just have somebody else take care of the whole thing. And that’s, that’s an easy approach. Another thing, obviously, is try to do it yourself. And so you start building some sort of internal team to, to do that editing process and define—you know, start build out your own internal thing. So when you think about this, from the perspective of publisher, what are the risks in terms of producing your own your own DIY audio books?

Cory Verner 

Yeah, well, we talked about some of them there, there are risks in terms of production. I think the other risk is—so let’s say, let’s say that audio is 10% of your revenue, or 8%-12%. For the bigger publishers is probably more like 15% to 20%. But they have unique circumstances which we don’t, I don’t think in 20 minutes, we’d have time to go into it. But the bigger publishers are going to, they’re going to have a higher percentage of actual revenue that’s audio and the smaller ones are not. But if it’s 8% of your revenue, it’s tough to ramp up a team. And so that’s where, you know, with the company, we started, ONE Audiobooks, we saw that as being a big problem, where we know—we were telling publishers to keep rights because this is going to be 30% of your revenue within decade. And this is about three or four years ago, I started telling people that, and we’re—I think we’re still on track within the next three to five years to be 30% of revenue. This doesn’t seem to be slowing down, it hasn’t in 10 years. So I think at that point you have to have you have to do it internally, manage costs, get the highest royalty you can. So what we’re kind of do—we decided to do was do like a stop gap. We don’t expect this model to last forever. But for now, let’s help publishers—you know, we run programs for 20-30 publishers. We just run the program. We do consulting, casting, production, distribution, sales and marketing—so we have a marketing team that markets them and then we have a series of apps that help with customer engagement, list-building, direct selling, running pre-order campaigns. So it’s a pretty turnkey, and pretty comprehensive service that we’re offering, and that’s why we had a lot of publishers move over to it. But I don’t—I don’t—I—you kind of need to reinvent yourself in audiobooks every three to five years I feel like. Like I remember when I got in it was 95% cassettes. Well, then it was 90% CDs, and like five years later, it was like—or seven years later was 90% download. So we replaced three formats in 10 years, it was crazy to try to keep up with that. And so audio, you know—new media is like this in general—it’s changing so fast, I think you just, you need a short term plan. And so we try to help publishers keep rights, that’s a big part of what we do. We do buy rights, we publish a lot of books on you know, as a publisher. If a publisher wants to sell rights, we’ll buy rights—for our market, for the inspirational market. But a lot of the publishers really do see this as being strategic. And so it’s important. So I think the big risk is, we’ve had publishers do this, where they said, We’re going to do it in house, and they hire someone full time. And that person’s like, I can produce three books, but I have eight a season, so they give us the other five. I’ve had those kinds of situations happen. It’s really hard. You know, we have a pretty large staff—we have 16 internal and then an army of contractors that we built over, you know, 20 years or whatever. And so it’s pretty hard to scale it unless you really want to—you really have to put a lot into it and sort of lose, lose some money on it to grow that. Because you’re putting so much into obviously administration and stuff.

Joshua Tallent 

Yeah, that makes a lot of sense. Corey, this has been great. I love talking to you about audiobooks, I think we might bring you back on again and talk some more. But you know, where can people find out more about the work that you’re doing at ONE Audiobooks?

Cory Verner 

Well, we have we have two sites. Yeah, and let me also say, I’ve always enjoyed being on panels with you, and I’ve always—I followed your work for a long time. And I you know, whenever anyone asks me about ebooks, you know, your name’s the person—the name I give them, you know. I don’t know anything about ebooks, talk to this guy. That happens with me with audiobooks sometimes as well. No, I appreciate you having me on. I think, I think that yeah, next time, it would be nice to talk about customer engagement, marketing, what’s happening with launching audiobooks, it’s probably another good conversation to have at some point, because there’s a lot of things changing there. It’s a rapidly evolving, sort of moving target. But you can find us at oneaudiobooks.com. That’s our corporate site where you can kind of read about what we do. If you’d like to learn more about our customer engagement tools, go to oneaudiobooks.app. And there’s a—there’s a basically a publisher tab, you can go on there, and you can look and see what we’re doing for publishers to help them with audio book engagement on the on the marketing side and customer engagement side.

Joshua Tallent 

Awesome. Great, I’ll put those links in the show notes as well. And so thanks a lot for joining me and we’ll, we’ll talk to you again very soon. Thanks for listening to this episode of the BookSmarts podcast. If you like what you’ve heard, please leave a review in Apple or Spotify or wherever you listen to the podcast. And, you know, take a minute and let us know what you think about the show. You can email me at joshua@firebrandtech.com. We’d love to hear your ideas and thoughts about other people to interview and other topics to discuss. We hope that you enjoyed the episode and we’ll see you again in the future. Thanks for joining us and getting smarter about your books.