Why are audiobooks priced the way they are?

If you’re an Audible member, you can skip this part, but it’s an interesting sidebar on why the book is priced how it is. The stock answer combines what the publisher thinks it’s worth – I have total control as the publisher – and what other history books go for – aka the competition. That dynamic is partly true, but Audible is a unique case.

When you subscribe to Audible, you purchase credits redeemable for audiobooks. (You can also buy additional credits, but your membership includes one monthly credit.) 

It’s pretty simple: Your $16/month subscription nets you one credit. One credit = one audiobook. It’s more like the old iTunes service ($0.99 per song) than Apple Music or Spotify. An audiobook should cost about $16. Oddly enough, if you care to look, most audiobooks cost more. Why is that?

Think about it. If I price my audiobook at $19.99, you can still get that book for one credit – or $16 – about a 25% discount. The higher the price, the bigger the perceived value. Using credits makes you feel like you’re getting a bargain. It’s the same reason jewelry stores always seem to have 50% off sales. The same psychology works there too. American consumers love a deal.

So, where can that go wrong? See if you can notice the problem in the pricing strategy for Tyson’s latest.

Audible example

 

 

Here’s the thing. If you’re not careful, you can overpay. How? Let’s say a publisher prices an audiobook at $10.63, as in the example above. If you “buy with a credit,” you’re essentially overpaying for that book. You can see the prices easily on the desktop version of Audible’s site, and you can choose to pay “cash” for that book instead of using one of your credits. However, it’s not as though they show you the cost of your credit right next to the cash price, so it’s easy to slip up. It’s even easier to impulse-click on the app (especially on iOS) because Amazon (Audible’s owner) doesn’t want to pay Apple’s 30% App Store commission and won’t allow you to pay cash. You can only use your credit; they don’t even show you the price. In other words, be careful. About 1/3 of the books I buy are priced below the cost of a credit, so I always buy my audiobooks on the desktop interface.

Now you know.