Exclusive Vs. Non-Exclusive Finally Answered

A Case Study on Crowd-Sourced Stock Audio Libraries

 

About a year ago, I made the decision to start selling my recorded sound effects and music online as stock material.  After doing a bit of research, I discovered a growing trend in the industry focused around a type of online database known as crowd-sourced sound effects and music libraries.  While other established sound libraries are run by independent producers, maintain a hired staff, or have an extensive auditioning process for new artists, crowd-sourced stock libraries are generally easier and free to join, do not require an affiliation with a PRO, and provide a worldwide market of potential buyers to the artist at the price of a commission for each sale.  Thus, crowd-sourced stock libraries have a greater appeal to new or less-established independent artists.

There are several stock libraries available to choose from, AudioJungle, Pond5, AudioMicro, and ProductionTrax to name a few.  But with so many options available, the question that the independent artist is inevitably faced with is this: Do I sell my material exclusively through one company, or non-exclusively through many companies?  Before I continue, I have included a table [F1] detailing the pros and cons of these four companies.  Please refer to it as necessary to understand the factors of this case study.

Stock Audio Library Comparison Chart

FIGURE 1: Stock Audio Library Comparison Chart

 

I suspect that AudioJungle is the leader in this battle of exclusivity.  Other stock libraries offer a set royalty percentage for exclusive/non-exclusive accounts, or only offer a non-exclusive agreement.  AudioJungle, on the other hand, offers one of the most beneficial royalty rates in the market to its exclusive authors, currently 70% at the highest tier.  However, at only 33%, it also offers the lowest royalty percentage to its non-exclusive authors.

And so, given this information, we arrive at the ultimate question:

 “Do I really benefit from AudioJungle’s high exclusive royalty rate, or will I make more money selling on a non-exclusive agreement with multiple companies?

 

If you are at all like me, you have probably scoured the internet trying to find tangible information on this subject, but have either come up dry or with too many opinions to answer the question clearly.  It is a loaded question, and cannot be answered simply based on royalty percentages.  How well do other stock libraries sell?  Will AudioJungle outsell other libraries enough to compensate for choosing to sell exclusively?  Do some libraries cater to a particular type of sound effect?  I was at an impasse with my decision, and these questions needed answers.  With no viable proof at my disposal, I decided to conduct my own experiment and log my results as evidence.

THE EXPERIMENT

 

My experiment was designed to answer this question of exclusivity, focused around AudioJungle as the leader in exclusive royalty rates.  Bear with me, as my methods are hardly an exact science, but I’ll entertain the notion by following the scientific method along the way.

 Hypothesis

Based on my research and on a hunch, I suspect that selling non-exclusively through a number of sites will yield more income than selling exclusively through AudioJungle.  Crowd-sourced stock photo libraries, which are older and in much greater quantity than stock audio libraries, seem to operate primarily on a non-exclusive basis.  I believe that if the trend to go exclusive yielded a higher profit for the photographer, then the market would have gone that direction instead.

 Procedure

I will upload the same sound effects to each of these four stock libraries (AudioJungle, Pond5, AudioMicro, ProductionTrax) on a non-exclusive agreement, and adhere to the average prices of each market for sound effects of similar length, quality, purpose, etc.  I will log the daily sales for each of the four companies for one year, and analyze the data based on the following categories:

  • Total non-exclusive income, including AudioJungle, Pond5, AudioMicro, and ProductionTrax
  • AudioJungle income @ 50% (the lowest tier for exclusive authors)
  • AudioJungle income @ 70% (the highest tier for exclusive authors)

Finally, the sound effects titles, descriptions, and key words would be identical as permitted by the rules of the various companies.

 Biases and Inconsistencies in Data

As I mentioned, this is hardly a scientifically perfect experiment, but I wanted to enlighten you with a few inconsistencies throughout the experiment to consider when evaluating the results.

One inconsistency among the data is the acceptance rate of my submissions between the four companies.  Pond5 and ProdcutionTrax accepted 100% of my submissions, and thus can be compared accurately in their quantity of sales.  AudioJungle rejected submissions for various reasons, and as a result has only accepted roughly 90% of my sound effect submissions.  AudioMicro accepted 100% of the sound effects I submitted, but I discovered part-way into the experiment that AudioMicro inserts a digital fingerprint into each file submitted for sale.  For this reason, I made the personal decision to stop uploading new sound effects a few months in.  This is a personal bias that I won’t get into, but you can read more about digital fingerprinting HERE.  Based on the first few months of sales though, AudioMicro had minimal impact on the overall data, so I have reason to believe that this decision did not affect the final outcome of the experiment.

I also have a few songs for sale, which sell at a much higher price than sound effects.  All four companies approved the song submissions, and thus it is not an inconsistency in the data, but when a song or two sells it shows up on the graph as a spike in the data.  This event can be clearly seen in my first month of sales, which explains why the first month is so much higher than the next few.

Results & Analysis

After logging one years worth of data, the findings were fascinating.  I’ve included a series of charts from my workbook to correspond with these findings.  If you would like the view the workbook in its entirety, you can download it HERE.

(And if you would like to adopt it for your own use, go ahead!)

Total Income/Sales by Company

If analyzing the data by total income per company, it is clear that the current heavy hitters in the industry are AudioJungle and Pond5.

 

FIGURE 2: TOTAL INCOME PER COMPANY (BAR CHART)

FIGURE 2: TOTAL INCOME PER COMPANY (BAR CHART)

Even though this chart [F2] [F3] only depicts the final calculation of total income, I can tell you that these two companies were neck and neck throughout the entire period.

 

 

 

FIGURE 3: TOTAL INCOME PER COMPANY (PIE CHART)

FIGURE 3: TOTAL INCOME PER COMPANY (PIE CHART)

While the total income between the two companies is relatively close, the number of sales is not.  AudioJungle is only counting a non-exclusive royalty rate of 33%, while Pond5 is counting a non-exclusive royalty rate of 50%.

This indicates that even though AudioJungle has the highest number of sales, its low cost per unit ($1.00) and lower non-exclusive royalty rate (33%) yielded less income than Pond5’s higher cost per unit ($2 to $3) and higher non-exclusive royalty rate (50%).  The ratio breaks down to roughly 3:1.  In other words, you must make 3 sales on AudioJungle for every single sale on Pond5 to achieve the equivalent amount of income.

The following chart [F4] represents the total non-exclusive income per company by month.  This line graph is a better indication of the growth in sales over time, and the competitive relationship between AudioJungle and Pond5 as described earlier.

FIGURE 4: TOTAL INCOME PER COMPANY BY MONTH

FIGURE 4: TOTAL INCOME PER COMPANY BY MONTH

 

 But… What about AudioJungle at 50% or 70%?

To calculate this, we have to calculate AJ’s theoretical income at 50% and 70% royalty rates, and then compare it against the actual total earned income.  For you math people out there, the equations are as follows:

Audiojungle @ 33%  ÷  by [ .33 ] = AJ TOTAL GROSS INCOME


AJ TOTAL GROSS INCOME  ×  [ .5 ] = AJ THEORATICAL INCOME @ 50%


AJ TOTAL GROSS INCOME  ×  [ .7 ] = AJ THEORATICAL INCOME @ 70%


Pond5 + AudioMirco + ProductionTrax + AudioJungle @ 33% = TOTAL ACTUAL INCOME

 

Income Trends:  AudioJungle VS Total Income

The following line chart [F5] is the bread and butter of the whole experiment.  It shows the relationship between total non-exclusive earned income, and the theoretical income of selling exclusively on AudioJungle at both 50% and 70%.  By plotting these data points in relationship to each other, we can clearly see when the non-exclusive TOTAL INCOME yields more or less income than if we had opted for the exclusive option.  The dotted lines are trend lines, and allow us to view the rate of increase in income over time, and thus help us predict the outcome of our earnings in the future.  This chart suggests that, over time, a non-exclusive agreement with multiple companies is likely to yield higher income than an exclusive account with AudioJungle, even at its highest tier (70%).

 

FIGURE 5: INCOME TRENDS: AUDIOJUNGLE VS TOTAL INCOME

FIGURE 5: INCOME TRENDS: AUDIOJUNGLE VS TOTAL INCOME

CONCLUSION

 

Based on my research, and the type of material I have for sale, I can conclude that a non-exclusive agreement with multiple companies is likely to yield more income. 

…a non-exclusive agreement with multiple companies is likely to yield more income.
However, I can also conclude that it is astronomically more work to upload to multiple companies than to just one.  There are other companies out there beyond these four, and selling non-exclusively also means you can sell through your own website.

If you are hoping save time on your workload by selling exclusively though, I recommend choosing AudioJungle.  In addition to high amounts of traffic, it is also a social community that you can use to your benefit to increase sales.  AudioJungle allows you to establish a social reputation, which can be used to cross-sell your products and draw in new customers, while other companies leave you more or less anonymous.  It is also worth noting that AudioJungle’s tighter approval rate is a positive thing.  Websites like ProductionTrax have many more files available for sale, making your files more likely to get lost in the crowd.  AudioJungle’s policies keep the number of available files down, so your files will benefit from increased visibility.

 

TRUE OR FALSE:

FALSE:  AudioJungle does have the highest royalty rate, but they also have the lowest prices.  70% of a $1.00 sound effect on AJ is only $0.70, while the same file at Pond5 sells for $2.00 with a 50% royalty rate, meaning you earn $1.00.  The math is simple, and it proves just how much authors would benefit if AudioJungle did a global price boost. 
FALSE:  One company might have more… say… whooshes for sale than another company, but I have declarable proof that my highest selling sound effects with one company are the same highest selling sound effects with another company.  The company does not matter, the type of sound effect does. 
 TRUE… AND FALSE:  My experiment seems to be the most comprehensive study out there on the subject of exclusivity.  If you sell sound effects like me, I think you will find similar results.  If you are a songwriter or anything else, your situation may be different.
 TRUE:  This experiment follows the trends over the course of one year from April 2013 to March 2014.  Non-exclusive may not always be the best option.  AudioJungle seems to be picking up steam in the marketplace.  If AJ gains a large enough buyer population, or Pond5 loses a substantial portion of its buyer population, an AJ exclusive agreement may wind up being the better option. 

 

 

I’m still not sure what to do…

If you are still uncertain of what to do, I’ve devised two options that might be worth considering in order to maximize your profit:

Join as a non-exclusive author and upload to multiple companies when you start out.  It takes a whopping $75,000 in sales to reach AudioJungle’s 70% tier, and the majority of authors never make it that high.  AudioJungle makes it really easy to switch between an exclusive or non-exclusive agreement, so keep selling non-exclusively until it is no longer beneficial to you, and then delete your accounts on other companies and switch AudioJungle to an exclusive agreement.  You will bypass the starting 50% tier and be instantly upgraded to whatever tier equals your current amount of AJ sales (I confirmed this to be true with the Envato Staff).  Most companies will allow you to easily remove your uploaded files by simply deleting your account.  But beware.  If it is difficult to remove your sound effects from a competitor’s library – for example – because your files have been incorporated into a hard copy distributed library, you may not be able to use all of your files on AudioJungle without risking a policy violation. 

As we’ve covered previously, AudioJungle tends to hard reject some submissions for a variety of reasons.  This is likely because they already have too many of a certain type of effect or they do not believe your effect is commercially viable, rather than because your sound effect was of insufficient quality.  This does not mean your sound effect is incapable of earning income.

Create an exclusive account on AudioJungle, and upload all of your sound effects for review.  Make note of the few that have been hard-rejected, and then upload those files to non-exclusive accounts with other companies.  I’ll go out on a limb and state that all other crowd-sourced libraries mentioned in this article will accept 99.9% of your submissions, so, while you’ve reserved your highest commission rate on AJ for the majority of your effects, uploading your leftovers to the competitors can still provide you with a little supplemental income.

About the Author

Daniel Warneke

Dan is the owner and sound designer at Frontier Audio, a full-service audio company providing services in sound design, post-production editing and mixing, and studio/location recording services. He also runs Frontier Sound FX, providing personally recorded and designed effects in stock libraries for use in audio post-production.

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