Spotify CEO Daniel Ek
Courtesy of Spotify
Spotify is broadening its audiobooks offering by giving all paid subscribers 15 hours of listening per month.
Rather than purchase audiobooks à la carte, premium subscribers will be able to open the app and opt to listen to more than 150,000 audiobooks from all the major publishers that will be offered as part of the Spotify subscription.
The offering will be rolled out to the U.K. and Australia on Tuesday, with other markets, including the U.S., expected to launch this winter. As of its latest earnings, Spotify has more than 220 million paid subscribers.
If a subscriber hits the limit of 15 hours of listening per month, they can opt to add on 10 more hours or purchase the book. The company will also use its existing personalization tools to suggest books to users, starting by asking users about favorite books. This method, as well as its prominent placement on the home feed and social media sharing tools, is also meant to help authors grow their fan bases.
“I’m so excited to bring some of the same tools that have helped the music industry and podcast industry as well now to the audiobook industry,” CEO and founder Daniel Ek said at an event in New York announcing the launch Tuesday.
Spotify launched its audiobooks business in September 2022, following its acquisition of audiobook production platform Findaway in November 2021. The company has been positioning its move into audiobooks as the next step in its business model, after heavily investing in the podcasting space, which has weighed on its margins but has helped with user retention, according to the company. The podcasting segment has yet to turn a profit (executives have forecast hitting that metric in 2024), and Spotify has had to make several cuts in the space, in addition to layoffs, including ending its exclusive podcasting deal with Prince Harry and Meghan Markle in June and merging podcasting studios Parcast and Gimlet into a single division.
“This greatly improves our offering, which will lead to people increase their engagement with Spotify, which will then, of course, reduce churn,” Ek said of the new audiobooks offering. “Now, in addition to that, this gives great flexibility to our business, which will ultimately help our revenue and profits.”
At its initial launch, Spotify had only offered à la carte purchases of the audiobooks, which at the time included more than 300,000 titles from major and independent publishers for users in the U.S. By adopting the subscription model, the company will now position itself as more of a competitor to Amazon’s Audible, which gives listeners access to audiobooks and podcasts, with varying catalogs depending on the tier of the subscription.
Spotify says the audiobooks catalog for premium users features more than 70 percent of best-selling titles from around the world through partnerships with Penguin Random House, HarperCollins, Hachette, Simon & Schuster, Macmillan and RB Media, as well as independent publishers like Dreamscape and Pushkin. The company says this makes it the “largest of any subscription-based audiobook streaming platform currently on the market.”
It also offers Spotify somewhat of a workaround for its audiobooks business amid its continuing battle against Apple’s app store regulations. If Spotify allowed users to buy an audiobook directly within the app, it would have to give 30 percent of the revenue to Apple. So instead, the company directs users to buy the audiobook on its website, in a process that Spotify says is still challenging for users.
