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The Publishing Industry Is Wary of Spotify's Audiobooks Offering

Experience the best in audiobooks with Spotify's premium plan in the UK and Australia, which offers 15 hours of monthly listening.
on Oct 06, 2023

Premium users in the UK and Australia will now enjoy 15 hours of audiobook listening per month as part of their broader plan.

Hello and welcome back to Soundbite. Today, we'll take a look at Spotify's new audiobooks service. Please contact me via email, and if you haven't already, please subscribe to this newsletter here.

The publishing industry is wary of Spotify's audiobooks offering.

On Tuesday, publishing executives, authors, and journalists flocked to Spotify's New York City offices to learn more about the company's audiobook aspirations. As part of their subscription, premium users in the United Kingdom and Australia will now enjoy 15 hours of audiobook listening per month. Users can purchase extra 10-hour packets once they've used up their first hours. The feature will be available in the United States this winter.

The mood within the auditorium was one of excitement and curiosity, rather than shock and awe (the five major publishers had all signed on to the service).

How will this judgement affect the audiobook sector, which a Morgan Stanley analyst recently estimated to be worth $5 billion? A few speculative ideas have been circulating about, but first let's go through how Spotify's offer compares to its competitors'.

Unlike Audible, which operates on a credit system and ultimately provides one audiobook per month for $15, Spotify is based on hours. In theory, someone with 15 hours can read a variety of books or devote that time to a single title. (I'm hoping Power Broker is included in Spotify's offering, despite the fact that the book requires 66 hours of listening time, or more than four months of included time.)

This differs from Spotify's fellow Swedish audio company Storytel, which provides unlimited listening. Because of this feature, publishers like Penguin Random House have withdrawn their works off the site, as well as Scribd in the United States. It's also likely why, despite its stringent limitations, Spotify was able to win the involvement of prominent publishers.

How does Spotify track listens and pay publishers?

"It's kind of dependent on what the agreement is with each partner," said David Kaefer, Spotify's VP of business affairs and the audiobooks business.

Conversations with folks in the publishing ecosystem have led me to believe that executives see this in a variety of ways.

On the other side, Spotify reaches hundreds of millions of individuals worldwide, including those who don't currently listen to audiobooks. This initiative has the potential to significantly increase the number of individuals who read books. Spotify also offers listener data that could help publishers better understand their audience. The hourly allocation may also encourage individuals to listen to shorter titles rather than longer ones that would consume their full monthly credit.

Could Spotify's 15-hour free trial persuade some Audible subscribers to cancel their subscriptions? Or, more broadly, may it deter some people from purchasing audiobooks?

"Cannibalization of an existing audience is definitely a concern," said Michele Cobb, executive director of the Audio Publishers Association, noting that many TV streaming services exist, each with their own catalogues and features.

Audible receives the most recent and best-selling titles and provides listeners with a wide range of alternatives. What titles Spotify will offer, at least in the United States, remains to be seen. According to the firm, it will feature "over 70%" of the world's bestselling titles.

Spotify officials emphasised during the presentation that publishers would be able to sell their books using promo cards linked to the site, similar to what the company gives musicians and labels.

Spotify considers artists and podcasters to be customers, and it can now court authors and publishers in the same manner, enticing them with marketing options, better data insights, and improved discoverability.

But it's also worth mentioning that not everyone has been pleased with their Spotify experiences. Hundreds of podcast staff at the corporation have been laid off in the last year, as many musicians lament the status of streaming and the fractions of a penny they earn every play.

Will publishers look back on this period with affection, as another important milestone in the evolution of how audiobooks are consumed — or, rather, as a costly miscalculation?