This article was first published in Hot Pod Insider, the audio industry newsletter from The Verge.
Spotify wants to make audiobooks the next pillar of its business. On Wednesday, company executives offered the audiobook business to investors as the next target for industry dominance. When they release audiobooks vertically (which is TBD), it can have huge repercussions not only for Spotify’s own business, but for the publishing industry as well.
“We think audiobooks, in their various forms, will be a tremendous opportunity,” Spotify CEO Daniel Ek . said:. “And just like we did on the podcast, expect us to play to win.”
Spotify’s first step in this business is its acquisition of Findaway, which was announced last year. The audiobook platform is in many ways like Anchor. Authors are allowed Create, distribute and monetize their workAnd, with the acquisition, Spotify will disrupt a major part of the audiobook ecosystem. It is fitting, then, that the CEO overseeing Spotify audiobooks is Nir Zeicherman, co-founder of Anchor.
One thing to note, though: The Findaway deal isn’t really closed yet. she was First announced in November 2021with an expected acquisition date before the end of 2021. However, the deal is still under review by the Ministry of Justice’s Antitrust Division.
How the model will work is not entirely clear, but it appears that at least some of the audiobooks will be free. Eck said the freemium model would be applied to audiobooks, and Don Ostroff, president of the content and advertising business, said, “We’re looking to bring ad monetization to audiobooks.”
If that were the case, it would be a massive change for the industry. Audiobooks don’t usually come cheap. Amazon’s Audible and audiobooks.com subscription services are based on credits (one credit per book). Both services cost $14.95 per month to access the hottest titles. Apple and Google offer audiobooks for purchase, and popular titles are usually $15 or more. But at the same time, most Findaway creators won’t exactly be the next Sally Rooney, and it’s not clear how and at what price top-tier books will be made available on Spotify.
So what does that mean for the publishing industry? It’s complicated, according to Michelle Cobb, executive director of the Audio Publishers Association (APA). Millions of new listeners around the world will be exposed to audiobooks, which can greatly expand the market.
Earlier this week, the APA released its 2021 statistics on the size of the industry. The study, conducted by Edison Research, found that the audiobook market grew by 25% in 2021 to 1.6 billion dollarswhich makes it slightly larger than $1.45 billion podcast market in the same year. Spotify’s presentation assumed the market was even larger, and could be worth more than $9 billion, based on a report by Grand View Research. (It’s worth noting that the numbers aren’t exactly apples to apples: the APA report is based mostly on North America, and the Grand View number is global.) Ek took a step further, as the market forecast could actually be the same as $70 billion.
Even if Spotify helps expand the audiobook market with creator content and ad-supported listening, there are potential downsides for publishers and authors. “I think the hope is that the revenue will increase enough so that everyone gets more,” Cope said. “But the concern is that you’re going to get a lot less per unit which ultimately leads to lower revenue.”
In its quest to expand beyond the expensive and expensive music industry, Spotify doesn’t stop at audiobooks. The presentation vaguely evoked the “X”, “Y” and “Z” works of the future. Your guess is as good as mine for what it could be.
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