Spotify is today startup audiobook support on its streaming service, offering a third type of audio content for its customers outside of music and podcasts. The audiobooks will initially be made available to users in the US, who will have access to a selection of around 300,000 titles recommended by Spotify’s editors. But over time, the company says it plans to expand audiobooks to other markets, increase its selection and start using algorithmic recommendations to recommend books to users, as it does now with its other audio formats.
Titles will be discoverable in a new Audiobooks hub in the Spotify app and in other areas, including user-curated recommendations, where they can be purchased a la carte.
Like other audiobook services, Spotify will offer a range of standard features, including the ability to download titles for offline listening, adjust playback speed, rate titles and listen on different devices.
Unlike other platforms, however, each title is individually priced, rather than having a single, consistent price for all books in the catalog. Spotify intends this to be one of the key differentiators and competitive advantages of its service.
“We think a more fluid pricing model would actually allow both an audience that has never used this format to start using it on Spotify,” explained Nir Zicherman, Spotify’s vice president and global head of audiobooks and closed content. , at a briefing. Plus, he added, it can work for authors who may not have found their audience in the past.
The company also said that royalty rates will be in line with industry norms, but they vary by publisher. It provided no range.
Unlike Audible, which sells subscriptions and “credits” to purchase audiobooks through in-app purchases, Spotify will not use the app stores’ own payment systems for its audiobook sales. Instead, it will offer free previews of the book’s content, but users will be directed to Spotify’s website to complete their purchases, the company told reporters. The purchased audiobook will then be unlocked in the app and saved to the user’s library.
It’s worth noting that it follows Spotify’s ability to avoid in-app purchases on iOS a policy change announced by Apple back in March, which focused on “reader” apps — meaning those designed to provide access to digital content such as music, books, videos or magazines. Apple said these apps can now use external links if approved. Meanwhile, Google began piloting third-party billing earlier this year, with Spotify as its first client.
Spotify did not discuss what rules allowed it to direct customers to its website for purchases, but said its system was “compliant” with the app store’s rules.
Spotify also wouldn’t detail its future plans for audiobooks, but an executive suggested the company would explore other business models, perhaps subscriptions and advertising. It also aims to explore how to make podcasts more interactive, like this one add interactive features to podcasts. And it hinted that it might be able to tie audiobooks into other parts of its business — for example, by offering a Spotify playlist to accompany an audiobook title as bonus material.
“…We see an opportunity for innovation in a largely untapped market,” Zicherman said at a press briefing. “Audiobooks represent only a 6 to 7 percent share of the broader book market, and this category is growing at 20 percent year-on-year,” he noted. “We believe we have the potential to massively expand the audience for audiobooks, bringing the work of exceptional authors into people’s lives.” And we intend to take audiobooks further than ever before. “Just as Spotify changed the way people create and listen to music and podcasts, we believe we can do the same over time with audiobooks by offering new formats, new ways to interact with content and new ways to discover,” he said.
While Spotify aims to improve discovery over time, it won’t do so immediately through social features. That means you won’t be able to see what books your friends are listening to the way you can see what music they’re streaming like you can today through the desktop app.
Spotify previously signaled its interest in audiobooks from format testing with public domain titlesthen again through its partnership with Storytel for 2021 which allowed that company’s customers to access their books in the Spotify app through technical integration.
However, it has officially confirmed its intention to enter the market with the acquisition of a digital audiobook distributor Find a way last November. At the time, Spotify quoted research evaluations indicating how the audiobook industry is expected to grow from $3.3 billion in 2020 to $15 billion by 2027.
Later, at investor day this june, Spotify CEO Daniel Eck noted that audiobooks’ share of the $140 billion total book market reaches 50% in the markets with the highest audiobook penetration, meaning the potential market could be measured in the billions. The company also predicts that audiobooks can have a gross margin of over 40%, similar to podcasts.
Spotify didn’t share which publishers it’s working with for the launch, but said bestsellers and top authors will be well-represented in a diverse selection of genres. (Since the company didn’t make the service available for preview, we can’t confirm the accuracy of this claim.)
The launch will also benefit from Spotify’s acquisition of Findaway with support for Findaway Voices, a self-publishing tool that allows authors to publish to multiple audio platforms at once, including now Spotify. This seems similar to its strategy with Anchor, which allows podcasters to distribute on multiple platforms. All Findaway Voices titles will be available at launch and going forward, Spotify said.
Despite the size of the potential market, Spotify is not without competition as it enters this space. It will go up against leading audiobook providers such as Apple, Amazon-owned Audible, Google, Nook, Rakuten Kobo, Chirp, Audiobooks.com and offerings from public libraries, including through OverDrive. What’s more, it does so without any exclusive titles to entice listeners like Audible’s Originals — though that may change over time, thanks to the investment in Findaway.
The audiobooks are available today on Spotify’s US app