Beginning September 20, 2022, US customers will be able to: Audiobooks on Spotify to download. You can initially choose from 300,000 books and have to pay separately for each download. The business model is similar to that of Apple and google. Spotify initially has book recommendations compiled by hand by an internal editor, but later wants to switch to algorithmic recommendations that listeners now know from the music and sometimes the podcast offer.
Spotify had worldwide audiobook distribution last fall Findaway acquired and so Amazon with his daughter Audible challenged. However, Audible only offers a subscription service, with users paying a monthly fee to access its approximately 760,000 audiobooks and other content, including some Audible Originals. Market research firm Codex Group reports that Audible currently controls 48 percent of audiobook sales in the United States.
Spotify wants to sell its audiobooks at individual prices and negotiate terms directly with publishers. Nir Zicherman, head of Spotify’s audiobook division, explains that several business models are being explored. These include ad-funded offers, subscriptions, and the sale of exclusive titles. Spotify plans to roll out its offering globally.
Users rely on them to buy audiobooks from Spotify through a web browser and not in the app. The background is that Apple does not want to be able to collect up to 30 percent commission for downloads from the AppStore. When it comes to in-app purchases, the two companies have been at odds for a while clinch.
Spotify CEO Daniel Ek recently cited audiobooks as a key area of expansion on an investor day. The company’s vision is to become ten times as large as it is today. According to Ek, the global audiobook market represents an annual revenue of $70 billion and Spotify could generate profit margins of more than 40 percent. The market is growing by more than 20 percent annually, but only accounts for six to seven percent of the entire book business. Spotify hopes to introduce audiobooks to its hundreds of millions of music and podcast listeners.
Major publishers such as Lagardere SCA’s Hachette Book Group, Paramount Global’s Simon & Schuster, and Penguin Random House, Bertelsmann’s largest book publisher, have posted their catalogs to the Spotify service. They see opportunities in the fact that book authors are regular guests in podcasts. The listeners should be more inclined to buy the works of these authors. In addition, star authors were able to publish their playlists and favorite podcasts, creating a close connection with audiobook downloads. (ss)