Your podcasts were added to Spotify after it became available for your music. Your audiobooks will be available after that. Spotify is still pushing to stream all audio formats, especially those that don’t require payments from record labels. In a presentation last week, Spotify CEO Daniel EK outlined the company’s goals for expansion into audiobooks. This decision will be based on Spotify’s acquisition of Findaway, an audiobook platform, last year. For listeners, this seems like excellent news, but what about authors?
In my perspective, Spotify has a dismal track record when it comes to looking out for producers. As a result, I would be concerned about the pay structure as an author. Author and podcaster Todd Cochrane told Lifewire by email. How can an author be paid on a flat-rate monthly platform in a similar way to how Audible, the clear leader in audiobooks, pays authors?
Everything in audio
The goal of Spotify is to make all kinds of audio available to everyone, everywhere, according to Ek’s presentation. The “ubiquity” policy of Spotify entails making it simple to use the service to listen to music on your phone, in your car, or even on a speaker that supports it. Although it all began with music, your monthly subscription has since expanded to include podcasts and Spotify-only audio programs, which Spotify also refers to as podcasts, which is a little confusing.
For Spotify, podcasts have the benefit of being less expensive than music. For each song streamed, Spotify is compelled to pay a fee to the record labels. Every hour a listener spends listening to something other than music is an hour of songs Spotify doesn’t have to pay for because podcasts don’t have to do that. Author Sarah Prince informed Lifewire via email that Spotify entered the audiobook market by purchasing Findaway rather than purchasing content directly from publishers.
“If Spotify ever wants to compete with Amazon, they made a smart choice here. In essence, Findaway gives Spotify an advantage with regard to audiobook material, much like Anchor gave Spotify an advantage with regard to podcasts.
It’s easy to understand why Spotify and listeners in this setting might find audiobooks appealing. Having all of your audio in one place is convenient, but it’s not always a better experience. For instance, podcast apps that are made expressly for podcasting offer more customization and features that are conducive to podcasting. On the other hand, Spotify’s app has to perform every function. You’re stuck with Spotify’s podcast promotion banners everywhere if all you want it for is music.
You probably use Kobo or Audible, both of which are owned by Amazon. Like buying ebooks directly from publishers, buying audiobooks straight from publishers is also a possibility, but who does this? If you own a Kindle, you shop on Amazon. If you listen to audiobooks on your phone, it’s probably Audible.
Spotify has the potential to tip the balance of power if it can establish a presence in the audiobook industry, even if just because the market is more evenly distributed.
“Spotify could be the first company to challenge Amazon’s audiobook market” (Amazon owns Audible). In order to draw more authors and listeners to the platform, Spotify, in my opinion, will provide higher royalties than Audible.
There are numerous ways in which authors might gain. One justification is that new audiobook listeners who use Spotify may be interested in doing so. They could be able to negotiate better prices as a result of more competition.
On the other hand, record labels profited from the rise in music consumption that the streaming revolution brought about, with artists earning pennies or less for each song played on Spotify, Apple Music, and other platforms. Authors will only receive a portion of the same pie, which is now divided among an even greater number of people, even if Spotify increases its subscription fees.
In his presentation, Ek added, “Expect us to play to win, just like we did in podcasting.” We think that by allowing one major firm to dominate the industry, we would be able to expand it and give users and producers value.
Things can go either way for the creators and their followers when major corporations join areas created by artists for their own profit goals. Although audiobooks can be fantastic, it’s unfortunate if their popularity comes at the price of the authors of the books that make them possible.
Spotify hopes to make audiobooks the next major revenue source for the company. The audiobooks sector was the corporate officials’ next aim for dominating the market, they told investors on Wednesday. It could have significant effects on Spotify’s own company as well as the publishing sector when they debut the audiobooks vertical (which is TBD).
Daniel Ek, CEO of Spotify, stated that “we feel that audiobooks, in their many various forms, will be a significant market.” Expect us to play to win, just like we have in podcasting.
“Expect us to play to win, just like we have in podcasting.
“The purchase of Findaway by Spotify, which was revealed last year, marks the company’s first significant move into that industry. The audiobook platform is similar to Anchor in many ways. With the acquisition, Spotify will have access to a significant portion of the audiobook ecosystem and the ability for authors to produce, distribute, and monetize their work. So it makes sense that Nir Zicherman, a co-founder of Anchor, is the executive in charge of audiobooks at Spotify.
However, it should be noted that the Findaway purchase has not yet been finalized. With an anticipated acquisition date before the end of 2021, it was originally announced in November 2021. The Department of Justice’s antitrust section is still examining the agreement, though.
Although it’s unclear exactly how the model will operate. It seems like at least part of the audiobooks will be free. Ek stated that the freemium business model will be used for audiobooks. While Dawn Ostroff, the chief of content and advertising, stated that. “We’re looking at introducing ad monetization into audiobooks.”
If so, the industry would undergo a significant transformation. Typically, audiobooks are not inexpensive. Credits are the basis for the Audible and audiobooks.com subscription services offered by Amazon (1 credit per book). The monthly fee for both programs to access popular titles is $14.95. Popular novels typically cost $15 or more on Apple and Google’s online book stores. The majority of Findaway’s creators, though, are not likely to be the next Sally Rooney, and it is not yet known how or how much premium novels will cost to be made available on Spotify.
What does that entail for the publishing sector, then? According to Michele Cobb, executive director of the Audio Publishers Association, it is tricky (APA). Worldwide exposure to audiobooks will reach millions of additional listeners, thereby significantly growing the market.
In 2021, the market for audiobooks was valued at $1.6 billion.
The APA published its industry size statistics for 2021 earlier this week. According to a report by Edison Research, the audiobook industry increased by 25% to $1.6 billion in 2021, which would put it just ahead of the $1.45 billion podcast market for that year. According to a presentation by Spotify, the industry is significantly bigger and may be worth more than $9 billion, according to a Grand View Research analysis. (It is important to note that the numbers are not quite comparable because the Grand View statistic is based on the entire world while the APA study is primarily based on North America.) Ek went one step farther and said that the market’s valuation may reach $70 billion.
There may be drawbacks for publishers and authors using Spotify, even if its creator content. And ad-supported listening serves to grow the audiobook market. Cobb stated, “I believe the objective is that you would boost the revenue sufficiently. So that everyone gets more.” However, it’s feared that getting less money per unit. It might lead to a decline in sales.
Spotify is not stopping at audiobooks in its attempt to break out of the cumbersome and pricey music industry. Future plans for companies “X,” “Y,” and “Z” were cryptically hinted at in the presentation. You’re welcome to hazard a guess as to what those might be.