Spotify looks to win audiobook market share with expansion

Spotify has revealed plans for an aggressive expansion into the audiobook market as it aims to launch a third pillar focusing on audiobooks, alongside its music and podcast offering.

In a speech delivered to investors last Wednesday (8th June), company founder and c.e.o. Daniel Ek, said he believed audiobooks will be a "massive opportunity" for the company.

He said: "Today, the global size of the book market is estimated to be around $140bn. That’s inclusive of printed books, e-books and audiobooks, with audiobooks having only about a 6%–7% market share. But when you look at the most penetrated audiobook markets, it’s actually closer to 50% of the market. So call that an annual opportunity of $70bn for us to expand and eventually compete for. And just as we’ve done in podcasting, expect us to play to win. And, with one major player dominating the space, we believe we will expand the market, and create value for users and creators alike." 

He said that the company would use its "foundations of ubiquity, personalisation and Freemium to attract both creators and users and drive engagement".

The company’s established Freemium model combines a free ad-supported tier and the premium subscription tier. It is likely users will be required to pay extra for individual audiobook titles, which would see a new revenue base open up for publishers.

The publishing industry has been historically wary of Spotify’s movement in the audio space, with some concerned its streaming model origins could leave authors unprotected and vulnerable to copyright infringement. 

However, Michele Cobb, executive director of the Audio Publishers Association in the US, told The Bookseller publishers are "optimistically waiting for more information" about the service.

"With every vendor that takes notice of the growing audiobook market and puts some thought and attention into the format there is opportunity. Publishers are confident that when new consumers discover the format, they enjoy it and return for more, so the exposure to new potential listeners is always a good thing.

"What remains to be seen is how the business models and offerings will play out specifically and where the happy medium of more listeners and strong per listen revenue will meet."

In November last year Spotify acquired Findaway, an audiobook streaming and distribution services company, though the deal has not been cleared by the Department of Justice’s antitrust division review as of yet.

The aggressive expansion into audiobooks follows the company’s success with podcasts. Its podcast revenue for 2021 came in at €200m (£170m), and the platform has more than four million podcasts, with 182 million subscribers signed up at the end of the last quarter.