“Sapiens” at 2X speed… Spotify is coming for Audible. The Swedish streamer is giving paid subscribers 15 hours of audiobook listening a month, offering 150K+ titles. If listeners get stuck on a cliffhanger, they can pay an additional $11/month for 10 more hours. The literary perk launched in the UK and Australia this week and is expected to entertain commuters in the US and other markets this winter. The move could help Spotify retain and attract subscribers — especially after it raised prices this year.
Prologue: Spotify got into the audiobook biz in 2021 with a $123M acquisition of audiobook platform Findaway, and started offering à la carte purchases last year (which struggled to catch on since users had to leave the app).
Antagonist: Amazon-owned Audible dominates the biz, though Prime subscribers still have to pay for the audiobook membership. By offering listening hours at no extra charge to subscribers, Spotify could gain a leg up.
Trying earverything… Spotify has invested ~$1B in podcasting, sealing exclusive multimillion-dollar deals with everyone from “Call Her Daddy” host Alex Cooper to Meghan Markle and Prince Harry. But the investment has yet to pay off with a profit. The streamer has ended several of its big-name deals and laid off workers in its pod division. Meanwhile, music artists have long been battling for a bigger cut of royalties, as platforms and artists struggle to earn streaming $$. After losing $555M in the first half of this year, Spotify expects audiobooks to have high profit margins (40%+).
Books could be Spotify’s high note… Audiobook sales have seen double-digit growth for 11 years in a row, with especially big spikes during the pandemic. More than half of Americans have tuned in to an audiobook, and listenership continues to grow as books in general remain popular. Plus, analysts say book publishers welcome competitors to Audible, meaning Spotify should be able to keep expanding its library.