On Tuesday, Spotify said that it would begin offering 15 hours of audiobooks each month as part of its streaming service for premium subscribers in Britain and Australia. This winter, it will expand the offering to US subscribers.
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Four years ago, Spotify’s business was stagnating. Apple had overtaken it as the top paid music service in the United States, losses were mounting and customer growth was slowing.
Daniel Ek, the company’s CEO, decided that Spotify needed to transform from a music service into the everything store for audio. The first missing piece was podcasts.
Now Ek has set his sights on another rapidly growing medium: audiobooks.
On Tuesday, Spotify said that it would begin offering 15 hours of audiobooks each month as part of its streaming service for premium subscribers in Britain and Australia. This winter, it will expand the offering to US subscribers.
Spotify’s expansion into books has the potential to shake up the retail landscape for audiobooks, a fast-growing segment of publishing that has long been dominated by the Amazon-owned audio retailer Audible.
In Ek’s eyes, Audible’s audiobook dominance is reminiscent of Apple’s past control over music and podcasts. Spotify built its business by disrupting the music industry with its monthly subscription service and podcasts. Ek said in an interview that he saw the potential to do the same with audiobooks.
Having books on Spotify could help publishers reach a vast new audience. Spotify has the tools to recommend relevant audiobooks to podcast listeners who are interested in particular subjects, and to promote audio titles to Spotify users who have listened to a podcast featuring an author.
“I see this as a huge opportunity to be in the company of Joe Rogan, Taylor Swift and Beyoncé,” said Ana Maria Allessi, the vice president and publisher of Hachette Audio.
But there’s also concern that Spotify’s plan, which involves experimentation with a new business model for book sales, could upend the audiobook business. Rather than pay for each audiobook a customer begins listening to, the company has proposed paying for the amount of time that the customer listens, according to a review of a publisher’s correspondence with agents.
The average audiobook lasts seven to 10 hours, Spotify said, which means subscribers can listen to about 1 1/2 books per month, but some books can run for much longer. Heavy users who want to listen to more can pay $10.99 for another 10 hours of audiobook content.
Spotify has struck deals with the five biggest publishers in the United States as well as hundreds of others. It will offer a catalog of more than 150,000 titles to start.