When Spotify announced last fall that it was adding audiobooks to its streaming service, reactions in the publishing world were mixed: Many publishers saw Spotify’s entrance as an chance to reach new audiences. But some agents and authors worried that streaming could erode the value of audiobooks, a lucrative and growing format.
A few months later, there are early signs that Spotify is driving audiobook consumption — which has been growing dramatically for more than a decade — even higher.
Excluding Spotify, the audiobook market in the United States grew 14 percent in the fourth quarter of 2023 compared to the previous year, according to Bookstat, which estimates sales of audio on retailers like Apple and Audible.
With the addition of Spotify, the audiobook sector grew by 28 percent in that period, the company said. Using figures provided by Spotify, Bookstat estimated that Spotify had a market share of 11 percent, putting it ahead of Apple and behind Audible, which has long been the dominant player in the medium.
“It suggests that they grew the market rather than cannibalizing existing Audible and Apple customers,” said Paul Abbassi, the founder of Bookstat, of the data.
In the past few months, Spotify has paid audiobook publishers tens of millions of dollars in royalties, a company representative said. Best sellers like Britney Spears’s memoir, “The Woman in Me,” which was the most listened to on the platform, and Brianna Wiest’s 2020 self-help book “The Mountain is You,” have proved particularly popular with listeners.
“For December, it was about four to five times the sales we would normally see,” said Noelle Beams, the chief operating officer of Thought Catalog, the publisher behind “The Mountain is You,” which has earned hundreds of thousands in royalties through Spotify. “This shows us that there are new audiences to be reached.”
Spotify subscribers are also widely sampling and listening: In the past few months, Spotify users have listened to more than 90,000 individual titles from the platform’s catalog of more than 200,000 audiobooks, the company said.
Spotify is now releasing titles as Spotify Audiobooks, and producing them through Findaway, an audiobook production company that Spotify acquired. Their entrance as an audiobook producer and retailer could make the already heated market even more competitive. For potentially big books, audio rights can sometimes sell for six-figure sums.
Audiobooks have become a lucrative format for publishers. Digital audio grew more than 500 percent between 2013 and 2022, reaching $839 million in revenue, according to the Association of American Publishers. For certain genres, like self-help and celebrity memoirs, audio sales can match or exceed print sales.
Audio is such a critical source of revenue that some in the industry worry streaming could dilute it.
“The big fear from agents who want to give their authors a living wage is, will this drive prices down?” said Sandra Dijkstra, a literary agent. “Is this going to do to books what Spotify did to music?”
Spotify’s expansion into books comes at a challenging moment for the company. While it has a huge paid subscriber base of more than 226 million users, it has struggled to make a profit from its music business. The push into podcasting gave Spotify a bigger footprint in that growing medium, but it has since pulled back, canceling shows and cutting jobs in its podcasting division. Recently, it announced plans to lay off 17 percent of its staff, about 1,500 people.
By adding audiobooks, Spotify is aiming to attract new subscribers, and to keep existing subscribers on the platform for longer. Last fall, it began offering premium subscribers in the United Kingdom, Australia and the United States 15 hours of audiobook listening per month as part of their existing subscription. Those who want to listen to more can pay $12.99 for another 10 hours of audiobooks.
In the United States, Spotify got all of the five biggest publishers to put books on its platform, as well as smaller publishing houses and self published authors, and struck different deals with various publishers.
David Kaefer, the head of Spotify’s audiobooks business, said their payments are consistent with what other major retailers offer. “Every deal we have is a model that the industry’s already used,” he said. “They’re not some new wild approach.”
Some major publishers, including Hachette and HarperCollins, put their entire audio catalogs into Spotify, while others like Macmillan only provided a selection and allowed authors to opt out. Many authors and agents were caught off guard, and the range in financial arrangements created anxiety and confusion, multiple agents said.
“The problem is this builds into the mindset of the consumer that books should be much cheaper, or even free,” said Robert Gottlieb, a literary agent and chairman at Trident Media Group, which represents more than 2,000 authors.
For now, publishers are hopeful that Spotify’s personalized algorithm-driven recommendations will direct its users toward books they might not have discovered otherwise.
Amanda D’Acierno, president and publisher of Penguin Random House Audio, said that based on the titles that are selling, the demographic on Spotify seemed to be skewing younger and more male than the traditional audiobook audience.
“What we’ve seen here in the U.S. is very, very good,” she said. “They’re reaching people who don’t go to bookstores often.”