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Will Spotify Disrupt Book Publishing?

Spotify’s new audiobook streaming eats books

Since the rise of Amazon, things have been pretty tough for many publishers and writers alike. The massive online marketplace suddenly provided readers a place to purchase digital books at a markedly reduced price. Compared to published hard copies, consumers paid a fraction of the cost. This was then followed by a wave of self-publishing authors promoted by the platform, which diluted the quality of content significantly. Perhaps this was something that was needed, and as such, readers and publishers alike rolled with the punches. Though the pricing was less and the competition more, opportunity to make a living existed. After all, Amazon still sells books today, digital or hard copy, as single items. But based on recent announcements, this may all soon change with Spotify’s expansion in audiobooks.

Spotify’s new audiobook streaming on a phone
Spotify’s new audiobook streaming could disrupt audiobook sales.

Spotify’s new audiobook streaming platform has launched, which occurs after the company considered getting involved in textbooks as well. As such, many fear that the company will do precisely what it did to the music industry: undermine quality and creativity. Despite promising musicians a grander audience and the potential to hit it big, very few have. And in the process, a sizable percentage of would-be performers have given up on their pursuits realizing its futility. With Spotify’s expansion in audiobooks, the same could well happen to would-be authors. Indeed, the same promise for fame and profits will be promoted. But in reality, it may be just another way creativity gets squashed at the hands of a massive tech platform. This is the risk that Spotify’s new audiobook streaming platform poses to authors.

(Spotify expanded, then contracted–read all about it in this Bold story.)

Spotify’s New Audiobook Streaming Gig

In many ways, Spotify’s expansion in audiobooks will look a lot like their current music platform. As Spotify users know, there is a monthly subscription paid that allows them to access thousands of songs. This is quite the value since the monthly fee would not even pay for an entire album sold in years past. Similarly, it’s expected Spotify will offer a promotion for its audiobook users. Currently, premium Spotify members receive a few hours of free audiobooks each month. But as the new streaming platform is rolled out, the hope is new users will subscribe. Based on demographics, this will primarily involve those under 40 years of age. There’s little doubt the move will increase Spotify’s market in the audiobook arena.

From an author’s and publisher’s perspective, Spotify’s expansion in audiobooks isn’t quite as attractive. Offering a streaming service for audiobooks will undoubtedly increase a potential audience for these stakeholders. But it comes with a cost. Spotify’s new audiobook streaming policies will only compensate authors fully if a user completes an entire book. Otherwise, compensation is based on the portion of the book actually read. Given that many books are purchased but never finished or even read, this represents a sizable cut in pay. Even with a larger audience to offer an audiobook, this is likely to result in a significant drop in compensation. If Spotify’s expansion in audiobooks moves in the same direction is its music streaming, this is a real concern.

someone using Spotify on their smartphone
Industry shakeups can be great for consumers–especially consumers of audiobooks.

From Virtuous to Vicious Cycle

On the surface, Spotify’s expansion in audiobooks could be a positive thing for all. By offering readers a streaming option for audiobooks, the potential user pool will likely increase. This increase then encourages more content and book creators, especially when user fees are shared with authors and publishers. As this occurs, advertisers can be recruited based on a growing user and content pool. This then provides additional revenues that continues to drive the process. In theory, this virtuous cycle creates a win-win-win for all involved. Interestingly, this was the same spin that Spotify pitched to musicians with its music streaming platform. And while this seemed to come to fruition early, the long-term result was not nearly as favorable.

In looking back at shifts in the music industry, Spotify’s new audiobook streaming platform appears less attractive. The problem underlying a decline in the virtuous cycle model is one where revenues aren’t fairly distributed. For one, 90% of the royalties paid to musicians by Spotify go to less than 1% of musicians. Based on Spotify’s algorithm, only the top performers do well. As a result, 99% of those trying to make a living cannot and ultimately give up. At this occurs, content naturally declines, which encourages Spotify to push a more limited library of songs at its subscribers. Ultimately, creativity and innovations are restricted, and the quality of the entire industry falls. This more negative vicious cycle is precisely what many fear with Spotify’s expansion into audiobooks. Within a few years, book content could well be much lower quality and more manufactured as writer pools shrink.

Market Strategies to Protect Content Creativity

Spotify’s expansion in audiobooks means more audiobooks
Spotify’s expansion in audiobooks might mean trouble for Amazon and other audiobook sellers.

Because of the potential risks that are associated with Spotify’s expansion in audiobooks, some are calling for increased regulations. Certainly, major tech companies are different from monopolies of the past as are their strategies. But asking for extensive government oversight is not the answer. Spotify’s new audiobook streaming platform will bring new opportunities as well as threats. In order to address these threats, readers, authors, and publishers alike can make their voices heard through the marketplace.

For readers, turning away from lower quality content will eventually occur. This includes AI generated content that Spotify might well utilize to enhance its profitability. For authors and publishers, it means embracing the current changes and finding new ways to get their creative works to the public. These approaches may not be as economically attractive to readers as Spotify’s new audiobook streaming services. However, quality will attract many readers who will be willing to pay a fair price for a good read.

There is no question content-related industries will see a great deal of change in the coming years. Being ready for the change and investing in innovative ways to deal with it will be essential. Will Spotify’s expansion in audiobooks disrupt the industry. In all likelihood, yes. But that doesn’t means it has to destroy it.

 

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