Spotify Makes a Bet on Audiobooks

On Tuesday, the audiobook market was made more competitive by the introduction of a new hub on its app with more than 300,000 titles.

More than a decade ago, the company changed the music industry with its streaming music service. There is a rapidly growing category for publishers.

In a surprising shift away from its all-you-can- listen ethos, Spotify is selling audiobooks la carte. Executives did not detail the revenue sharing model with publishers, but said that prices will be in line with other retailers.

For more than a decade, digital audio has grown. The Audio Publishers Association says that audiobook revenues increased 25 percent last year. More than 74,000 audiobooks were released last year.

They said that there is an even bigger opportunity. They said that audiobooks make up less than 7 percent of the book market.

During a news conference on Monday, the head of audiobooks at Spotify said that they believed they could expand the audience for audiobooks. We believe we can do the same thing with audiobooks, by offering new formats, new ways to interact with content and new ways to discover, just like we have done with music and podcasts.

An audiobook recommendation engine similar to the way the service recommends music based on listens' tastes is in the works. It is only available to users in the US.

The audiobook push is a gamble for the company, which added podcasts, comedy performances and other spoken-word entertainment to its offerings.

The company has never reported an annual profit despite growing substantially in terms of content, subscribers, users and revenue. The company's stock price has fallen over the last year, but is still higher than when it went public. Some analysts and investors don't believe in the value of podcasts.

Many in the publishing world are hoping that some of the users of the service will be into audiobooks.

The executive director of the Audio Publishers Association said that it was an opportunity to get people to listen to audiobooks.

There are almost 200 million paying subscribers to the music streaming service. It's possible to get even a fraction of them to buy an audiobook.

Chris Lynch is the president and publisher of the audio division at Simon and Schuster. Introducing another major outlet that has a built-in listening audience is a good thing.

It is not clear how users will adapt to paying for books at a time when they are used to streaming music and shows for free. The company decided that la carte sales made the most sense and will experiment with other models in the future.

There are a number of platforms to choose from, including Apple, Google, and libro.fm, which distributes digital audiobooks. The largest audiobook retailer is owned by Amazon and has more than 760,000 titles. A monthly or annual membership plan gives a certain number of credits that can be redeemed for audiobooks.

Daniel Ek said that the company is prepared to invest a lot in order to compete withAudible. Ek told investors in June that they should expect to play to win. With one major player dominating the space, we think we will expand the market and create value for users and creators alike.

Some inroads were already made into the audiobook arena by the streaming service. They bought the audiobook creator and distributor Findaway for $119 million. In a presentation to investors this summer, executives from Spotify said they expected the audiobook market to grow from its current size of $3.3 billion to fifteen billion dollars in five years.

Ben Sisario made a report.