Spotify Expands Content Offering Beyond Music and Podcasts to Include Audiobooks for Subscribers

A year after introducing à la carte audiobook sales, Spotify now provides 15 hours of books each month to paid users.

Spotify’s business was stagnant four years ago. Apple had surpassed it as the most popular paid music service in the US, but losses were increasing and user growth was slowing.

Spotify’s CEO, Daniel Ek, concluded that the firm needed to transition from a music service to an audio-everything shop. Podcasts, a business that has helped improve ad revenue, were the first missing element.

Mr. Ek has now turned his attention to another fast rising medium: audiobooks.

Spotify said on Tuesday that it will begin delivering 15 hours of audiobooks every month as part of its streaming service for premium members in the United Kingdom and Australia. It will increase its service to subscribers in the United States this winter.

Spotify’s move into books has the potential to upend the retail environment for audiobooks, a rapidly rising category of publishing that has long been controlled by Amazon-owned audio store Audible.

Mr. Ek compares Audible’s audiobook domination to Apple’s previous stranglehold over music and podcasts. With its monthly subscription service and podcasts, Spotify developed its business by disrupting the music industry. In an interview, Mr. Ek stated that he saw the opportunity to do the same with audiobooks.

Having books on Spotify, which has 220 million premium paying subscribers globally, might help publishers reach a large number of new people. Spotify has the capability of recommending appropriate audiobooks to podcast listeners who are interested in specific topics, as well as promoting audio titles to Spotify users who have listened to a podcast featuring an author.

Spotify will also provide algorithmic suggestions to consumers and share some basic demographic information with authors, according to David Kaefer, Spotify’s head of audiobooks.

Hachette Book Group, whose writers include David Sedaris, James Patterson, and Donna Tartt, is making almost 7,000 novels available on Spotify.

“I see this as a huge opportunity to be in the company of Joe Rogan, Taylor Swift, and Beyoncé,” Ana Maria Allessi, Hachette Audio’s vice president and publisher, said.

However, there is worry that Spotify’s strategy, which involves experimenting with a new revenue model for book sales, may upend the profitable and booming audiobook industry. According to an examination of a publisher’s contact with agents that explained the conditions, rather than paying for each audiobook that a consumer begins listening to, the firm has proposed paying for the length of time that the customer listens.

According to Spotify, the typical audiobook lasts seven to ten hours, which means customers may listen to around one and a half books every month, but certain popular novels can run for much longer. Subscribers may listen to as many books as they desire, and heavy users can pay $10.99 for an additional 10 hours of audiobook content.

The new strategy promises to be less time-consuming than Spotify’s debut entry into audiobooks last October, when it launched purchases that needed users to pay for each title and complete many steps before listening.

Spotify has agreements with the top five US publishers, as well as hundreds of others, including smaller businesses and self-published writers. To begin, it will have a collection of more than 150,000 titles. Its contracts with various publishing houses vary, and some publishers are more cautious than others. Some large publishers, such as HarperCollins and Penguin Random House, have uploaded their complete audio libraries, but Macmillan is starting with only a subset of its audiobooks.

Mr. Ek stated that he had heard the writers’ and publishers’ concerns but thought that the 15-hour limit would maintain the value of audio works while attracting new users.

“The economics are very favorable to the book industry,” he stated. “Everyone got on board because they see that ultimately, for heavy consumers, this is going to be a net positive.”