Spotify taking on Amazon with audiobook push

The world’s biggest music streaming service — Spotify — has plans to take on Amazon Audible’s dominance in audiobooks.

Spotify bought audiobook distribution company Findaway for an undisclosed amount in November 2021.

It now appears to be making a play to ensure that acquisition delivers a good return on investment.

Speaking at its Investor Day 2022, Spotify founder and CEO Daniel Ek said audiobooks were a massive opportunity for the company.

“Today, the global size of the book market is estimated to be around $140 billion,” said Ek.

“That’s inclusive of printed books, e-books and audiobooks, with audiobooks having only about a 6-7% market share.”

“But when you look at the most penetrated audiobook markets, it’s actually closer to 50% of the market,” he explained.

Ek said that could make audiobooks an industry worth $70 billion each year, in which Spotify could expand and compete.

Daniel Ek, Spotify founder and CEO

Amazon’s Audible audiobook store and streaming service controlled around 41% of the US audiobook as of 2018, according to Codex Group Research.

In some verticals, analysts estimate it commands as much as 90% of the digital audiobook market.

Industry analysts have been critical of the company’s use of digital rights management (DRM) software on audiobooks to prevent people from listening to them outside of Audible.

That is despite Amazon announcing it would remove Audible’s DRM after it acquired the company in 2008.

Ek issued a thinly-veiled threat to Amazon concerning Spotify’s plans.

“Just as we’ve done in podcasting, expect us to play to win. And, with one major player dominating the space, we believe we will expand the market, and create value for users and creators alike,” Ek said.

“While it’s still early, we expect audiobooks to also have healthy margins, above 40% and be highly accretive to the business.”

“And here again, we will apply the same differentiating foundations of ubiquity, personalization, and Freemium to attract both creators and users, and drive engagement.”

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Spotify taking on Amazon with audiobook push