News last week that Spotify acquired the Audiobook platform Findaway. This helps the streamer reach its goal of providing “a destination for all things audio both for listeners and creators” - combining music, podcasts, live audio and now audiobooks.
There’s actually already a decent amount of audiobooks on Spotify, particularly in some languages, like German. The acquisition, as Spotify states: “…will accelerate Spotify’s entry into the audiobook space”.
Whether it’s just the catalogue that they’re after, or the broader Findaway business, remains to be seen. Findaway provided a place for authors and publishers to put audiobooks which the company then distributes to apps and services like Scribd, Chirp and Nook. Alongside that, they have a services business that helps create audiobooks and a devices operation that releases product that comes with audiobooks pre-installed.
Indeed, part of the benefit for creators in using Findaway is that it gives publishers broad distribution to a variety of suppliers including the big three of Amazon, Audible and Apple, alongside the smaller players and also the library platforms. The market leader - ACX (owned by Audible) concentrates on Audible, Amazon and Apple (where the bulk of consumption is).
It’ll be interesting to see if Findaway’s distribution partners still want to play ball when it’s owned by a competitor in Spotify, and therefore whether it becomes just a route for publishers to just get on the streamer.
The other thing to see is whether the self-service part of Findaway (authors creating their own audiobooks) is aligned with Anchor, Spotify’s product that does the same for podcasters. Anchor gets a podcast into Spotify very easily, but it also acts as a distributor to other podcast destinations like Apple Podcasts. There’s definitely some similarities there. Spotify did also have a self-service distribution system for music artists, but it mothballed that in 2019 (now you need to use a distributor like TuneCore or CD Baby)
Spotify’s growth into multiple verticals has meant that its partner and content management is a little confused. For musicians you can only have a direct relationship through a larger publisher (or aggregator), not as a creator. For podcasters its optimised for creators through Anchor, but larger publishers have a variable mixed bag of services. For Greenroom (its live product) they’re seemingly looking after creators, but not publishers. And then with audiobooks they, at the moment, have a route for both creators and publishers.
Of course, why Spotify has expanded out of music is for two reasons. Firstly their music deals still seem to lose them more money as they add subscribers. At some point they will likely renegotiate with the record companies and they will be able to point to the fact that music only accounts for x% of their listening, so is it time to do a new deal etc? Even a small reduction will generate millions of profit to the bottom line. The question is whether Sony, Warners and UMG will ever want to play ball.
However, even if that never happens, podcasts and Greenroom allows it to introduce advertising products, even for its paying subscribers (who only don’t get ads with their music). The addition of audiobooks gives them the opportunity to up the subscription price (or develop an ad-funded operation) to try and increase the margin in their business.
Spotify are also betting on getting consumers to abandon their Apple Podcasts or Audible app for just hitting a green Spotify button. This will then give them a lock on the audio consumer, that they can sell to, and more importantly sell up.
There’s a new edition of the Media Podcast with guests Faraz Osman (MD of TV production company Gold Wala) and Jack Davison (EVP of TV strategy firm 3Vision). We talk Dacre & Ofcom, ITV profits, BBC & Stonewall, the new audio development fund and more. Take a listen!
Over at Fun Kids, I’m pleased we caught up with the Prime Minister to round out our Climate Heroes campaign. He answered kids’ questions and played Dan’s Yes or No game.