Spotify Is Bringing Its Freemium Model to Audiobooks

pcmag.com:

Spotify wants to apply its freemium model—which allows people to choose between paying for the service or having their experience punctuated by ads of varying quality—to audiobooks.

"We’ve moved from being a music discovery and playback service, to a fully-fledged platform where artists and creators can create, engage, and earn," Spotify CEO Daniel Ek said(Opens in a new window) during the company's annual Investor Day on June 8. "A platform fueled by subscription, advertising and creator service models, applied to music, podcasts, audiobooks and more."

That expansion depends on Spotify's acquisition of an audiobook distribution platform called Findaway. The deal was announced in November 2021, and Spotify initially believed it would close before the end of the year, but The Verge notes(Opens in a new window) that the US Department of Justice's antitrust division has yet to approve the acquisition nearly seven months later.

That didn't seem to dampen Ek's enthusiasm. "While it’s still early," he said, "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. "

The plan to apply Spotify's existing business practices to audiobooks wasn't exactly shocking. But it will be interesting to see how people respond to having ads inserted into their audiobooks. I suspect it would be more jarring to hear a personalized advertisement in the middle of "1984," for example, than it would be to hear yet another Squarespace ad in literally any podcast.

Investors could see audiobooks as "an annual opportunity of $70 billion