Setting the Stage
Holding fast to the belief that
implementing the streaming of Audiobooks into their App could open doors to
massive new opportunities, Spotify is in it to win it when it comes to
Audiobook Streaming. This comes at the helm of the Company’s acquisition of
Findaway last year. Findaway gained prominence in the Audiobook Industry as it
allowed Users the ability to create, distribute and monetize their work related
to the authorship of their audiobooks. It is then not beyond the realm of
disbelief that by acquiring Findaway, Spotify could very well have had attained
a major part of the Audiobook ecosystem in the Audiobook Industry. This,
combined with the fact that the Co-founder of another prolific Audiobook
Company Anchor, will be overseeing the development of the Audiobook Operations
of Spotify, all blend together to bear good news for Spotify and could lay the
evidence for the Company to experience a fruitful venture with its foray into
the Audiobook Industry.
Details of the new
Model
Spotify has made it clear that it will
be taking cues from their Music Streaming and Podcasting Models, by offering
some Audiobooks for free to its Users. The CEO of Spotify Daniel Ek stressed
the importance of the Freemium Model for Spotify, stating that it will continue
to apply to Audiobooks as well for the Company, which gives way to the fact
that Users can expect their Audiobook sessions to contain Ads within, as
Spotify’s Freemium Model thrives primarily on Ad Monetization. When comparing
this aforementioned fact with Spotify’s now Audiobook Industry Competitors such
as Amazon Audible, it can be ascertained that this shakeup in the Audiobook
Industry with the Implementation of Spotify’s Freemium Model could pave the way
for a major change in how Users interact with Audiobooks in general. Based on
the stats, the Audiobook Market was apparently worth $1.6 Billion in 2021,
making it greater than the Podcast Market which stands at $1.4 Billion
currently. Taking heed of these stats, it is made apparent that the Market for
Audiobooks is vast and with Spotify’s Freemium offerings, it could make the
Company the go-to-spot for most Audiobook lovers all across the World,
rendering all other competitors obsolete. However, it must also be taken note
of that it is currently not entirely clear whether which types of Books will be
offered in the Freemium Model, as the top-tier and popular books could very
well be paid on Spotify’s platform as well.
The Implications for
the Company and the Industry
As mentioned prior, the Audiobook Industry is indicated to be large when compared to Spotify’s other major Business Model of Podcasting, with the introduction of Audiobooks on the Spotify Platform the obvious Worldwide effect could be that there will now be a larger audience exposed to more Audiobooks all across the World due to Spotify’s strong brand association. However, for the Company itself it could bring some potentially negative ramifications, most notably being lesser revenue per unit because of the implementation of the Freemium Model. This could greatly depress Spotify’s overall Revenue Stream in the long run as the Audiobook Market could depreciate in the future and the investment dealt by the Company into the implementation of Audiobook Streaming could all end up being for naught.
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