The Smartest Decision Spotify Has Made In Years
The Smartest Decision Spotify Has Made In Years
After watching them flub everything they touched in podcasting, it’s nice to see Spotify come up with a plan for audiobooks that could be a win for everyone.
Welcome to Dispatch #53 of The Audio Insurgent. And Happy Halloween!
I hope regular readers have recovered from the three-in-a-week run of dispatches on public radio earlier this month. I’m glad I got that out of my system. More on that below.
Spotify recently announced a slow roll-out of 15 hours of audiobook listening per month for paid members in the U.K. and Australia, with the U.S. to come later this year. It’s a super smart idea and illustrates why you should take audiobooks more seriously than you probably do.
Today’s dispatch has three small items, then a big one.
Here goes…
[TODAY’S FIRST SMALL THING: GIVE ME SOME FEEDBACK] I’d like to gather some feedback and testimonials from readers of The Audio Insurgent. The occasion for asking is so that I can include testimonials in some upcoming promotional items, but I believe anytime you can get honest feedback is the right time to ask for it.
So let me know what you think, why you read it, why you value it, and what you hope this grows into. Worth noting, I want more than the positive stuff–if you have criticism, I’m eager for that too.
Thoughts of all kinds can be left here (and anonymously if you wish).
[TODAY’S SECOND SMALL THING: FREE WEBINAR ON MY PUBLIC RADIO MILLENNIAL RESEARCH PROJECT THIS SUMMER] I mentioned a few dispatches ago that I had wrapped up a research project looking at how Millennial listeners and givers to public radio view the industry’s values. It is pretty fascinating stuff.
PRPD has invited me to give a free webinar (that’s open to everyone) to repeat the presentation I did at the PRPD Content Conference in September. So if you would like to join, feel welcome. Registration is required, but, again, you do not need to be a PRPD member to attend. Feel free to join.
More information and registration is found here.
[TODAY’S THIRD SMALL THING: A LOOK BACK AT THE THREE PATHS] As many of you are well aware, the last three dispatches, shared over a week’s time, were a three-part look at a strategic framework for the future of public radio, which I dubbed The Three Paths.
As I shared at the beginning of that process, I originally had a lot of misgivings about sharing it. I observed a lot of need, but was unclear on the interest and openness to hearing what I had to say. The first part of that string of dispatches became the most-read dispatch in the history of this newsletter. By the time you read this, the three parts will have been read, believe it or not, more than 18,000 times.
I knew there was a need, but gratifyingly, there is a lot of interest in it too. Now, hopefully, those in the public radio system will actually do something with it.
To help the work have a long and user-friendly life, I’ve edited the three parts back into one doc containing all the components without all the intros, recaps, and endings, in hopes it can be a reference and accessed as people need it. You can view the entire doc online (which also should allow you to download it as a PDF or share it with others).
[TODAY’S MAIN THING: SPOTIFY’S NEW AUDIOBOOK OFFERING] Today we are going to discuss some of the ins and outs of audiobooks, why you, as a radio or podcast creator, should take that part of our industry more seriously, and how this is likely to work out for Spotify and its subscribers.
I feel it is important to disclose that I used to work for Audible/Amazon for a number of years. While it is a great company filled with many bright people, and I’m very proud of Audible Originals, which I was brought on to birth in 2015, I have a pretty clear-eyed take on the audiobook industry, which is much bigger and contains many more players than Audible. There, disclosure complete.
Spotify has been kicking around the periphery of audiobooks for a few years. In its swirl of purchases and investments in spoken word, it acquired a small firm called Findaway, a U.S. distributor of audiobooks, both direct to consumers as well as via a b2b marketplace. Findaway also has an indie audiobook distribution arm, similar to Audible’s ACX, where almost anyone can publish an audiobook, even if you don’t have a narrated version of your manuscript. Since then, not a lot has happened. Spotify kept talking about an audiobooks strategy, but nothing was forthcoming. Then, a little over a year ago, Spotify announced you could (kinda) buy audiobooks via Spotify (the “kinda” being the really confusing work-around process to make a digital purchase on an iOS device by any vendor, not just Spotify… and not Spotify’s fault).
That seemed to be it for a while, until earlier this month when Spotify announced that its paid premium members in the U.K. and Australia would be able to listen to up to 15 hours of audiobooks per month at no additional cost. Plans are for a similar roll-out in the U.S. to happen “later this year.” (When Spotify promises something “later this year” that tends to mean to look for it in 2-3 years time. Still waiting on that lossless audio… promised “later this year”... in 2021.) The offering is confined to a library of 150,000 titles, which is far smaller than Findaway’s library of 375,000 titles, or Audible’s library that’s close to twice that number. Spotify claims that 75% of the bestsellers lists will be available.
The archive of The Audio Insurgent contains a number of direct or indirect criticisms of Spotify’s path through spoken word so far, but I have to say that I feel very positive about this offering, and think it can prove a win for almost everyone, users, authors, publishers, and Spotify itself.
It surprises me how little most audio professionals know about the audiobook industry. I believe that one of the main reasons creators don’t investigate audiobooks as a distribution platform is because they don’t understand what they are (and aren’t), how they are created, or how they work. So here are some basic things to keep in mind about audiobooks, a bit of an Audiobook 101. Then we’ll get into the pros and cons of Spotify’s new offering.
Audiobooks are bigger than you think. The audiobook industry is bigger than the podcast industry. It always has been, though podcasting is catching up. Both have seen meteoric rises over the past 15 years, mostly fueled by the popularity of smartphones. I’ve seen estimates of audiobook sales ranging from $1.6B a year to more than $3.5B. I think the real number is probably right in the middle of that range. Audiobooks are now also bigger than the ebook industry too.
More people listen to audiobooks than you think. Keep in mind that audiobooks are a niche product. Take the number of people who actually read books today, and then realize that audiobook listeners are a fraction of that number. Still, 1-in-10 people have listened to an audiobook. That’s twice the number of “readers” from a decade ago.
And yes, they call themselves “readers.” This is very difficult to acclimate to, and people get pretty worked up over this: what is the act of consuming an audiobook? Are you a “reader” or a “listener”? A surprising number of audiobook enthusiasts refer to what they do as “reading” and that they are a “reader” when consuming audiobooks. It’s weird, but get used to it. People get so knotted up about this issue that some companies have commissioned brain research to demonstrate that the brain ingests read words and heard words the same. And yes, the same parts of the brain fire when listening to an audiobook as do when reading a print book. The brain thinks they are the same…so people argue.
Despite all the growth, “books on tape” aren’t really a thing anymore. Twenty years ago, most audiobooks were on a series of cassette tapes or CDs. Today, more than 90% of audiobooks are consumed digitally, thanks again to the development of the smartphone. Physical copies of audiobooks still exist (see the picture up top), but physical copies have mostly gone the way of the floppy disk.
How audiobooks are made. 99%+ of audiobooks are produced exactly the same way: a narrator is hired to take a manuscript into a voice booth and read it out loud. Since the average audiobook is 10-12 hours, the read thru can take a few days time. With non-fiction that is really tied to the author’s point of view, the author frequently reads their own work. However, just as often, they don’t. And with fiction, it is rare to have an author read the title. When a narrator is required, audiobook producers usually pull from a large pool of actors/voice talent. The recording is cleaned up, edited, prepped for distribution, and ready to go. The whole process can be completed in a week. (It’s worth noting that this entire process is ripe for AI disruption, as the narrator fee, studio rental, and the time it takes to record and edit a title are the biggest resource expenses in creating audiobooks. AI can eliminate all the incremental costs and reduce the time to produce a title from a week or more down to just a few minutes…but note the point below about narrator loyalty.)
Audiobooks are cheap to produce…kinda. The biggest expense in producing an audiobook is the narrator. Rates vary, but most narrators reading a title from a major publisher receive ~$3,000 per title. Besides that, you have studio rental and a producer/engineer to record, edit, and insert markers and metadata. That’s it. So most major audiobook titles cost about $5,000 to produce.
That seems super cheap compared to almost any narrative or researched podcast. While audiobooks can cost $300-$500 per finished hour, a narrative or deeply researched/scripted podcast can cost as much as 30-60 times that amount. Even a scrappy chat show can cost several times that amount.
But this is all highly deceptive, as audiobooks are a derivative product, meaning they take a manuscript that’s already written and are just producing a new version of it. When people focus on the $300-500 per finished hour number, they are neglecting all the investment in researching and writing the manuscript. Once you factor those resources costs in, audiobooks start to feel more equal to podcast production expenses.
Despite the size of the industry’s revenue, when looking at individual titles, audiobooks move far fewer units than podcast titles. This is also the “dirty little secret” of book publishing too. Most people are shocked at how few copies most books sell, regardless of the format. While movie receipts, game and app downloads, and streaming hours are measured by the millions, most book titles sales are measured in the hundreds or thousands per week. You can get a pretty good place near the top of the NY Times bestseller list with sales of 10,000 copies of your book at launch. If you had a podcast with 10,000 downloads in its first week, it is pretty certain you won’t appear anywhere on the charts on any podcast platform. Most audiobook titles sell very modestly, which, for creators, affects their reach. Frankly, this is why I left Audible. While I was really proud of what we built with Audible Originals, I could never get happy creating work for such limited audience.
Audiobook listeners are different from podcast listeners…and different from book readers. Many people assume that a listener is a listener and that a reader is a reader…not true on both fronts. Audiobook listeners have a few things in common with podcast listeners, mostly that many of both treat listening as a companion medium, meaning they listen while doing other things. (However, there are a shocking number of audiobook listeners who use audiobooks as a primary activity, meaning they just sit there and listen. Odd, I know, but it happens.) Also like podcast listeners, they often listen to unwind or escape from their day. But that, frankly, is about where the similarities end.
Audiobook listening is a very passive experience, for many, almost meditative. The energy levels and the engagement required from listeners is way less than for a podcast.
Audiobooks listeners are more likely to “read” fiction than nonfiction titles (65% of audiobooks sold are fiction, compared to around 55% for print sales). Also, while podcast listeners are more personally eclectic in what they listen to, audiobook listeners tend to be genre loyalists. Print readers also tend to be genre loyal, but audiobook listeners take this to another level. They don’t really love listening to audiobooks, generally, as much as they love listening to books in a genre: romance, science fiction, business, self-help/wellness/self-improvement, different types of historical fiction, and so on. Audiobook listeners tend to go deep into their genres and really aren’t general readers. They stick to their chosen lane. And man, these genres get very niche, even more so than podcasting. A look around audiobook providers will reveal some really wild stuff, like a deep vein of Amish romance titles and even a group of titles, with a loyal readership, that is categorized as “dinosaur erotica” (yes, you read that correctly).
Marketing for audiobook titles is almost non-existent…and largely unnecessary. Again, it is important to remember that most audiobooks are derivative products. Not only do they benefit from the investment in creating the manuscript, they benefit from the marketing and earned press attention that the book gets–thus requiring little to no additional marketing for the audiobook itself. When a title is reviewed, or a publisher buys an ad, or the author is on the Today Show, the audiobook sales increase, just like the print version.
Audiobooks have a cred problem. Let’s call it like it is. Audiobooks aren’t cool. Many in the audio industry look down on them, since they are a derivative product that isn’t organic to audio. They also point to the comparatively low production quality standards (it’s just a recorded voice, not thrills or frills) and lesser than other forms of audio like podcasts or broadcast radio. Yet, those who dismiss it are not seeing the potential. I’ve always told my staffs that if you are chasing “cool,” then you are always in the wake of somebody else’s creative vision. Don’t worry about being cool, make cool things, even in uncool spaces, and define what’s cool, instead.
Audiobook “readers” care about the quality of the narration. While it is an inexpensive and simple production, audiobook readers care a lot about who is reading the title and how well they do it. Every audiobook platform features the ability for readers to rate the narrator and their performance. Many platforms allow readers to follow favorite narrators and many audiobook listeners have favorite narrators and will often choose a title simply because they are a fan of the narrator.
The audiobook industry is reluctant to innovate, change, or do very much self-examination. Publishers make a lot of money off of audiobooks. A small upfront investment with zero incremental costs. That’s kind of great. But there is no appetite to change or innovate because no one wants to jeopardize the margin.
That said, there has been some experimentation with form. And this is where things get interesting in podcasting. Despite the lack of appetite to rock the boat or play with the form, a number of companies (most notably Pushkin Industries) have tried to blend podcasts and audiobooks, or at least enhance the audiobook production by injecting recorded interviews, produced features, and other elements to raise the production value. The problem is the economic expectations for an audiobook are based on that $5k per title budget. Even if you double it, you are unlikely to get very far with such limited resources in hand. Most publishers or authors are unwilling to spend more because of margin expectations and little indication that the enhanced production will drive additional sales.
That reluctance to spend also affects marketing, as an independent audiobook that doesn’t have marketing behind the print title to generate interest really has a tough road ahead of it. You are marketing to a niche within a niche, and most press are hesitant to cover audiobook-first titles, given the limited audience for them.
Also, this is may be an example of “just because you can, doesn’t mean you should.” Listeners aren’t that interested in enhanced audiobooks because, well, that doesn’t solve any problems for them. While the production is enhanced, the listener’s enjoyment really isn’t all that different.
Audiobook subscription services offer a new revenue stream for creators of other types of spoken word content. If you look through the catalogs of audiobook providers, you will find a lot of things that aren’t audio versions of books. There are lecture series, audio dramas, courses, even language instruction. This is a business model that lots of podcasters may want to consider for older catalog. Instead of offering it for free or getting fractions of pennies for remnant audio ads on older downloads, perhaps offering it for sale in these services is worth exploring. If I had a catalog of older fiction/scripted series, multiple-episode narratives, or other fairly evergreen content created for podcasting, I would do some serious modeling on whether it would make more sense to put it in an audio subscription service, especially if it was period fiction, true crime, sci fi, or a thriller.
So, all that is very interesting, but why should I care about Spotify offering 15 hours a month audiobooks to everyone? Because it will equalize a competitive form of listening. Spotify’s agenda is to diversify what members listen to (the more they listen to non-music, the less Spotify is tied to their huge pay-outs to the major music companies). For a podcast creator, that means all those Spotify listeners who have embraced podcasting over the past five years will now have a lot more choice for listening. It isn’t a stretch to see that it may actually negatively affect some listening to podcasts on the platform with some users.
That said, there are many upsides.
Many immediately look at this offering as being a threat to audiobook subscription services like audiobooks.com, Kobo, Scribd, and, of course, Audible. I don’t think that will be the big opportunity here. I think Spotify’s audience for this will come from samplers and lighter audiobook listeners.
Having a subscription to an audiobook service is a bit like being a foie gras goose. Compared to the most audiobook consumers (the average audiobook user listens to 8 audiobooks a year), a subscription is appealing to the heaviest of audiobook users (at 12 or more books per year–now we are talking about a niche of a niche of a niche). But this discounts the largest group, by far, of audiobook consumers–the light users who listen occasionally to audiobooks, purchasing them a la carte per title (like most people buy printed books).
These light users are the people who would find Spotify’s audiobook offering enticing, because it allows them to enjoy audiobooks at a pace that matches their use of the medium, without having to purchase (pretty much the same consumer promise that built Spotify as a music service). Think of it that way–it is a value to them because it matches their appetite for audiobooks without an added charge. In fact, it may save them money.
I also believe that there is a group of users who will try audiobooks for the first time because of the low barrier to entry: it's right there in the app, and there is no incremental costs, just listen. Some of these dabbler users will habituate to audiobooks (though most won’t), but that still can potentially be a net gain.
As has been discussed endlessly with Spotify, there is significant concern about how this model will affect payments to authors. Trust me, authors are paid as bad or worse as musicians, generally. Anything that could reduce what authors are paid isn’t good. I’m hopeful that what exists between Spotify and publishers (and no one is sharing the details at this point) is something akin to how Kindle Unlimited works, where royalties aren’t paid on the title, but the number of pages read. That model prompted a lot of similar concerns when it first came out, but the bottom line to authors has, for the most part, worked out.
Regardless, this is an experiment that I think is smart, has potential to positively impact the world for creators, and may actually create new spoken word enthusiasts with these new listeners.
Or, er…readers. Or, whatever. It is progress. That’s all that matters.
[ONE MORE QUICK THING: PODCASTS AND YOUTUBE] I’ve been wrestling with this topic a lot lately myself and have been loath to write about it. Thankfully someone else has and did a much better job than I would have done. Matt Deegan’s Matt on Audio has a new post out that has one of the most comprehensive and clearest descriptions of what’s going on, what the opportunities are and expectations should be, and a literal walk-through of how to set your podcast up on YouTube. While you are there, you should subscribe to Matt's Substack, it is routinely exceptional and one of my recommended Substacks.
[COULD WE TALK ABOUT SOMETHING ELSE, PLEASE? INSTRUCTIONS FOR LIVING A LIFE]
From the poem “Sometimes” by Mary Oliver:
Instructions for living a life:
Pay attention
Be astonished
Tell about it
Okay, that’s it for today.
If this was forwarded to you or you read this online, would you mind subscribing?
And while this is free, you are also always welcome to buy my book or (even better) buy me a beer.
Make great things. I’ll be listening.
--Eric