Spotify’s Audiobook Gamble Pays Off: Huge Royalty Jump for Authors, Young Listeners Hooked

Spotify’s expansion into audiobooks seems to be paying off. The music streaming giant recently released data showing that over one-quarter of their Premium subscribers are engaging with the new audiobook content option.

This suggests Spotify’s move into audiobooks has been well-received by customers and is providing a meaningful source of additional revenue for content creators. According to Spotify, without their platform independent authors would have only seen about a 23% increase in royalties over the past year. However, with audiobooks now available on Spotify Premium, those same independent authors have experienced a dramatic 95% jump in earnings.

Younger users in particular seem interested in the audiobook selection. Data showed the 18-34 demographic, who account for over half of all listeners, are spending on average over 2.5 hours engaged with each audiobook they start in the first two weeks. Customer retention is also high, as Spotify has more than doubled the number of users purchasing additional listening time each quarter since the rollout began.

To help drive discovery of new titles, Spotify is leveraging its existing podcast network to cross-promote featured authors. For example, when RuPaul was a guest discussing his memoir on the popular Call Her Daddy podcast, listenership of that audiobook grew by 34% the following week. Major publishers like Penguin Random House are also on board, having signed licensing agreements to make their catalogs available.

It’s clear that Spotify’s entrance into audiobooks last year opened new opportunities for both listeners and content creators. By leveraging its existing platform and customer base, Spotify was able to quickly gain ground against dominant competitors in this emerging market segment.