Spotify takes on Amazon with a huge leap into the audiobook business

After taking on Apple and Pandora, Spotify appears to be setting its sights on Amazon.

In what seems to be the beginning of a new phase for the company, Spotify on Tuesday announced that U.S. subscribers will be able to purchase and listen to more than 300,000 audiobook titles. Users will have to pay separately for each book—there’s no audiobooks subscription plan yet—but with expectations of a growing interest in audiobooks in the coming years, this seems to be setting up a battle between Spotify and Amazon-owned Audible.

At present, audiobooks represent just 6% to 7% of the overall book market, says Spotify. However, the category is growing at a rate of 20% year over year. Nir Zicherman, Spotify’s vice president and global head of audiobooks and gated content, calls it “a substantial untapped market” in a blog post.

“We believe that audio and long-form content is a much bigger business than what many would have thought,” says Zicherman. “Our expansion into audiobooks is a significant proof-point in that belief. And this is just the beginning. Just as we did with podcasting, this will introduce a new format to an audience that has never before consumed it, unlocking a whole new segment of potential listeners. This also helps us support even more kinds of creators and connect them with fans who will love their art—which makes this even more exciting.”

The à la carte offering, at present, carries a fairly hefty price. Want to listen to Dave Grohl’s The Storyteller: Tales of Life and Music?  It’ll cost you $25.90. Harry Potter and the Sorcerer’s Stone? That’s $32.90.

That gives the upper hand, for now, to Audible, which offers a variety of subscription options starting at $7.95 per month—with access to thousands of audiobooks and podcasts, but not new releases or best sellers. (Audible also offers a free 30-day trial to hook subscribers.) Its highest tier, $229.50 per year, includes access to the Plus Catalog plus 24 credits for premium selection titles. Audible, currently, has about twice the size of Spotify’s new library.

With 188 million premium subscribers and 450 million monthly active users, though, Spotify knows how to hook an audience. The company has acknowledged its lack of experience in this sector, saying it had to learn to present audiobooks in a way that was familiar and intuitive to current subscribers. Once audiobooks are as familiar as podcasts for users, it opens up a world of possibilities. By using a purchase-to-listen model, Spotify can gauge interest among users and gather data on what titles they examine. 

“The offering available today in the U.S. is just the first iteration of audiobooks on Spotify,” says Zicherman. “We’ll learn a lot through this launch and leverage those learnings as we enhance the experience with new features, plan for launches in additional markets, and innovate on the format to benefit listeners, authors, and publishers.”

Another possible option: an ad-supported model for audiobooks.

Spotify, of course, has not hinted at anything other than the à la cart model, but the company has been clear that it expects to assume a leadership position in the space, ever since CEO Daniel Ek first began laying the groundwork for the rollout of audiobooks back in June.

“Just as we’ve done in podcasting, expect us to play to win,” Ek said in a presentation to investors. “And, with one major player dominating the space, we believe we will expand the market, and create value for users and creators alike.”