Insider November 18, 2021-Why Spotify acquired an audiobook company


Happy Thursday, insiders. After weeks of slowly moving news, I can officially say that the news is back! Something is happening. But first! I promised to put forward more ideas on Spotify’s large-scale audiobook acquisition in the form of Findaway, and I am fulfilling it. let’s start.

Last week, Spotify Announced plan Spend an undisclosed amount to acquire Findaway, an audiobook creation and distribution company that plays an important role in the industry. For those who have been following Spotify’s audio movement, the announcement may be meaningful-ahem, all of us here-but for those who haven’t followed, let’s briefly summarize: Spotify hopes Become the place where you consume all audio. This purchase aims to achieve this goal.When you open Spotify this time next year, the app may be highlighted Armchair expert The episode airs alongside Taylor Swift’s latest single and Barack Obama’s latest book. This will be a crowded but potentially powerful destination.

But at the same time, Spotify’s in-depth audiobooks are very different from podcasts. There are powerful publishers to deal with, independent revenue models, higher barriers to entry, and a large amount of intellectual property navigation. To better understand why Spotify sees the future in this field, let’s break it down by the things you need to know when considering this deal.

Findaway is the anchor of audiobooks

Let’s start with the most approachable ideas for our broadcasters. Similar to Spotify’s acquisition of Anchor to simplify the recording and publishing of podcasts, Findaway plays a similar role in the audiobook field. Now, it’s not as easy as recording audio on the phone, superimposing some music and pressing the publish button to make an audiobook (at least high-quality). Audiobooks usually include the narrator (if not an actor), audio clips, etc. It is usually at the level of a highly produced podcast.

Findaway runs a company called Voices, which sets up a narrator for the author and ensures that the content is well produced, but in exchange, the author pays Findaway fees to achieve this goal and use their services. This provides a clear business opportunity for Spotify. It will interact with creators, which is what it has done through Anchor and its musical works, and generate revenue at the same time. Considering that the entire Findaway team is dedicated to cracking mobile recordings in Anchor, it may also improve Findaway’s technology.

Once a book is recorded, Findaway can also distribute it, thereby generating revenue. This brings us to the next thing related to this transaction.

Findaway turns Spotify into an audiobook publisher

Spotify will now play an indispensable role in the field of audiobooks-major publishers have commissioned Findaway to distribute its content to retailers, libraries and listening platforms. Unlike podcasts, in podcasts, the host has an RSS feed that they can enter wherever they want the show to appear. Audiobook publishers and authors usually work with distributors to send their content to the storefront and ensure all data Are inserted correctly and so on. Findaway’s solution is called Audio engine.

Mark Pearson, the CEO and founder of Libro.fm, which sells audiobooks and supports independent bookstores, said that this distribution business is critical when considering the Spotify deal.His platform works with Findaway to bring books to the Libro.fm app in some cases. He said that the reason why many publishers distribute books through Findaway is “we [on the app side] It’s actually not easy to do it on the backend,” he said. “There is a lot of content involving metadata and files, and it’s really hard work to provide this content to listeners in an application format. “For an organization, it would be a lot of labor to adequately handle this.

A familiar podcast company has also collaborated with Findaway to publish its audiobook: Pushkin Industries. Chief Marketing Officer Heather Fain told me that the team worked with Findaway to distribute their audiobooks anywhere outside of Audible. The reason for this is because it is easier than managing the many places where a book is located. Findaway distributes audiobooks and ensures that they display correctly on various applications and platforms, including Apple Books, Kobo, Public Library, and Libro.fm. (Yes, there may be a world where Spotify provides audiobooks to Apple.) Regardless of the structure of the distribution transaction, Findaway is making money, which represents a new revenue line for Spotify.

Finally, there is another aspect of this transaction that needs to be considered: Spotify will become a bookseller.

With Findaway and audiobooks now seemingly a priority, Spotify may start selling them from within the app. This may be essential for Spotify’s quest to be a place where people can get all the audio. This is a retention strategy-don’t turn to Audible for your audiobooks, continue to use Spotify-if the product is competitive, you may also recruit people to join the platform.

If Spotify sells books a la carte, the profit margin will be much higher compared to podcasts. Even if the CPM of a podcast is $50, it means that each listener of the podcast will only earn 5 cents. Charging $15 per listener for audiobooks is a more profitable arrangement.

In addition, Spotify’s revenue has both fallen: anywhere Findaway is involved, Spotify can make money—as a retailer, and through the production and distribution of audiobooks.

Looking to the future, I think Spotify may eventually offer different subscription levels, allowing paid subscribers to download an audiobook, A Audible, etc. every month. It can also try to launch an unlimited audiobook program, such as its Swedish competitor Storytel. It is also possible for Spotify to broadcast exclusively, sign agreements with publishers and authors to bring books to its platform-this is a classic Audible move, but given Spotify’s preference for exclusive podcasts, this move makes more sense. If Spotify can become the main place for people to buy and listen to audiobooks, then in addition to all other audio, it may also force publishers to put more books on its platform at a better price.

If there are any signs of Spotify’s pace in the podcasting world, the integration of audiobooks may happen soon. It took Spotify only two years or so to start claiming it is the top podcasting app. Can it do the same with audiobooks? The world is developing rapidly, and I think we will introduce more audio books in this newsletter.

Well, leaving all of this aside, let’s learn a little more about Spotify news…

Spotify is launching subscription services to 33 other markets

Spotify is Aggressive expansion The coverage of its podcast subscriptions allows anchor creators in 33 new countries to place their shows behind the paywall. This also means that anyone who has set up this feature in the United States can sell their subscriptions to listeners in these countries. Incremental updates for our purposes, but I am closely tracking the storyline of the subscription, so this is what I had to publish.

The next step into the Spotify field…

JJ Abrams’ bad robots launches a podcast arm

Hollywood can’t get enough podcasts, and so can Spotify. Bad Robot, JJ Abrams’ production company — Oh my god, after six seasons, that robot bumper was burned in my mind Lost — And Spotify are “cooperate” When an audio production department called Bad Robot Audio is established, the department will include the development and production of scripted and non-scripted content. The former Spotify enthusiast is also hosting the show: Christina Choi is the head of the podcast. A Spotify spokesperson told me that this partnership is a “priority transaction in which we have exclusive rights.” This is not an advertising transaction. Obviously, both Abrams and Bad Robots are big names, and this investment provides more evidence that Hollywood will see the dollar sign when considering audio.

Vox Media acquires Criminal Productions

Vox continues to spend money on podcasts, and this week announced the acquisition of a crime production company. (As you might expect now, this is the Hot Pod that I disclosed is also owned by Vox.) Crime productions from public media alumni Phoebe Judge and Lauren Spohrer include three podcasts: criminal, this is Love, with Phoebe read a mysteryThis transaction further demonstrates Vox’s interest in the audio field; it get Cafe Studios in April effectively provided the company with a starting point for podcast subscriptions. Long form with Gastropod In the past six months. Not to mention the acquisition of this newsletter, but frankly, I don’t think it has anything to do with Vox’s podcasting interests. It may be that our PR team’s reporting troubles are more important than anything else.

Anyway!

To summarize, I thank you for sticking to this longer article of mine, and we have another social audio news roundup. This time, it is very concerned about funding. It seems that VCs really want to spend money on audio products. I will focus on these news word by word, because it is not about details, but about trends, do you know?

Money is stupid, isn’t it? Aria will come to you tomorrow and I will be back on Tuesday. See you in the future! ! !



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