Spotify’s foray into free audiobooks for Premium listeners has sparked excitement among users, but concerns about author compensation are coming to the fore. As RouteNote stated, the streaming giant recently announced granting individual Premium subscribers in the UK and Australia 15 hours of free monthly audiobook listening, with the feature expected to roll out in the US soon.
Will Page, Spotify’s former chief economist, and author of “Tarzan Economics,” expressed reservations about the compensation structure for authors in a LinkedIn blog post. Drawing parallels with the music streaming industry, Page highlighted the complexity of determining a fair compensation structure for audiobook authors.
In the music industry, a simple metric dictates royalties: play 30 uninterrupted seconds of a song, and a royalty is paid. However, audiobooks lack a clear threshold for compensation. Page raised questions about how royalties would be handled if only a portion of an audiobook, such as a single chapter, was streamed. The variability in audiobook lengths further complicates matters, especially when considering diverse works like the lengthy “Anna Karenina” compared to shorter pieces like The Old Man and the Sea.
Page shed light on the financial dynamics of the audiobook industry, revealing that authors typically receive a mere 7 percent of the revenue stream. The intricate breakdown includes a 20 percent VAT, a 60 percent reported margin for retailers, a 75 percent cut for publishers, and a 15 percent share for agents, leaving authors with only a fraction of the original work’s earnings.
As Spotify ventures into the audiobook realm, addressing these concerns about fair compensation for authors becomes crucial, especially as the platform integrates free listening into its Premium offerings.
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