In a recent revelation during its Q4 2023 earnings call, Spotify announced its ascent as the second-largest provider of audiobooks, The Guardian reported. This makes it trail behind Amazon’s Audible despite operating in the red. The streaming giant also offered insights into the evolving landscape of audiobook consumption, highlighting a shift in listener preferences and consumption patterns.
Spotify CEO Daniel Ek emphasized the platform’s ability to attract a diverse audience to audiobooks, noting a surge in interest in titles that diverge from conventional best sellers. Unlike Audible’s credit-based model, where subscribers often opt for established titles or renowned authors, Spotify’s approach offers users a set number of monthly hours for audiobook listening. This has led to increased exploration of lesser-known titles and emerging authors, enriching the audiobook ecosystem with diverse content.
Meanwhile, Spotify’s recent strides into the audiobook market come against a backdrop of financial resilience and strategic restructuring efforts. The acquisition of rights to 200,000 audiobooks for premium subscribers, including notable titles like Prince Harry’s autobiography Spare and David Mitchell’s Unruly, contributed to a €75m operating loss in the fourth quarter. Despite efforts to achieve sustainable profitability, Spotify reported significant losses in the past year, driven partly by operational restructuring and redundancy programs.
Despite operating losses amounting to €446m in the previous year, the Stockholm-based company witnessed a 23 percent surge in monthly active users, reaching 602 million by year-end. Notably, fourth-quarter losses decreased compared to the previous year, with Spotify reporting a €270m loss in 2022.
A significant portion of the losses stemmed from costs associated with a mass redundancy program, as Spotify underwent a 17 percent reduction in its global workforce, amounting to approximately 1,500 job cuts. However, excluding exceptional charges, the company managed to achieve a €68m operating profit in the fourth quarter, reflecting strategic cost management efforts amidst operational restructuring.
Spotify experienced a 4 percent increase in premium subscriber numbers, reaching 236 million in the final quarter of 2023. This growth trajectory translated into a record year, with 31 million new subscribers added. Despite price adjustments, new subscriber acquisition remained robust, contributing to a 9 percent revenue growth, totaling €3.7bn in the fourth quarter. Additionally, total ad-supported revenue surged to €501m, marking an all-time high.
Spotify’s foray into audiobooks has garnered significant traction, with popular titles like Prince Harry’s Spare, Yuval Noah Harari’s Sapiens: A Brief History of Humankind, and Rory Stewart’s Politics on the Edge captivating listeners. Spotify has been offering 15 hours of free audiobook listening per month to premium subscribers in select regions since October.
With a keen interest in tech, I make it a point to keep myself updated on the latest developments in technology and gadgets. That includes smartphones or tablet devices but stretches to even AI and self-driven automobiles, the latter being my latest fad. Besides writing, I like watching videos, reading, listening to music, or experimenting with different recipes. The motion picture is another aspect that interests me a lot, and I'll likely make a film sometime in the future.
