Spotify keeps indie authors in mind as it cuts audiobook fees
Findaway, owned by Spotify, will no longer take a 20 percent cut for audiobooks sold on its DIY Voices platform – providing those sales are made through Spotify. Findaway shared that its integration with Netflix would “pass on cost-saving efficiencies” in a company blog post on Monday.
It was announced last summer that Spotify had completed its $123 million acquisition of Findaway in order to strengthen its position in the audiobook market.
In addition to uploading audiobooks for free, Findaway’s Voices platform uses an 80/20 royalty fee structure – meaning both Findaway and the author share 20 percent of all royalties.
It is worth noting that that fee comes after the sales platforms take their 50% cut of the list price. So under the old revenue split, an author selling a $10 audiobook would have to pay $5 to Spotify and $1 to Findaway. When a sale is made through Spotify, that same author will no longer be required to pay Findaway the $1 distribution fee.
A majority of audiobooks are sold through Audible, which takes 75 percent of the retail price. Authors often share royalties with their narrators and pay production fees, so their share of profits is even smaller.
While Spotify’s audiobooks business – which it launched last fall – still needs to gain traction, the move by Findaway and Spotify may draw more indie authors from Audible, which is the company’s biggest competitor.
It is difficult to purchase audiobooks through Spotify, as most are sold individually and only through the site. Even Spotify exec Daniel Ek admitted it is a “pretty terrible experience” to purchase audiobooks directly through Spotify.
In the audiobook market, Amazon-owned Audible controls the majority of the market (estimates range from 63 percent to 67 percent). But critics say the company takes advantage of authors due to its disproportionate revenue split.
Writer Brandon Sanderson in a blog post last year wrote, “Audible pays 40%. Almost half. For a frame of reference, most brick-and-mortar stores take around 50% on a retail product. Audible pays indie authors less than a bookstore does, when a bookstore has storefronts, sales staff, and warehousing to deal with.”
In recent weeks, Sanderson has pulled his books from the Audible platform and is instead offering them on Spotify and Speechify.
Spotify, unlike Audible, doesn’t sign exclusivity contracts with authors and has not announced any plans to do so. But it isn’t finished with audiobooks yet.
Laura Pezzini, Audiobook’s communications chief, stated in an email that Spotify will launch even more features in the future for independent authors.
“We at Spotify are just at the beginning of our journey supporting independent authors — we have many plans for how to help authors expand their reach, maximize revenue, and ultimately build a strong audiobooks business.”
Raphael is a person born between the generations of Millenial and Gen Z. He was produced by Cavite State University (Main Campus) with a bachelor's degree in Political Science. The lad has a fresh take on things, but can still stay true to his roots. He writes anything in Pop Culture as long as it suits his taste (if it doesn't, it's for work). He loves to wander around the cosmos and comes back with a story to publish.