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The future of audiobooks and the impact of artificial intelligence on the publishing industry were discussion points for HarperCollins, whose CEO, Brian Murray spoke at UBS Global Media and Communications Conference on Tuesday. During the event, the CEO praised Spotify’s entry into the audiobook market and provided details on future growth plans in the space. He also touched on how AI technology could threaten and harm publishers in the coming days.
It is worth noting that Murray said that audiobooks Continue to outperform e-books In terms of total revenues and helps offset declines caused by delayed e-book sales. Regarding artificial intelligence, the CEO declined to discuss the details of licensing deals, such as those that have taken place Signed with Microsoft For training on AI models, he cited non-disclosure agreements, but he stressed that it was early days to license AI, calling it an “exciting time” in the industry.
He also specifically praised Spotify’s entry into the audiobook space, pointing to the 15 hours of free listening included with a Spotify Premium subscription in supported markets.
“Spotify entered the market in a very smart way,” Murray explained. “They had several 100 million music and podcast listeners…so it was a very small shift for them to monetize the audiobook listener.” He also noted that while Amazon-owned Audible has been able to monetize the core audiobook listener, Spotify’s model taps into the potential around the more casual audiobook listener.
“You didn’t have to sign up with the full commitment of a large number of books a year,” he said. “You can… do it with 15 free hours. Can you sample it? And I think that entry strategy – I mean we know now a year later – that entry strategy was very successful for Spotify, and as a result, we had a little bit of growth.” Increasing growth in our overall business.
Murray said Spotify’s relationship with HarperCollins, a deal similar to Harper’s with Audible, includes a wholesale distribution deal, meaning the publisher gets paid based on consumption — a kind of per-listen model. This type of model is more straightforward than the streaming music model where a percentage of subscription revenue first goes to the group and is then paid to the artists. The publisher can tell authors exactly how much revenue they will receive from audiobooks under this model.
Additionally, Murray said there is room for growth with Spotify, as the company works to adjust a “technical issue” with family plans, which currently limits streaming of audiobooks to a family plan’s credit card holder. Over time, Spotify will open up listening to all plan members, he said.
When reached for comment, Spotify said there was no technical issue, but expanding audiobooks across family plans is something it’s testing in some markets right now.
“Echoing Brian Murray’s comments, we’ve been pleased by the increased interest in audiobooks and the resulting benefit to the publishing industry and authors,” a Spotify spokesperson told TechCrunch via email. “While we have nothing to announce today, we are actively exploring ways to improve the audiobook experience for Spotify plan members and look forward to sharing more in the future.”
Spotify is also expanding audiobooks to more global markets, opening the way for further growth.
Next, Murray spoke about the potential and concerns of how AI will impact publishing.
Besides the obvious risks associated with a copyright-based business, the publisher is concerned about generative AI, which could lead to an explosion of low-quality content, competing for consumers’ time and attention. However, Murray said he believes quality content will win out in the end.
Internally, AI can also help in business areas like marketing and selling, and there are already dozens of initiatives across departments at HarperCollins where they are trying to achieve productivity improvements through AI, Murray said.
AI could be good for audiobooks as well, because it would allow the company to create audiobooks for smaller markets where it couldn’t justify the high cost before. Book translations will also expand, opening up more revenue opportunities.
In the future, HarperCollins predicts how technology can help turn books into films. “You can imagine taking a manuscript, pouring it in, coming up with a movie script or a TV script, and then using Sora (from OpenAI) to storyboard it,” Murray said. “In terms of… maybe speed to market or getting concepts – clear concepts – to film and TV professionals… that’s easier to do now.”
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