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Spotify tries to win indie authors by cutting audiobook fees

Spotify tries to win indie authors by cutting audiobook fees


Spotify’s audiobook creation service, Findaway Voices, will cut fees for sales through its own platform.

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Illustration by Nick Barclay / The Verge

Spotify-owned audiobooks seller Findaway will no longer take a 20 percent cut of royalties for titles sold on its DIY Voices platform — so long as the sales are made on Spotify. In a company blog post published on Monday, Findaway said that it would “pass on cost-saving efficiencies” from its integration with the streaming service. Last summer, Spotify finalized its $123 million purchase of Findaway in a bid to cement its position in the audiobooks business. 

While it’s free for authors to upload their audiobooks onto Findaway’s Voices platform, the company normally uses an 80/20 pricing structure — where Findaway takes a 20 percent fee on all royalties earned. But that fee comes after sales platforms take their own 50 percent cut on the list price. So under the old revenue split, an author who sold a $10 audiobook would have to give $5 to Spotify and $1 to Findaway. But moving forward, that same author will no longer have to pay the $1 distribution fee to Findaway when a sale is made through Spotify. 

The margins on audiobooks are exceptionally high, much to the chagrin of the authors. For example, Audible takes 75 percent of retail sales (though it’ll only take 60 percent with an exclusivity contract). Many authors share royalties with their narrators and have to pay production fees — meaning they get an even smaller share of royalties. 

The move by Spotify and Findaway is likely a bid to draw more indie authors from Audible, which is currently its biggest competitor. But Spotify’s audiobooks business — which it launched last fall — still has a long way to go. Unlike music or podcasts, most audiobooks on Spotify must be purchased individually, and sales are restricted to its web version. Even CEO Daniel Ek admitted that the current process of buying an audiobook through Spotify is “pretty horrible.”

Right now, Amazon-owned Audible controls the lion’s share of the audiobook market (one estimate is at 63 percent). But critics have accused the company of taking advantage of authors due to its exceptionally high revenue split.

“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,” wrote writer Brandon Sanderson in a blog post last year. Sanderson made headlines after he pulled his books from the Audible platform and has opted to sell them on Spotify and Speechify instead. 

Unlike Audible, Spotify doesn’t sign exclusivity contracts with authors — and has not announced any plans to do so. But the company isn’t done with its plans for audiobooks. In an email announcement, Audiobook’s communications chief, Laura Pezzini, wrote that Spotify expects to launch even more features for independent authors in the future. “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.”