To diversify its offerings, Spotify Technology S.A. SPOT plans to introduce a monthly pilot program that offers up to 20 hours of free audiobooks to its paying subscribers.
The company is collaborating with major U.S. publishers on this initiative, which aims to compete with incumbent audiobook platform Audible and assess customer interest in audiobooks, the Wall Street Journal reports. Spotify, looking to bolster its profitability, is eyeing the growing audiobook market alongside its core music streaming business.
This move follows Spotify's recent premium individual plan price hike to $10.99 monthly in several major markets.
Spotify ventured into the audiobook space a year ago, offering a catalog of over 300,000 titles from various authors and publishers.
However, the initial approach was based on a pay-per-download model. To compete with Apple Inc AAPL, Spotify directed users to purchase through a web browser to avoid Apple's 30% commission.
The new test program seeks to enhance user experience by allowing subscribers to access free audiobooks directly in the Spotify app.
The pilot program will likely roll out gradually in English-speaking countries, including the U.S., Canada, Australia, and the U.K. While the exact audiobook titles are still being determined, Spotify aims to provide a broad selection to its subscribers.
Spotify's previous acquisitions, such as Findaway and agreements with services like Storytel, have paved the way for its expansion into the audiobook market.
Spotify is exploring multiple initiatives to boost revenue. It includes adding full-length music videos to its app to compete with Alphabet Inc GOOG GOOGL YouTube, and ByteDance Ltd's TikTok, including a move to put lyrics behind its paywall.
Price Action: SPOT shares traded lower by 0.30% at $159.62 premarket on the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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