Spotify is expanding its audio offerings through a new partnership with Netflix for podcasts, while concurrently reporting meaningful growth in its audiobook listener base. The collaboration will bring a selection of Netflix podcasts to Spotify, broadening the platform’s content library and potentially attracting new users. This comes as Spotify continues to aggressively pursue audiobook market share,aiming to challenge Audible‘s dominance and improve subscriber retention.
The move underscores Spotify’s strategy to diversify beyond music streaming and become a thorough audio entertainment hub. Since launching audiobooks in France and Benelux a year ago, the platform has seen a 10% month-over-month increase in listening hours in those regions. germany, where audiobooks launched six months ago, has experienced over 9% month-over-month growth in audiobook listeners. These gains are crucial as Spotify seeks to increase engagement and reduce subscriber churn, a key metric for profitability.
Spotify entered the audiobook market with the goal of expanding the industry and attracting new listeners, according to CEO Daniel Ek, who stated this intention in February 2024. achieving this required a price increase; Spotify raised its monthly individual subscription fee in the U.S. to $11.99 in June 2024, with audiobook-free options available for $10.99 per month.
Ek previously explained in 2023 that offering long-form audio content like audiobooks would “increase engagement on Spotify, which will then…reduce churn.” Reducing churn is vital, as acquiring new subscribers is more costly than retaining existing ones. Analyst Jason Bazinet of Citi estimated in 2021 that Spotify’s churn rate decreased from 7.7% in 2015 to 4% in 2020, largely due to family plans that increased customer lifetime value.
