Spotify gave an early peek at its two-week-old Audiobook rollout with chief executive Daniel Ek telling investors, “It’s early days, but we feel good.”
“We just believe it is going to be a great product that will open up more authors to more consumers. And what we have seen is that when we enter a business, it gets bigger,” he said on a call after strong third quarter financials that included a swing to profitability as users weathered price hikes pretty well and despite investment in the audiobook launch. CFO Paul Vogel called the quarter an “inflection point” for the company which now expects to be consistently profitable. The stock is up 10% today.
Audiobooks on Spotify, announced early this month, has launched in a few markets including the UK and will roll out to the U.S. this winter. Premium subscribers get 15 hours free a month and can top that off with discrete credit card payments if they want more. “We are seeing them [users] doing that,” some “heavily,” Ek said. “The base is obviously very small [but] we are encouraged by what we are seeing” by the company’s next big push after podcasts.
The CEO and founder was also upbeat on advertising as Generative AI will make it cheaper and easier for marketers to move into the audio ad market. Today creating a great audio ad is quite costly, said Ek. Marketers “obviously already make the investment for video because there are a lot of platforms that are available. But we are one of the few that offers audio ads in a big way at scale.”
AI lowers costs. And it can help advertisers scale their creative “in unimaginable ways,” he said. “You can translate whatever creative you have into lots of different languages. You can use the same voice actor, instead of producing one or two ads, you can have a thousand or ten thousand or even a hundred thousand ads that are individually created for each user…So there’s lots of possibilities that lowers the barrier to entry for marketers on the ad side using generative AI.”
It’s early days here as well but “we are experimenting” with what Ek expects to be “a big catalyst” for its ads biz going forward.
Spotify has introduced AI DJ, an personalization technology that offers users music recommendations based on listening history as wel and facts about thhe music, artists and genres.
