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The future of audiobooks and the impact of AI on the publishing industry was a topic of discussion for HarperCollins. Brian Murray, spoke UBS Global Media and Communications Conference on Tuesday. During the event, the executive praised Spotify’s entry into the audiobook market and detailed plans for future growth in the space. He also mentioned that AI technology could both threaten and harm publishers in the coming days.
Note that Murray said there are audio books continues to sell e-books in terms of gross revenues and helping to offset declines in e-book sales. In terms of AI, the CEO declined to discuss the specifics of the licensing deals. Signed with Microsoft He called it an “exciting time” in the industry, citing NDAs, noting that it’s early days for AI model training but AI licensing.
He also specially praised Spotify’s entry into the audiobook spaceReferring to the 15 hours of free listening included with a Spotify Premium subscription supported markets.
“Spotify entered the market in a very smart way,” Murray said. “They had a couple of 100 million music and podcast listeners … so monetizing an audiobook listener was very small, incremental change for them.” He also noted that while Amazon-owned Audible can make money from the mainstream audiobook player, Spotify’s model is taking advantage of the potential around the more casual audiobook player.
“You didn’t have to make a full commitment to buy that many books a year,” he said. “You can do it with 15 hours of free time. You can make an example. And I think the entry strategy — I mean, we know now a year from now — that entry strategy has been very successful for Spotify, and as a result, we’re getting some growth in our business overall.”
Murray said Spotify’s tie-up with HarperCollins, similar to Harper’s with Audible, involves a wholesale deal, meaning the publisher is paid on a consumption basis — a per-listen model. This type of model is more direct than the streaming music model, where a portion of subscription revenue is first pooled and then paid to artists. Publishers can tell authors exactly what their audiobook royalties will be under this model.
Murray added that there’s room for growth with Spotify, as the company is currently working to fix a “technical issue” with family plans that limited audiobook streaming to the family plan’s credit card holder. Over time, Spotify will listen to all plan members, he said.
Reached for comment, Spotify said there were no technical issues, but expanding audiobooks across family plans is something it’s currently testing in some markets.
“Echoing Brian Murray’s comments, we’re pleased with the growing interest in audiobooks and the resulting benefit to the publishing industry and authors,” a Spotify spokesperson told TechCrunch via email. “While there’s nothing to announce today, we’re actively exploring ways to improve the audiobook experience for Spotify plan members, and we look forward to sharing more in the future.”
Spotify is also expanding audiobooks to more global markets, opening it up for further growth.
Shifting gears, Murray then spoke about the potential and concerns of how AI will affect publishing.
Beyond the obvious risks associated with IP-based businesses built on copyright, publishers are concerned about generative AI, which could lead to an explosion of low-quality content competing for consumers’ time and attention. Still, Murray said he thinks high-quality content will win out in the end.
Internally, AI can also help in business areas such as marketing and sales, and HarperCollins already has dozens of initiatives across departments that are trying to realize productivity improvements from artificial intelligence, Murray said.
AI could also be useful for audiobooks, as it will allow the company to develop audiobooks for smaller markets where it previously couldn’t justify the high price. Book translations will also expand, opening up more revenue opportunities.
Further ahead, HarperCollins predicts how technology can help turn books into movies. “It’s like taking a manuscript, pouring it over, having a movie or TV script come out, and then (OpenAIs) to Sora’s storyboard,” Murray said. “Maybe in terms of speed to market or getting concepts — clear concepts — to film and television professionals … it’s easier to do now.”
