The future of audiobooks and the impact of AI on the publishing industry was a talking point for HarperCollins, whose CEO Brian Murray spoke at the UBS Global Media and Communications Conference on Tuesday. During the event, the executive praised Spotify's entry into the audiobook market and detailed its future growth plans in this space. He also touched on how AI technology could threaten and harm publishers in the future.
Notably, Murray said audiobooks continue to outpace e-books in terms of total revenue, making up for the decline due to slower e-book sales. Regarding AI, the CEO declined to discuss details of licensing agreements, including one with Microsoft for training AI models, citing NDAs, but said it is an “exciting time” in the industry. He emphasized that it is still early days regarding licensing. .
He also particularly praised Spotify's entry into the audiobook space, noting the 15 hours of free listening included with a Spotify Premium subscription in supported markets.
“Spotify entered the market in a very smart way,” Murray explained. “They had hundreds of millions of music and podcast listeners…so monetizing audiobook listeners was a very small adjacent change for them.” He also noted that while Bull was able to monetize its core audiobook listeners, Spotify's model taps into the potential of people who listen to audiobooks more occasionally.
“I never had to commit to reading so many books a year,” he said. “If you have 15 hours of free time, you can do that. You can sample it. And that entry strategy, which we now know a year later, is very important for Spotify. It's been very successful and as a result our business as a whole is growing.”
Similar to Harper's deal with Audible, Spotify's relationship with HarperCollins includes a wholesale distribution agreement, meaning the publisher receives compensation based on consumption, a type of listening privilege. Murray said it is a model for each company. This kind of model is more direct than the streaming music model, where a portion of the subscription revenue is first pooled and then paid to the artist. Publishers can tell authors exactly how much their royalties from audiobooks will be under this model.
Murray also said Spotify has room to grow as it works to adjust “technical issues” with Family Plans and currently limits audiobook streaming to Family Plan credit card holders. said. Over time, Spotify will be able to listen to music from all plan members, he said.
When reached for comment, Spotify said there are no technical issues, but that expanding audiobooks across family plans is currently being tested in some markets.
“Following comments from Brian Murray, we are pleased with the growing interest in audiobooks and the resulting benefits for the publishing industry and authors,” a Spotify spokesperson said in an email. told TechCrunch. “While we don't have anything to announce today, we're actively exploring ways to enhance the audiobook experience for Spotify plan members and look forward to sharing more in the future.”
Spotify is also expanding audiobooks into more global markets, which opens up further growth potential.
Shifting gears, Murray spoke about the possibilities and concerns about how artificial intelligence will impact publishing.
Besides the obvious risks associated with copyright-based, IP-based businesses, publishers are concerned about generative AI that could lead to an explosion of low-quality content competing for consumers' time and attention. I'm doing it. Still, Murray said he believes quality content will ultimately win.
Internally, AI can also help in business areas such as marketing and sales, and HarperCollins already has dozens of initiatives in place to use AI to improve productivity across departments, Murray said. he said.
AI could also be useful for audiobooks. This will allow the company to create audiobooks for a smaller market that previously could not justify the high price tag. Book translations will also expand, creating more revenue opportunities.
Further down the line, HarperCollins predicts how this technology could help turn books into movies. “Imagine taking a manuscript, pouring it over, having them write a movie script or a TV script, and then using that. [OpenAI’s] From the solar panel to the storyboard,” Murray said. “Maybe…in terms of speed to market and getting a concept, a clear concept, to film and TV professionals…it's easier now.”