The margins on audiobooks are exceptionally high, much to the chagrin of the authors. For example, Audible takes 75 percent of retail sales (though it’ll only take 60 percent with an exclusivity contract). Many authors share royalties with their narrators and have to pay production fees — meaning they get an even smaller share of royalties. The move by Spotify and Findaway is likely a bid to draw more indie authors from Audible, which is currently its biggest competitor. But Spotify’s audiobooks business — which it launched last fall — still has a long way to go. Unlike music or podcasts, most audiobooks on Spotify must be purchased individually, and sales are restricted to its web version. Even CEO Daniel Ek admitted that the current process of buying an audiobook through Spotify is “pretty horrible.” “We at Spotify are just at the beginning of our journey supporting independent authors — we have many plans for how to help authors expand their reach, maximize revenue, and ultimately build a strong audiobooks business,” said Audiobook’s communications chief, Laura Pezzini.
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