How Spotify Should Tackle Amazon's Audiobook Empire

But first, some necessary backstory.

In 2017, I was looking for new ways of squeezing more cardio instead of getting a weekly 8-0 walloping with my Sunday league soccer team. So, I started looking into outdoor running. But there was a problem - I suffered from the 'chronic easily bored syndrome.'

I wanted something to keep my mind busy while I got busy.

I Googled a remedy for my illness and found that a music app had a running feature that allowed you to set your running pace and your playlist. The app would match the music to your running tempo to keep you motivated to move through your run. Slow down, and the music volume would decrease; keep the pace, and it would hum with every step you took.

'Spotify' was the app, 'Running' was the feature. It was brilliant.

And to keep my newfound healthy habit on pace, I listened to my favorite playlists or podcasts ONLY when I went on a run. That was my strict rule. No exercise means I would have to get to the park to find out the rest of Cliff Wilson's story of how he built the Lululemon empire on the 'How I Built This' podcast or try to learn the deceptively interesting world of investing with the guys from the 'Equity Mates' podcast.

And it worked; I ran multiple times a week, and my temptation was only satisfied with a run.

But like many brilliant things that I fall in love with in tech, it was gone. Spotify canned it in 2018. And I showed mercy to all marathon records but continued to run, just not as often. The temptation was gone.

Fast forward to the present day.

As of June 2023, Spotify has 220 million subscribers and 331 million freemium monthly users. With the hope to convert their freemium users into Spotify fanatics for about $13 a month (in Australia).

In comparison, for $10 a month (in Australia), Amazon will give you podcast streaming, plus music streaming, plus TV and Movie streaming, plus ebooks, plus exclusive deals... We could go on for quite a bit here. The point is not to compare the two stacks of services because it's a losing battle for Spotify in that fight.

But it's not all doom and gloom for Spotify. They have the highest share of podcast listeners with 33% of the market. They are one haymaker away from marrying the experience of listening to a podcast with their platform. Now, here's the fight-winning recipe.

To catch up with Amazon and provide added value to its premium subscribers, Spotify recently rolled out an Audiobook feature. Premium users now have access to over 150,000 audiobooks from top publishers, with a monthly limit of 15 hours.

And it's fantastic. I recently listened to James Clear's 'Atomic Habits' on my run, and Chapter 8 really caught my attention.

Ronan Byrne, an electrical engineering student, improved his exercise habits by hacking his stationary bike to connect it to his laptop and TV. He created a program that allowed Netflix to run only when he cycled at a specific speed, pausing the show if he slowed down. This creative solution helped him stay active while enjoying Netflix.

James Clear calls this 'Temptation bundling.' And that is exactly how Spotify should market the Audiobook premium feature.

Here's the masterstroke: Give every one of those 331 million freemium users free access to James Clear's 'Atomic Habits' when they are doing their desired habit. For example, Nike running app connects to Spotify's app. If Spotify could monitor that connection and reward freemium users with free access to Atomic Habits, they will be encouraging the temptation bundling of their chosen activity with listening to a podcast.

Literally make the world a healthier place, one audiobook at a time.

And Spotify can do this with many activities as well, like cooking, various exercising, public commuting, location-based rewards, etc. Then, it's time to upsell. Offer more audiobooks and the premium subscription based on users' listening habits. It's a one-two fighting strategy that would make Rocky proud.

So, there you have it, the David Yousif take on how Spotify can conquer the audiobook realm and create a healthier, more productive world one audiobook at a time.