Audiobooks’ Latin explosion — a new front in the streaming wars?
As streaming and demographic shifts bring a second Latin explosion to the music industry, audiobooks are gearing up to follow suit. In a January 2024 press release, popular subscription-based audio platform Podimo announced a new strategic alliance with Mexico media hub Troop. Since launching in Mexico in 2023, Podimo has already racked up thousands of subscribers, but by leveraging Troop’s knowledge of the Spanish-language audio ecosystem, they are hoping to consolidate their presence in Latin American and US diaspora markets. And for good reason.
According to a recent report by Spanish digital publishing consultancy Dosdoce, demand for Spanish-language audiobooks is skyrocketing, thanks to booming supply. There are more than 25,000 audiobooks in Spanish today, which is 25x more than just five years ago. According to the report, the most impressive growth in Spanish-language audio companies is happening in Latin America, and many of those companies produce content that reaches the diaspora in the US. So, whichever global platform captures major Latin American cities — the streaming epicentres of the world — has a serious advantage for conquering audiobook streaming writ large.
Latin consumers drive streaming
In 2018, Spotify declared Mexico City the “streaming capital of the world”, and the city is still hugely impactful on global streaming trends today. Cities like Santiago, Chile, and São Paulo, Brazil, also consistently land in Spotify’s top cities for streaming consumption. There are three primary, interrelated reasons for high streaming engagement in Latin America: population density, rapid mobile adoption, and social music sharing. In Colombia, for instance, 72% of consumers listen to audio via YouTube (for music videos) and 65% listen via Spotify, compared to 49% and 35% in the US, respectively (MIDiA Q3 2023 consumer survey). Colombian respondents also add music to playlists (53%) and share music with others (29%) more than any other market we surveyed in Q3 2023.
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All that to say, the rise of Latin superstars, like Bad Bunny and Karol G, was all but inevitable. With streaming being both global and algorithmic, Latin consumption trends are bound to influence global ones. Plus, according to Pew Research Center, “Hispanics made up more than half of total US population growth from 2010 to 2022”. With Latin America having the world’s streaming hotspots and a growing audience base in the top market for recorded music revenue, Latin consumers have an outsized effect on the world’s streaming trends. As audiobook presence grows on global DSPs, that effect will matter more and more for audiobooks as well.
Global streaming will drive audiobook competition south
While audiobook apps have existed for many years, they have always felt more iTunes than Apple Music, more digital commodity than consumer commodity. That is to say, the business model has largely relied on per-unit value as opposed to user value. Audible, for instance, may charge a monthly fee, but that fee is directly related to the amount of audiobooks a person listens to in a month. With any music streaming platform, subscriptions are unrelated to volume — users have a virtually infinite supply. In return, users implicitly agree to become the commodity (remember, ARPU used to mean average revenue per unit, not average revenue per user).
Though Spotify’s recent rollout of audiobooks does come with some supply limitations, the revenue model still decouples unit-value by allowing users to listen to as many books as they want (provided total listening time is under 15 hours). This brings audiobooks to the entrance of their global streaming era. Coupled with the growth of the Spanish-language audiobook market and the intense streaming engagement of Latin consumers, Spotify is poised to make the quickest (and biggest) gains in the audiobook streaming era before any other major player in Big Tech.