🔥Audible’s New “Plus” Tier Signals Forthcoming Consolidation in Audio
By Nick Strann | @nstrann
On August 24th, audiobook marketplace Audible unveiled Audible Plus – a new, all-you-listen subscription service priced at $7.95 a month. For now, the service is limited to audiobook titles from Audible’s publishing arm, a selection of titles from Blackstone Audio, and the handful of podcasts Audible has produced. Other deals are in active negotiations and this library will grow meaningfully by end of year.
Audiobooks represent a quietly large and explosive market ($2.4B US market, 20% YoY growth in 2019). While podcasting has gotten the lion’s share of investor and media attention – the audiobook category’s continued, double-digit revenue growth over the past eight years has been driven by consumers with an established willingness to pay (audiobook listener generates 2.4x more avg revenue than a podcast listener). With Audible Plus, Audible is trying to walk a tight rope – shifting the form of its subscription offerings as a defensive measure against Spotify’s (Apple’s and others) forthcoming foray into the category while maintaining this WTP for top titles (notice that the Big Five publishing houses are conspicuously absent from the service).
It’s a smart strategic move but one that we believe to be a temporary solution. Rolling out Audible Plus as Amazon Music also expands to include podcasting means two competing audio products from Amazon will exist in market – and long-term preference will likely be given to Amazon Music as part of the Prime bundle. Audible has benefitted from a certain amount of separation from its parent company but this will begin to change as the lines between podcasting, music, and audiobook platforms continue to blur. Within a 3-5 year horizon, one of these products will be absorbed into the other and our guess is that Audible may be the one to go.
🔥Apple, CBS, and Showtime: The “New” Cable Bundle
By Nick Strann | @nstrann
Before its subscription model and price tag were announced, early reports surrounding Apple TV+ suggested that Apple intended to distribute its film/tv content for free. The logic went – rather than competing directly against Netflix or HBO, Apple would instead use its premium content as a flashy incentive to bring people into a unified ecosystem akin to the cable bundle – one that was focused on selling those other SVODs but with Apple’s 30% fee. The costs of content assumedly became too hard for the tech conglomerate to swallow, however, and consumers were eventually met with another content service competing for their attention and wallet.
The announcement of an Apple TV+ / CBS All Access / Showtime bundle in late August, should thus be seen as a step back towards that initially rumored strategy. Similar discounts have been provided by other OTT marketplaces but a bundle with this level of players is a first and, crucially, signing up for the bundle will not require downloading separate apps. This is the first step towards phase 2 of the Streaming Wars. When the current pandemic induced inflation of subscriber numbers reverses, watch for the SVOD bundle to become the next strategy de jour– with only Netflix and the already established Disney+ / Hulu / ESPN+ bundle able to stay independent.