(Photo courtesy of Scribd)

Scribd Adds Audiobooks To All-You-Read Library, Piling Pressure On Amazon

Scribd doesn't take kindly to being cribbed.

In July, the San Francisco company woke up to find that Amazon.com had imitated one of its core services, introducing an all-you-can-read book subscription service that rivaled the "Netflix for books" model pioneered by Scribd and fellow competitor Oyster. With "Kindle Unlimited," the Seattle retailer made it a selling point that it had more titles than the little guys, as well as something the others didn't have: more than 2,000 audiobooks.

On Thursday, that distinction is no more as Scribd launched its own audiobook vertical, a collection that will feature 30,000 titles at no extra charge to subscribers. For the 7-year-old company, the new service is an opportunity to tap into more than $1 billion audiobook market that lacks a dominant player, and challenge Amazon as the tech giant faces a host of problems in the digital publishing space.

"Audiobooks are just a good fit for your iPhone or your Android phone, while you're driving or if you're going to sleep," said Scribd CEO Trip Adler. "They're a very good use case [for reading] and we think it's a big, growing market."

While Amazon was the first to introduce unlimited audiobook streaming, it did so with a limited number of options and bundled it, almost as an afterthought, with the more than 700,000 e-books that came with Kindle Unlimited. For most audiobooks, the Seattle company deferred to Audible, an audio entertainment firm Amazon acquired in 2008 for about $300 million. Audible's basic service charges $14.95 a month and allows users to select one audiobook every 30 days from a selection of more than 150,000 titles.

Though his company will have a fifth of the audiobooks of Audible, Adler is hoping that readers will be attracted to the unlimited nature of Scribd's new service, which will be added to existing customers' $8.99-per-month e-book subscriptions. Kindle Unlimited currently costs $9.99 a month, while Oyster, whose website says it doesn't plan on expanding into audiobooks, costs $9.95 a month.

Adler said his company was prompted to explore the idea of an audiobook service following numerous requests from listeners. He also noted that "it wasn't very difficult" to get cooperating publishers to list their audiobook titles, especially compared to the friction he experienced when first convincing them of Scribd's of all-you-can-read e-book plans.

"Audio is a growing category and one that needs additional distribution channels," said Chantal Restivo-Alessi, chief digital officer of HarperCollins Publishers, in a statement. "By making our audiobooks available through Scribd, we’re opening up a much wider market for our authors’ works."

While HarperCollins is the only one of the so-called "Big Five" publishers (including Hachette, Macmillan, Penguin Random House and Simon and Schuster) to directly agree to terms with Scribd on unlimited streaming, the company will have select titles from all five publishing companies due to an agreement with Blackstone, a leading audiobook company. Scribd has partnered with audiobook technology company Findaway World to provide the service, which went live on Android devices on Thursday and is expected to hit Apple's App Store following approval.

For Amazon, Scribd's addition of unlimited audiobooks is another thorn in its side as it navigates various disputes in the literary world. The company has still not resolved its disagreement over e-book pricing and revenue sharing with Hachette, which has dragged on for nearly half-a-year. And while it was able to hammer out a deal over similar issues with Simon and Schuster, Amazon has been battered by disgruntled authors and customers who believe that the company is wielding a monopoly-like influence over the industry.

Despite this, Amazon continues to expand its offerings, unveiling Kindle Unlimited in July--albeit without the blessing of the Big Five publishers--and recently acquiring comedy recording and distribution company Rooftop Media for its Audible arm. Audible currently does not disclose the number of users on its service. Adler also declined to reveal the amount of people using Scribd's subscription service.

Audiobooks are part of a $1.7 billion (revenue) industry, according to a July 2014 report from IBISWorld, which found that 50% of users still listen to books on CDs. A spokesperson for Scribd was unclear on how revenues would be shared between the company, audiobook publishers and book publishing companies, only saying that the company would only have to pay rights owners if certain listening thresholds were reached during a user's experience. For example, Scribd would only have to pay its audiobook partners if, say, a listener reached the halfway point of a recording.

Scribd, which last raised money in 2011, is hoping that audiobooks can make its offering more robust in a world that's already trending toward digital subscription models in music, movies and, now, books. For Adler, it's evidence of the progression in a publishing industry that's becoming more comfortable with the online world.

"With audiobooks, I think publishers have already warmed up to the model and it fits what we're already doing," he said.

Follow Ryan on Twitter at @RMac18 or email him at rmac@forbes.com.

I'm a San Francisco-based reporter covering the agitators in technology and e-commerce. I started at Forbes as a member of the wealth team, putting together the magazine's well-known World Billionaires and Forbes 400 lists. I've worked at a number of publications including ...
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