In early January, Apple captured headlines for rolling out AI-supported audiobook narration, but this wasn’t the first harbinger of AI-led disruption for the audiobook industry. For years, the threat of a burgeoning library of AI-narrated titles has left voice talent fearing for their job security and incumbents surfacing doubts over the long-term viability of smaller publishers. Today, we explore what Apple’s initiative and general advances in artificial intelligence could mean for the larger audiobook landscape, and what this launch may signal about Apple’s endgame.

What is it?

Through Apple Books digital narration, Apple helps authors convert their ebooks into audiobooks narrated by one of four AI-generated voices.

• The Value Prop: A more affordable and convenient alternative to audiobook production → Producing entry level audiobooks are typically costly and complex endeavors for authors, with basic audiobook production costs noted to start around $2,400 (before actor’s charges are even included), but can scale up into the 6-figures for more premium fare. Apple is fronting the cost (for now) of AI narration services—but Apple has yet to confirm whether authors can take these versions elsewhere.

• The Competition: Google already had the same idea two years ago → Despite the recent media attention, Apple isn’t the first to tap AI to chase into a long tail of ebooks that have yet to be converted to audiobooks. In 2021, Google leveraged its text-to-speech (TTS) technology to beta launch an auto-narration tool for Google Play Books authors. A Google PM claimed that “95% of eBooks do not have an accompanying audiobook, which in our book catalog is millions and millions of books.”

• The Limitations: Not intended (nor ready) to replace human-narrated audiobooks → Despite continued improvements in TTS technology, synthetically narrated audiobooks still fall short of delivering the level of nuance and quality audiobook listeners expect, struggling to pronounce names correctly and failing to capture the emotion of characters and subjects. Whether influenced by AI’s current shortcomings or not, Apple insists that its digitally narrated titles are but a “complement to professionally narrated audiobooks” and that it “remains committed to celebrating and showcasing the magic of human narration.”

Near-Term Implications

We believe the seismic effects of AI’s increasing role within the audiobook industry will be gradual, then sudden. A future where narrator-motivated listeners can effectively apply their favorite voices (whether an acclaimed narrator, favorite celebrity, or a loved one) to any long-form text ever published is still far away. In the meantime, here’s what we predict will happen:

• Audible won’t budge from its anti AI-narration policy → We see Audible doubling down on its stance as a point of differentiation, positioning themselves as strong allies within the creative / SAG community and as a premium, high-quality destination for listeners while allowing others to chase this race to the bottom.

• More consumer choices and merchandising opportunities → Marketplaces (including Apple & Google) will begin to offer both human and digitally narrated options of the same title at different price points, similar to the differentiation consumers already find between 4K, HD and SD videos.

• The biggest losers will undoubtedly be non-top tier voice actors and their support stack → Aside from an exclusive tier of distinct and beloved voices, demand for run-of-the-mill human narrators will be decimated. Much like content, this will be winners-take-all.

• Don’t count out small-scale publishers → They’ll continue to justify their market fit by meeting independent authors where AI cannot—focusing on quality over scale and generating market demand through white-glove fuller service capabilities.

Apple’s Endgame

While Apple’s future plans within audiobooks remain unclear outside of a small investment to lean further into its role as a producer than reseller, there is some strategic rationale for Apple’s foray into digitally narrated audiobooks. It has less to do with an explicit opportunity within audiobooks and more to do with Apple’s obsessive focus on its end user:

• It’s not entirely about the money… →  In 2021, publishers’ audiobook revenue reached $1.6 billion, marking its tenth straight year of double-digit growth. Capturing the entirety of these revenues would have yielded Apple an incremental revenue gain of less than 0.01% in 2021. Let’s not forget, Apple already takes a 30% cut of competitors’ in-app audiobook revenues and maintains control (for now) over how its competitors direct iOS users outside of their apps to make digital purchases.

• …if there’s much to be made at all… →  There’s certainly a long tail of ebooks that have yet to be converted to audiobooks, but whether there’s meaningful revenue to be made on these titles is up for debate. Spotify’s executives are bullish, believing audiobooks today represent less than a 7 percent share of the wider book market. Audiobook narrator Steven Jay Cohen offers a different view:  “The reason that many of these titles are not made into audio is not the cost—it is that they were written in such a way as to make them unintelligible when read from beginning to end without the charts, graphs, etc. embedded within their pages. If all that was ever needed was a voice to read out loud, then narration would have died years ago.”

• …but it does align with Apple’s leadership position in accessibility →  In the absence of significant revenue opportunities, there is an accessibility and utility play here for Apple and an incentive to close the gap in audio-supported content within its library.

• There’s upside for its growing services business and bundles → Ever since its launch, we’ve believed Apple One to be a crucial component of Apple’s evolving ecosystem. And as Apple is set to eclipse the 1 billion paid subscriber mark this year, we expect to see this technology woven in as a continued premium offering for subscribers. Similar to how Apple News+ subscribers can listen to audio versions of select stories through Apple News Audio, we can see an AI-enabled audio offering for books within a more robust version of Apple One’s Premier plan.

• This is just part of the proliferation of AI across Apple’s ecosystem → Take it from none other than Apple CEO Tim Cook: “We see enormous potential in this space [for AI] to affect virtually everything we do…it will affect every product and every service that we have.”