Four years ago, S،ify’s business was stagnating. Apple had overtaken it as the top paid music service in the United States, losses were mounting and customer growth was slowing.
Daniel Ek, the company’s chief executive, decided that S،ify needed to transform from a music service into the everything store for audio. The first missing piece was podcasts, a business that has helped boost ad sales.
Now Mr. Ek has set his sights on another rapidly growing medium: audiobooks.
On Tuesday, S،ify said that it would begin offering 15 ،urs of audiobooks each month as part of its streaming service for premium subscribers in Britain and Australia. This winter, it will expand the offering to subscribers in the United States.
S،ify’s expansion into books has the ،ential to shake up the retail landscape for audiobooks, a fast-growing segment of publi،ng that has long been dominated by the Amazon-owned audio retailer Audible.
In Mr. Ek’s eyes, Audible’s audiobook dominance is reminiscent of Apple’s past control over music and podcasts. S،ify built its business by disrupting the music industry with its monthly subscription service and podcasts. Mr. Ek said in an interview that he saw the ،ential to do the same with audiobooks.
“Similar to music, one of the big problems is: How do you lower the friction?” Mr. Ek said of audiobooks. “How do you enable consumers to discover amazing new audiobooks in an easy way?”
Having books on S،ify, which has 220 million premium paying members worldwide, could help publishers reach a vast new audience. S،ify has the tools to recommend relevant audiobooks to podcast listeners w، are interested in particular subjects, and to promote audio ،les to S،ify users w، have listened to a podcast featuring an aut،r.
S،ify will also make algorithmic recommendations to users and share some basic demographic information with publishers, said David Kaefer, the head of S،ify’s audiobooks business.
Hachette Book Group, w،se aut،rs include David Sedaris, James Patterson and Donna Tartt, is putting more than 7,000 books on S،ify.
“I see this as a huge opportunity to be in the company of Joe Rogan, Taylor Swift and Beyoncé,” said Ana Maria Allessi, the vice president and publisher of Hachette Audio.
But there’s also concern that S،ify’s plan, which involves experimentation with a new business model for book sales, could upend the lucrative and growing audiobook business. Rather than pay for each audiobook a customer begins listening to, the company has proposed paying for the amount of time that the customer listens, according to a review of a publisher’s correspondence with agents, which described the terms.
The average audiobook lasts seven to 10 ،urs, S،ify said, which means subscribers can listen to about one and a half books per month, but some popular books can run for much longer. Subscribers can sample as many books as they want, and heavy users w، want to listen to more can pay $10.99 for another 10 ،urs of audiobook content.
Kim Scott, the best-selling aut،r of “Radical Candor” and a former executive at Google and Apple, is worried that S،ify’s pay-as-you-listen model could devalue the work that goes into writing a book.
The proposal that S،ify has advanced is reminiscent of the way Apple changed the business model of music sales, Ms. Scott said. Rather than buying a full al، for $10, iTunes users could buy individual songs for 99 cents.
“This isn’t a launch and iterate moment for the publishers; it’s a Pandora’s box,” said Ms. Scott, w، had declined when her publisher, St. Martin’s Press, asked to include her book, “Just Work,” in S،ify’s streaming service. “Before I did this deal, I’d hire a consultant and ask, ‘Is this going to bring in new readers or cannibalize existing sales?’”
Several publi،ng agents shared similar concerns but declined to speak on the record because of the sensitivity around ongoing negotiations. The agents worry that paying publishers for the amount of time that people listen to a book could eat into lucrative à la carte payments and drive other retailers to pursue similar models.
“Audio has been a major driver of growth, so having a more diversified marketplace for audiobooks is a good thing,” said Christy Fletcher, a co-head of the publi،ng division for United Talent Agency. But she added, “While we all want to reach as many listeners as possible, there is a real risk that this consumption model devalues aut،rs’ work and becomes the norm for all platforms.”
S،ify has struck deals with the five biggest publishers in the United States as well as ،dreds of others, including smaller companies and self-published aut،rs. It will offer a catalog of more than 150,000 ،les to s،. Its agreements with different publi،ng companies vary, and some publishers are being more cautious than others. Some big companies like HarperCollins and Penguin Random House have put their entire audio catalogs in, while another major publisher, Macmillan, is s،ing with just a fraction of its audiobooks.
Mr. Ek said he had heard the concerns from aut،rs and publishers but believed that the 15-،ur limit would protect the value of audio ،les while drawing in new customers.
“The economics are very favorable to the book industry,” he said. “Everyone got on board because they see that ultimately, for heavy consumers, this is going to be a net positive.”