Jonas Tellander. Image: Theresia Jatta Kölin (CC BY 3.0)

In late May, Denmark’s subscription service Mofibo was acquired by Sweden’s Storytel for a reported 100 million Danish kroner (US$14.8 million). Shortly before the announcement of the sale, we had spoken with Mofibo’s Nathan Hull about his conviction that the lack of sustainable business models seen in some US-based subscriptions should not be taken to mean that European editions of subscription services can’t continue to thrive. We have invited Morten Strunge and Hull of Mofibo to speak with Publishing Perspectives, as we have Storytel’s Jonas Tellander. We’re glad today to hear from Tellander. — Porter Anderson

By Marie Bilde | @MarieBilde

Coming: Storytel Original Launches June 14

With the purchase of Denmark’s Mofibo, the Swedish ebook and audiobook subscription service Storytel has added at least 50,000 members to its base of approximately 220,000 subscribers.

Storytel CEO Jonas Tellander tells Publishing Perspectives that for now the only concrete plan for a change in Mofibo’s territory is a shutdown of its presence in The Netherlands. Mofibo had launched there only recently, having concentrated previously in Denmark and Sweden. Both services are to continue operations in Denmark and Sweden for now, Tellander tells us, so that the newly merged company can analyze its potential and make plans.

While Tellander says there are plans to roll out Storytel services to a handful of new markets, he says he can’t yet divulge where they are.

A splash page at the Storytel site, however, may tip us off to a lot of ambition. The site asks visitors to “Choose your country” and offers 28 nations. Clicking on any one of six of those countries—Sweden, Denmark, The Netherlands, Norway, Finland, and Poland—takes you to a Storytel site in the relevant language. The rest offer a chance to submit your email address for “when we get to your country.”

Tellander points out that before launching in a new country, there’s a lot of work required to establish a local presence and learn the local market, most importantly to secure a viable amount of content for a given nation’s subscribers.

Tech and Content

Jonas Tellander

Storytel was originally an audiobook-only service. Mofibo, when it launched in 2013, offered ebooks on an all-you-can-read basis. Today, subscribers of both services can read ebooks and listen to audiobooks as they please.

While Tellander declines to say that the two starting points mean that Mofibo and Storytel have different cultures as companies, he says he finds little difference in the types of customers who subscribe to ebooks and audiobooks.

He sees, he says, the two companies’ strengths as closely related:

• Storytel, as Scandinavia’s grand old lady of audiobook subscriptions, was founded in 2005. The company has always had a strongly content-centered focus, which led it early on to produce audiobooks, itself.
• Mofibo, on the other hand, has had more of a tech-company feel, designing personalized user experience on all its platforms and emphasizing the sorts of user-analytics that publishers can capitalize on in understanding reader-consumers.

Morten Strunge

Both elements seem important to customers. The Mofibo and the Storytel apps are highly rated in app stores, usually averaging 4.5 of five stars. The challenge for Storytel may well come down to how successfully it can develop and merge the content and tech contexts in the combined corporation’s offers.

Tellander says he looks forward to welcoming the Mofibo team. At the time of our exchange, he has just had the first of a series of integration meetings. He speaks highly of the Copenhagen-based team that Mofibo CEO Morten Strunge and Chief Business Development Officer Nathan Hull lead.

Subscriptions’ Uneven Track Records

As Hull has been stressing in guest editorials and conference appearances for a couple of years now, subscription services for literature seem at this point to work better outside the United States market.

In the States, Scribd has undergone several reductions of its service, first curtailing in July 2015 the number of romance titles a user could access in a month—because in the States, romance is very avidly read by fans who often go through several titles per week—and in February of this year revising the model to limit all users to three ebooks and one audiobook per month. Unlimited access, the original offer, is limited now to a “Scribd Selects” selection of rotating titles.

Oyster’s service announced its “sunset” last September. As industry commenter and Publishing President at Our Sunday Visitor Joe Wikert wrote at the time, not only did the business model of paying a publisher for a partial read of a book prove financially unsustainable, but the effect of all-you-can-eat subscriptions seems to devalue books, in general, in many readers’ minds. Wikert wrote:

“When you’re only paying $9.95 per month to read as much as you want you start questioning the purchase price on $10 ebooks. If you’re a publisher and you already cringe when your ebooks are discounted to $9.95 or less you’ll feel even more uncomfortable participating in all-you-can-read platforms. Then again, re-read the previous point about depth and monthly pricing before you completely opt out of subscription services down the road.”

Amazon’s Kindle Unlimited subscription service has persevered by carrying self-published titles from the Kindle Direct Publishing Select (KDP) platform and by setting its own terms for payment: it makes per-pages-read payments to independent authors from a pool of money the amount of which the company adjusts on a monthly basis. It does not have the participation of the major publishers.

Nathan Hull

Amid criticism and confusion around these US-based services, Mofibo’s Hull has been particularly outspoken about detractors who tend to think that those services’ problems mean that other models can’t succeed. Writing at The Bookseller’s The FutureBook last summer, Hull said:

“While the publishing world’s US subscription players (Oyster, Scribd, and Kindle Unlimited) remain everyone’s favorite punching bags — and as Spotify vs. Apple Music vs. Tidal splinters the user experience in the music world — ebook subscription services across Europe such as Mofibo (Scandinavia), Nubico (Spain), Skoobe (Germany) have to navigate unnecessarily complicated waters, constantly justifying their own positions and dodging the looming tar brush that “subscriptions are bad news”—all because of the actions of others.”

Storytel’s Tellander says he believes that it is much more difficult to run a service that offers only ebooks than one that combines  formats.

Furthermore, he says, online streaming is so much more attractive to audiobook listeners than physical CDs and manual downloads that customers of streaming audio show high satisfaction and loyalty ratings.

He says that audiobooks seem to be popular with paperback customers, in terms of popular genres.

When Publishers Come Aboard

Another important factor to be considered in Scandinavian subscription successes is strong participation from publishers in both Sweden and Denmark, where both Mofibo and Storytel have enjoyed the partnership of some 80 percent or more of publishers.

Tellander attributes the services’ ability to attract publishers, in part, to what he says is demonstrative market growth.  Together, he says, publishers and these subscription services have managed to create revenue streams without cannibalizing existing channels, as is often the fear for publishers in the American and UK markets.

The coming together of Mofibo and Storytel, Tellander says, doesn’t mean that publishers should worry about facing a single strong player in these digital subscription services.  Storytel has had the dominant position in in Sweden for very long periods and, according to Tellander, has helped to grow market consumption from 200 or 300 titles per year to more than 1,000 titles per year in the past three to four years in Sweden. Tellander says he thinks the same can happen in Denmark and similar markets.

When Publishing Perspectives asks Tellander about his view on how his services could impact audiobook lending services from public libraries, he concedes that library availability is a double-edged sword to services like Storytel.

There’s no doubt, he says, that libraries play a big role in visibility and a book’s popularity. And in Sweden, ebook lending accounts for almost 80 percent of ebook consumption. This is not the case with audiobook lending, but that’s because publishers tend to withhold audiobooks from library lending. So, in his view, while libraries help to grow markets in terms of marketing, they also can function as competitors with free loans.

Coming: Storytel Original

Storytel for some time now has offered a combined service that lets customers read and listen to the same book, presumably like the Whispersync capability of ebooks in the Kindle system: the audio rendition of a book can pick up where the user stops reading the ebook edition.  His team, Tellander says, has overcome challenges with poorly structured media files, and the agreement with each publisher regulates how the offer is made to the consumer.

Tellander does say that the listen-plus-read option is lightly used, but gets high satisfaction ratings from users who take advantage of it. Tellander says that not many use it, but those who do are very satisfied with the combination.

Ahead: Storytel is to begin offering exclusive audio content for its subscribers, written and produced expressly for audio consumers.  Storytel Original will be published in episodes—much like a television series—and the material will be more extensively dramatized than is usually the case for traditional audiobooks using sound effects and other production elements.

Storytel Original content, says Jonas Tellander, will be translated and produced for all languages in the existing markets, and will launch on June 14.