Sweden’s Storytel Touts Q4 Results in a ‘Truly Remarkable Year’

In News by Porter Anderson

The Stockholm-based audiobook subscription company cites a 22-percent sales increase year over year, at 3.2 billion Swedish kronor.

Listening to audio while on a February walk with the dogs in Stockholm’s Marievik district. Image – Getty iStockphoto: Alexander Farnsworth

By Porter Anderson, Editor-in-Chief | @Porter_Anderson

Stressing a Focus on Content
Even as the level of competition increases for the publicly traded Storytel in many markets, its year-ending 2022 report is resoundingly upbeat, the company’s CEO, Johannes Larcher, calling it “a truly remarkable year for Storytel.”

Nevertheless, as Katy Hershberger has pointed out at Publishers Lunch, the company has tempered shareholder enthusiasm, it seems, by suspending its usual pattern of offering guidance for future performance. When Larcher tells  investors, “We will not be guiding specifically for 2023,” it sounds to some investors like another shoe falling.

Among the fourth-quarter highlights Storytel offers in its report:

  • For the year, net sales rose 22 percent, to 3.2 billion Swedish kronor (US$303 million)
  • Quarter over quarter, streaming revenue was up 23 percent from Q4 2021, to 742 million Swedish kronor over 605 million kronor last year
  • This streaming percentage jump rises to 27 percent when the phase-out of Russian operations (begun in Q1) is excluded from the calculations
  • Group net sales increased by 17 percent from Q4 2021 to 867 million Swedish kronor over 2021’s 741 million kronor
  • A gross profit level of 322 million Swedish Kronor (over 282 million kronor), equaling a 37.2-percent margin as compared to 38.1 percent in 2021
  • EBITDA of 39 million Swedish kronor equaling a 4.4- percent margin
  • EBITDA excluding items affecting comparability of 53 million Swedish kronor equaling a 6.1-percent margin
  • Successfully completing a directed share issue and raising gross proceeds of approximately 400 million Swedish kronor

It’s interesting that Larcher talks of the company being “increasingly focused on content as one of the core pillars of our strategy.” As Publishing Perspectives know, Storytel has been proactive for many years in generating new audiobook content in markets it opened with relatively thin audio catalogues. “With a dedicated global content team in charge,” Larcher writes quite early in his statement, “we aim to bring more and widely appealing content to our audiences, and we are expanding our activities in the areas of original and exclusive content.”

He goes on, “In 2022, Storytel Books and our leading world-class audiobook and ebook publisher StorySide released more than 10,000 titles, with more than 80 percent of these being StorySide releases including 150+ Storytel Original audiobooks. Crime, fiction, romance and thrillers remain the most coveted genres among our customers, with romance, thrillers and nonfiction showing the strongest growth.

“We were also happy to see the 2022 Nobel Prize in Literature winner, Annie Ernaux, capture the hearts and minds of Storytel customers, delivering strong sales for our publishers in Sweden and Finland, where Storytel Books holds exclusive rights to her works.”

The “largest driver of our overall cost of doing business,” Larcher says, is “the overall cost of content.”

And while no one in publishing is going to faint at the news that romance leads the way, it’s gratifying to hear some references to content and categories in the context of this report. One of the more interesting high-level discussions about audiobooks in general and subscription services in particular is about generational forces. Young consumers may well be in many areas more readily wooed by subscription models and are, of course, frequently the leading core of buyers in these most populist genres.

Evolving Subscription Models in Audio

Johannes Larcher

Speaking of strategy and changes since he succeeded founder Jonas Tellander as CEO, Larcher mentions:

  • Centralized marketing across the company’s “more than 25” markets
  • “Fewer but significantly more impactful” promotional campaigns
  • Consumption-based subscription modeling

To that third point, you’ll recall Niclas Sandin at BookBeat discussing with us in December the time-based subscription structure that he’d introduced at that point into digitally-awakening France. In the United Kingdom, BookBeat offers:

  • £5.99 (US$7.39) for 20 hours per month
  • £9.99 (US$12.32) for 50 hours per month
  • £14.99 (US$18.48) for 100 hours per month

Et tu, Storytel? Yes.

In France, Storytel offers subscribers options of:

  • 15 hours per month for €9.99 (US$10.55)
  • 30 hours per month for €14.99 (US$15.86)
  • 45 hours per month for €17.99 (US$19.05)

There is a 100-hour cap on premium subscriptions, Larcher tells investors, and a “corresponding price increase for our unlimited product in Finland, Sweden, and Denmark”–those audio-avid Nordic markets being Storytel’s traditional hub of highest consumer response.

Larcher identifies a group of 10 core markets:

  • Sweden
  • Denmark
  • Finland
  • Norway
  • Iceland
  • The Netherlands
  • Turkey
  • Bulgaria
  • Poland
  • United States

The rationale for that list becomes apparent when Larcher characterizes the basis for his strong 2022 report as being “primarily driven by the acquisition of Audiobooks.com [in the United States] and solid growth across our top markets, especially the Nordic region.

“I remain focused,” he writes to investors, “on maintaining the trend for the past two quarters, with breakeven operational cash flow and sustained positive EBITDA margins.”

More from Publishing Perspectives on Storytel is here, more on digital publishing is here, and more on audiobooks is here.

About the Author

Porter Anderson

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Porter Anderson has been named International Trade Press Journalist of the Year in London Book Fair's International Excellence Awards. He is Editor-in-Chief of Publishing Perspectives. He formerly was Associate Editor for The FutureBook at London's The Bookseller. Anderson was for more than a decade a senior producer and anchor with CNN.com, CNN International, and CNN USA. As an arts critic (Fellow, National Critics Institute), he was with The Village Voice, the Dallas Times Herald, and the Tampa Tribune, now the Tampa Bay Times. He co-founded The Hot Sheet, a newsletter for authors, which now is owned and operated by Jane Friedman.