The only surprise with the latest results from Sweden-based Storytel would have been if subscriber rates and earnings had dipped amid a global crisis that has left print-focussed publishers imperiled.
That of course did not happen, and while streaming revenue took a notional hit at SEK 429m ($44m) compared to the SEK 438m forecast, this in large part was down to “negative currency effects from the Norwegian Krone and an increase in Family subscriptions during the period.”
Overall Storytel’s Q1 results came in at 33.5% revenue growth (streaming and non-streaming) to SEK 513.2 million ($52.7) and a subscriber boost of 71,400, taking Storytel’s total subscribers to 1.54 million.
The average number of paying subscribers in the Nordic segment was 785,800, while 43,200 subscribers were added outside the Nordics, taking total non-Nordic subscription levels to 369,000.
Tellander issued a Q2 forecast of 1.25 million global subscribers, amounting to 41% YOY growth, and a 43% YOY revenue growth to SEK 458m ($47m), with the caveat that the coronavirus crisis meant there was an element of uncertainty about how things might pan out.
Addressing shareholders, Tellander, echoing a common theme that audiobook downloads had dipped as commuters stayed at home, said that afternoon and evening consumption “more than compensated” for the downturn in commuter consumption.
About the Covid-19 pandemic Tellander said,
It is impossible to describe the first quarter of 2020 without addressing the coronavirus situation around the world. Storytel’s vision is to make the world a more empathetic and creative place with great stories to be shared and enjoyed anywhere, anytime, and by anyone. And this vision has arguably never been as relevant for society as it is in these times of the coronavirus pandemic. During the quarantine we all sacrifice established and comfortable habits, and for a limited period we embrace restricted liberty of action to protect at-risk groups and for unburdening heroic health care staff and hospitals. The quarantine imposed on many markets throughout the world has also fueled peoples’ already high interest in audiobooks and the service we offer.
Tellander talked of consumers becoming more “digitally savvy” and noted that,
New consumption patterns have started to emerge as a result of lockdown on many markets. Morning listening while commuting has gone down in some markets for obvious reasons, but this is more than compensated for by a higher rate of listenings in the afternoons and evenings. In the Nordics, we also see a clear growth in consumption on Sundays and at the beginning of the week.
Crime & Thriller and Fiction have kept their positions as the most consumed genres in our service, but the influx of new users, combined with families spending more time with each other at home, has boosted the Children category to third place. At bedtime this category actually surpasses Fiction and is the second-most popular genre among our customers. Biographies and Personal Development are two other genres that have grown pronouncedly during the coronavirus pandemic.
Addressing the bigger picture of print struggling globally in the pandemic era, Tellander told shareholders,
It is obvious that the popularity of audiobooks and the digital transformation of the book market are increasing in both speed and impact due to the coronavirus pandemic. Publishing houses are currently experiencing rapidly decreasing physical sales and might find it difficult to stay profitable. This makes them more dependent on digital sales and audiobooks. The publishers that are likely to come out on top in this situation are those that manage to pivot or have invested in audiobooks at an early stage and already earn a large portion of their sales on audio.
That statement is worth picking up on for its focus on audiobooks, which of course is the mainstay of the Storytel operation, but the lesson here is that all digital formats are soaring as consumers discover the digital advantage.
Here at TNPS I’ve been wondering how the pandemic might affect Storytel’s global ambitions –
but Tellander had words of assurance on that point.
Thanks to our innovative mindset and experience in using technological solutions for remote working, Storytel’s global audiobook production has been up and running on all markets during the quarter, and we have experienced a relatively small impact on our production during this period.