Any acquisition of Storytel is for now just speculation, but there are only two likely contenders – Audible and Spotify. And given Audible’s dominance of the US market it’s likely any plans Amazon may have had of acquiring Storytel are now shelved, as the US regulators would not stand it. Which means the door is wide open for Daniel Ek, unless new Storytel CEO Johannes Larcher has some surprises up his sleeve.
The Storytel Q3 results were so bland as to barely warrant mention here at TNPS. Meaningful Storytel growth and expansion that hijacked so many TNPS column inches this past few years had pretty much terminated with the Audiobooks.com acquisition in later 2021, since when we’ve seen an all but invisible launch in Indonesia and a last-of-the-Tellander-initiatives launch in France.
The latest report talks of a 29% YoY growth in revenues, excluding Russia (now closed) and delights in telling us that represents an 84% growth rate in the non-Nordics, but declines to mention that most of that non-Nordic revenue boost came from the acquisition of Audiobooks.com and Storytel’s entry into the US market, something Jonas Tellander should get all the credit for.
Thus far we are seeing no real sign of results from the profits over expansion strategy that came in when Tellander was ousted. The company that was once an investor magnet is now a shadow of its former self. No fault there lies with the newly installed CEO Johannes Larcher, but just where Larcher will take Storytel next is anyone’s guess.
Personally I remain optimistic Larcher can get Storytel back on track, per my post of August 28.
That headline mentioned BookBeat, which brings us neatly to the launch of BookBeat in Spain and Italy.
The official BookBeat press release tells us little other than that for both launches BookBeat has eschewed the unlimited subscription model in favour of tiered access. That is, the more you pay, the more you get, with the singular advantage for light consumers that they do not need to pay full whack if they are not heavy users.
Will this be enough to attract significant new subscribers, or even pull subscribers from rival operators? That remains to be seen, but what we likely will see is at least a slight expansion of the audiobook market as those with less cash to splash take advantage of the varied payments menus.
Curiously BookBeat declined to impress us with its Q3 YoY growth rates, suggesting perhaps there wasn’t too much to get excited about.
Nextory, on the other hand, did. And it’s 40% YoY revenue boost overshadowed Storytel’s mere 38% rise.
Nextory of course never shares its real numbers, but where we can make a comparison is in how neither Storytel nor Nextory mentions that much of this YoY growth in revenues came from acquisitions. I mentioned Storytel’s buying out Audiobooks.com, but let’s not forget how Nextory bought its way into France and Spain.
The Spain launch, with the newly-acquired and rebranded Nubico, happened in August 2021 –
so had no real bearing on the Q3 2021 results.
The same applies to the Nextory acquisition of YouScribe in France:
In both cases the growth arises largely from a purchased catalogue and subscriber list that in no way reflects organic growth, which may nor may not be happening.
So the latest spate of press releases from the Scandinavian trio leave us none the wiser about the true state of play, although Storytel alone is legally obliged to share with us some more detail next month.
BookBeat of course is owned by Bonnier and no suggestion at this time that that will change.
Nextory and Storytel on the other hand are both candidates for a Spotify buy-out, and that is something the industry should be looking at seriously.
Right now Nextory is notionally preparing for a 2023 IPO, which may or may not happen. It would be brave move of Shadi Bitar to risk losing control of the Board the way Tellander did at Storytel, and I wonder if the IPO talk – lots of talk but so far no serious action – is not paving the way for Daniel Ek to step in with a thick wad of cash.
For Storytel, acquisition speculation even found its way to Publishers Lunch this past week, where Katy Hershberger ran a post looking at the financial woes of a once Midas-touch company.
Amusingly, Porter Anderson even appended the Hershberger speculation to his rehash of the Storytel press release – itself a noteworthy event given Publishing Perspectives has largely ignored Storytel until the Audiobooks.com take-over came along.
Of course any acquisition of Storytel is for now just speculation, but there are only two likely contenders – Audible and Spotify. And given Audible’s dominance of the US market it’s likely any plans Amazon may have had of acquiring Storytel are now shelved, as the US regulators would not stand it. Which means the door is wide open for Daniel Ek, unless new Storytel CEO Johannes Larcher has some surprises up his sleeve.
As the only audiobook presence Spotify has in the US is Findaway, acquiring Storytel including Audiobooks.com would be unlikely to meet strong US opposition, and as Spotify’s audiobooks plans are still in their infancy it would likely pass Sweden’s regulators too.
Leaving the big question for 2023 onwards: has Johannes Larcher been brought into Storytel to pave the way for a sale to Spotify, or will Larcher pursue his own agenda and breathe new life into what just a short while ago was one of the most dynamic companies in the global publishing industry?
I’m hoping for the latter, but were I a betting man my money would be on the former.
And perhaps Shadi Bitar will be the king-maker. Bitar is on record with his IPO plans. Larcher has not yet had the opportunity to state his case. I’m no expert on Swedish company law but I’m guessing if Bitar was to take Spotify’s money and run that would make a Storytel buyout by Spotify more problematic.
Unless behind the scenes negotiations are already underway between Spotify and Storytel (not impossible to believe – the abrupt removal of Tellander must have had an ulterior agenda) then Bitar has the advantage.
Time will tell.
Meantime don’t be too taken in by the polished press release headlines. The audiobooks sector numbers may still be impressive, but the industry is in flux, and this week’s snapshot may bear little relation to how the stage will look this time next year.