The dispute between the Swedish audiobook retailer Storytel and the country’s biggest book publisher Bonnierförlagen, part of Bonnier Books, over what business model makes sense for the sector, is one we should all pay attention to. Storytel, which operates in 16 countries, is arguably the book business’ most succesful streaming service but its terms, based on a revenue share, could become as disruptive to the wider publishing sector as Netflix has been to the movie and television industries, or as Spotify has been to music.
When Storytel founder Jonas Tellander spoke at The Bookseller’s digital conference FutureBook three years ago, he imagined a scenario where, in a few years, Swedes would buy more audiobooks than print books. He is not quite there, but the numbers are staggering. Audiobooks in Sweden have long outpaced and overtaken e-books, accounting for 80%–90% of a typical trade publisher’s digital business, which in itself is around 30% of all book sales. Storytel’s financials are equally impressive; since Tellander addressed FutureBook in 2016, its sales have doubled from £60m to £120m, of which £80m comes from streaming audiobooks to its 800,000 paid subscribers. Having floated on Nasdaq First North, and despite its losses escalating, it is valued at close to £500m.
The row with Bonnier is over how it divvies up the income. Book publishers tend to look at subscription services with the same suspicion certain superheroes have for kryptonite, particularly the all-you-can-eat model that many think will dilute the much-needed revenue from heavy book buyers. BookBeat, Storytel’s Swedish rival, owned by Bonnier Books, pays a fee for each book listened to; Storytel pays out a percentage based on the overall revenue earned, the number of books accessed and listening time. Under BookBeat’s model, it takes the risk if users download more than their subscription fee covers; under Storytel’s arrangement, income per book slides to compensate—as, according to sources, it already has. The latter’s closest comparator in books is Amazon’s Kindle Unlimited, where "revenue" (as defined by Amazon) is pooled, and a percentage paid out to participants based on pages read.
Not all subscription models are created equal. Audible looks like a subscription service to its customers, but for publishers it is a discount scheme, whereby listeners pay £7.99 for purchases. Other types of subscription show how the model flexes: from Heywood Hill bookshop, which monetises its expertise, to Joffe Books (happy with Kindle Unlimited); from Galley Beggar Press, where fans are rewarded for their loyalty (and taste), to the Puffin book-box of curated reads, sent out quarterly.
There are some for whom subscription represents a holy grail, as if books must always follow other media sectors. The truth is somewhat thornier: the battle between Bonnier and Storytel shows that beneath the veneer of the new, there is an old struggle over how content is sold, who controls the risk, and how value is maintained. We are all signed up to this.