Bonnier and Storytel enter war of words over audiobook fees

Bonnierförlagen, Sweden’s largest publisher and part of Bonnier Books, has ceased supplying new audiobooks to the country’s largest streaming platform, Storytel, in a row that could shape how subscription services compensate publishers and authors.

The dispute is over how Storytel reimburses Bonnierförlagen for the consumption of its audiobooks. Bonnier is one of only a few publishers paid on a per title basis—thought to be around SEK50 (£4) for each listen. However, for most publishers Storytel uses as standard a revenue share model, whereby publishers are paid based on a percentage of earnings. The latter is more economical for Storytel, but can lessen the amount earned. Under the Storytel model, according to one source, the earnings are around SEK17 (£1.40) per listen, having declined from SEK38 (£3) in recent years.

Storytel’s chief financial officer Sofie Zettergren said: "Bonnier’s deal dates back to the early days of Storytel, and we have been negotiating on a regular basis with the ambition to find an optimal solution for us, for Bonnier, and for our consumers... We have had revenue share as our standard model in all countries since the very beginning, and we see no reason why Bonnier shouldn’t have it too."

The situation has angered other Swedish lists, who feel Bonnier’s different deal gives it a commercial advantage. It has also led to a tit-for-tat battle between Bonnier and Storytel, with Storytel reducing the visibility of Bonnier’s titles on its platform, and Bonnierförlagen withholding new audiobooks for six months, including popular writer Camilla Läckberg’s latest. Storytel also accused BookBeat, a streaming service operated by Bonnier, of having "secretly hidden" titles from Sweden’s second-biggest publisher, Storytel-owned Norstedts. Niclas Sandin, c.e.o. of BookBeat, denies this.

The audiobook market in Sweden is huge, having overtaken e-books in the past four years. For a typical trade publisher, audio download sales can account for as much as 80% of their digital content business. Storytel’s share of the streaming market is 78%, but its model remains controversial, with concerns over how it dilutes author earnings. Storytel’s share has seen it likened to Amazon, with Bonnier’s share on the Storytel platform halving as a result of the row. Storytel has said it has improved its profitability as users are listening other titles.

Costing per unit
BookBeat’s Sandin said: "We pay a net price per book, often based on [its] length and the time since its release. This ensures the publisher and author always know how much they get from their book, and the only thing affecting the total revenue is how popular it is. It forces the streaming services to keep prices up, charge for simultaneous use of the same account and not give away long free trials. We have proven that this model works for streaming services and publishers in both Sweden and Finland."

He denied that BookBeat has reduced the visibility of Norstedts’ titles, accusing Storytel of "trying to create a straw man by pushing the talking point that we are acting the same to justify its actions". But he did confirm that Norstedts titles were not currently included in BookBeat’s external marketing campaigns after Norstedts refused to "even discuss potential discounts in exchange".

Storytel has been a huge success since its launch in 2005, and has raised money to produce its own titles and buy established book businesses. In 2018 it produced more than 5,000 audiobooks in 17 languages. Its most recent full-year results show sales from streaming grew 41% to SEK1.03bn (£84.9m), from 800,000 paid subscribers. But it has also reported escalating losses for the past two years.