There are three big digital book players in Sweden – Storytel, Bonnier’s Bookbeat, and Nextory. And this week comes news that Nextory has raised SEK 51 million ($6.2 million) as part of plans to become the biggest ebook operator in Sweden, and beyond.
The fresh money (on top of SEK 50 million previously raised) comes from existing investors and a new partner, LK Finans, says Sweden’s Investing.com.
Sweden saw 115% growth in ebooks in 2017, while Nextory tripled its customer base and registered 275% growth.
I’m inclined to speculate that was because rivals Storytel and Bookbeat were more focused on audiobooks, and as there is little sign Storytel, the strongest player, is too bothered about ebooks, this looks like a recipe for success, just so long as Amazon doesn’t descend on Sweden.
Yet it appears that is just what is about to happen, with indications Amazon is planning a launch not just in Sweden but also simultaneously in Finland and Denmark.
But let’s first return to Nextory.
According to Svensk Bokhandel, Nextory CEO Shadi Bitar claims to have a larger proportion of ebooks than either Storytel or Bookbeat, but Nextory is not yet in profit.
In 2016, Nextory sold digital books to the value of just over SEK 8 million ($975,000) and made a loss of 17 million ($2 million). 2017 numbers are not official yet, reports Svensk Bokhandel, but the 275% increase equates to SEK 30 million ($3.6 million).
Sweden’s tech journal Breakit offered some further background on Nextory’s plans.
Syria-born Bitar moved to Sweden aged 11, from a town with no bookstore, and as a student set up a company called Earbok, selling audiobooks for students, before launching Nextory in 2015.
Now Bitar plans Nextory expansion not just in Sweden but internationally, with the Nordic neighbours first in line.
Asked about the competition, Bitar told Breakit,
I see Storytel and Bookbeat more like industry colleagues and that we change a reading behavior together. Our niche is that we invest more in e-books and reading experience there. This is for example about interactive books with moving images. We will also develop our subscription services and we already have a family subscription with four people being logged in at the same time.
But while Bitar might consider Storytel and Bookbeat industry colleagues, Amazon is a different animal altogether.
Fortunately for Bitar, there’s little evidence Amazon is looking to launch a Kindle store or any books-orientated service in Sweden any time soon, and that is the bigger story here.
Amazon’s interest in Europe so far has been limited to France, Germany, Italy, the Netherlands, Spain and the UK, but speculation is rife in northern Europe that Amazon is preparing to launch in Sweden, Denmark and Finland before the summer.
Said Pär Svärdson, founder of Adlibris and Apotea,
I have heard many rumors about a secret project in Stockholm and to launch something in the spring. I guess this is a Swedish-language site.
Online store Bubbleroom’s CEO, Ville Kangasmuukko, has heard that Amazon is coming to Sweden during the second quarter of this year, and Patrik Hedelin, partner of venture capital company Eequity, is convinced that a launch will take place this year.
While Hans Otterling, partner of the venture capital company Northzone, said,
They will enter Sweden, Denmark and Finland at the same time and offer free home delivery and delivery the next day. Given Amazon’s resources, I think they will have a stock in the Nordic region right from the start.
Amazon is already in Sweden with AWS, and has for several years owned the domain Amazon.se, but all the signs are Amazon will observe the same trajectory it has in Singapore and Vietnam –
, and that is it working to in South America –
where books and ebooks are evidently not worth the aggravation.
Amazon already has a substantial presence in Germany and from there it would be a simple matter to source electronic goods and other stock to make available to the Nordic countries.
An electronic gadget can be sold just as easily in Germany, Denmark, Sweden or Finland with pretty much no additional effort, whereas providing local content books and ebooks means serious effort negotiating with publishers or setting up portals for self-publishers.
And to my mind this will define Amazon’s book and ebook trajectory for the future.
It’s one thing to set up a Kindle store and offer book delivery in a high-population country like the US (2007) or the UK (2010) or Germany, France, Italy, Spain (2011) or Japan, China, Canada, Brazil and India (2012), But in 2013 the pace slowed (Mexico and Australia), and in 2014 just one new Kindle store appeared, in the Netherlands). Since then, nothing.
As I said back in December, as we start our fourth year of no new Kindle stores being opened one has to wonder if Amazon’s stated goal
to have every book, ever published, in any language available for Kindle customers to purchase and begin reading in less than 60 seconds
has been quietly put on the backburner.
Why? Put simply, as Amazon worked its way down the list of convenient (high population, broad language, high digitisation) countries so the ROI dwindled until stopping with the Netherlands store. A country of just 17 million and a language not widely spoken anywhere but the Netherlands and parts of neighbouring Belgium.
So when we start talking about countries like Sweden (population 10 million), Denmark (5.7 million) and Finland (5.5 million), each with a dedicated local language not widely spoken beyond their respective borders, the prospect of dealing with publishers becomes less and less appealing. The total book market for that language is much smaller than what Amazon has previously been dealing with, and the size of the prospective ebook market even smaller still.
Back in 2000 Bezos visited Sweden, but speculation about an Amazon SE store died when the IT bubble burst. More recently Amazon began talking with Swedish publishers in 2013, but got nowhere.
And therein lies the other factor that, to my mind, means the Amazon love affair with books is drawing to a close.
Sweden’s book market was evidently big enough to warrant consideration in 2013, but the problem Amazon faced then and faces now as it looks to approach publishers in new markets nowadays is that the company’s reputation precedes it.
Publishers in Sweden and elsewhere have seen what happened when Amazon gets to dominate the relationship and publisher revenue becomes reliant on a particularly powerful retailer, and they are understandably not rushing to put their head in this lion’s mouth.
That’s not to say Amazon will not, in the future, make them an offer they can’t refuse. But for now books in smaller markets appear to be more aggravation than they are worth for Amazon, and without big publishers on board then new Kindle stores are not going to materialise.
When the rumours of an Amazon launch in Sweden first began in October last year there were the to-be-expected cries of imminent doom.
As CEO of Sweden’s Pricerunner, Nicklas Storåkers, put it, when (not if, when) Amazon arrives,
Then we’re all dead.
Obviously this guy is not one of the-glass-is-half-full brigade.
I, on the other hand, am, and nothing I’ve seen so far suggests Scandinavia’s publishers need lose sleep anytime soon over the imminent arrival of Amazon. Assuming the rumours are true and Amazon is about to enter the Nordic region, it seems a safe bet books and ebooks will not be on the table.