But it is (just one) example of the sort of headwinds Storytel will increasingly face in the emerging markets as this decade unfurls, that will, if not derail, at least act as a brake on the runaway train that is Storytel.
It’s almost a non-story as the Storytel Q1 results are declared. No surprises, no new announcements, just a deep drill into the numbers, so this will be relatively brief, but for a single throwaway line in the latest press release that invites speculation and extrapolation.
But first, the aforementioned numbers:
Storytel’s Q1 results show an increase of 98,600 new subscribers on Q4 2020, in line with the forecast of 1,542,000 total.
Year on year Q1 was up 385,800 customers compared to Q1 2020.
Q1 streaming revenues came in at SEK517 million ($60.5 million), ahead of the SEK514 million forecast.
Just shy of 1 million subscribers (957,500) came from the Nordics in Q1, bringing in SEK402 million ($47 million).
More importantly for observers looking at the global picture, in the Non-Nordic segment subscriber numbers grew 58% YoY to 583,100, amounting to 214,100 new subscribers over the year, and 67,100 up on Q4 2020.
Non-Nordic streaming revenues grew 45% YoY to SEK114 million ($13.4 million), with Mexico delivering a slightly below expectations performance thanks to,
a longer and ongoing trial campaign in Mexico which is estimated to convert in the second quarter of 2021.
So overall as expected, but are there early signs here of the headwinds TNPS has previously anticipated?
Impossible to be sure, of course, but the “longer and ongoing trial campaign in Mexico” invites speculation.
It was back in November 2018 that Storytel launched in Mexico, which means barely halfway through the 5-year establishment period before breaking even that is Storytel’s standard.
And I readily profess to not being familiar enough with Storytel’s localised operations to know if the “longer and ongoing trial campaign” in Mexico is out of the ordinary, but the reportage suggests it is, else why spell it out in the Q1 results press release?
Could it be that the competition is making itself felt?
It was back in October 2019 that US-based streaming service Scribd announced its localised launch in Mexico.
And per an op-ed here just last week, Scribd has been busy in Mexico, announcing it has 100,000 Spanish-language titles (ebooks and audiobooks) and was making a big push with original content for this market.
It’s reasonable therefore to assume the “longer and ongoing trial campaign” in Mexico is a direct response to Scribd’s growing presence in Mexico, which would not have been anticipated back in 2018 when Storytel MX launched.
That’s not to suggest Storytel feels threatened by the Scribd initiative – the market is big enough for all, and Storytel is the stronger brand with for the foreseeable future the bigger catalogue.
But it is (just one) example of the sort of headwinds Storytel will increasingly face in the emerging markets as this decade unfurls, that will, if not derail, at least act as a brake on the runaway train that is Storytel.
