Unless a major opportunity to enter a mature market comes along akin to the Audiobooks.com deal that just brought Storytel to the USA, we can expect few surprises hereon and cannot rule out some of Storytel’s emerging-market operations being shuttered.
Jonas Tellander may have been sidelined, but the Storytel success story continues, albeit at a slower and less-globally focused pace than before.
Total streaming revenue in Q1 hit $74 million, broken down as (after rounding) $48 million from the Nordics and $25 million from the rest of the Storytel markets.
The non-Nordics revenue jumped an impressive 108%, but the numbers lose some of that impressiveness when we factor in the newly acquired US operation Audiobooks.com, which contributed $8.6 million of that $25 million Q1 non-Nordics revenue.
Nordic paying subscribers hovered around the 1 million plus mark, while the non-Nordic subscriber numbers almost matched that (990,000), belatedly taking Storytel across its 2 million subscriber target for 2021.
Storytel Russia subscribers and revenues will form part of the Q1 numbers, but with Storytel Russia on hold since the invasion of Ukraine in early March it means not only will there be subscriber seepage and zero revenue since the Storytel RU public-facing service was put on hold, but there will also be essential baseline operational costs sapping Storytel’s overall bottom line as we head into Q2.
The Q1 2022 report does not mention how much of the Q1 subscriber growth came from Audiobooks.com in the USA, but a glance at the 2021 Annual Report shares with us that Audiobooks.com brought some 170,000 new subscribers and 300,000 titles to the table.
Storytel’s catalogue now stands at 700,000 compared to Nextory’s 900,000. Nextory of course had two significant acquisitions to its credit at end 2021, with Nubico (Spain) and Youboox (France) marking a strategy shift for Nextory that we may well see continue in 2022.
Storytel is no stranger to expansion by acquisition, as we know, Audiobooks.com being just the most notable of recent buy-outs, but with investors pulling in the reigns post-Tellander, the Interim CEO Ingrid Bojner will be looking to continue the strategy-shift focus on the mature Storytel markets.
Which means that, unless a major opportunity to enter a mature market comes along akin to the Audiobooks.com deal that just brought Storytel to the USA, we can expect few surprises hereon and cannot rule out some of Storytel’s emerging-market operations being shuttered.
In the Q1 press release Bojner asserts,
Organic growth is healthy across both the Nordics and Non-Nordics segments.
“Healthy” is not defined, and Non-Nordics is left vague, leaving the obvious conclusion that while some Non-Nordic markets are “healthy”, others not so much.
Otherwise why the desperate need in 2021 to refocus on the mature mature markets?
Under Tellander Storytel opeated to a five-year break-even strategy that worked well for many years but fell foul of investor expectations. In countries like India subscriber prices are so low that while India will of course bring subscriber volume to the company its revene will barey move the needle.
The concern is that the very act of refocussing on the Storytel mature markets to boost short-term profits means the Storytel emerging markets will see even less investment and get fewer resources, depressing growth and extending their break-even targets to the point where some may be written off.
Let me end this post by noting that it was way back in July 2020 that Storytel first announced its intention to launch in Indonesia, a country of 212 million internet users
.
The launch finally happened in Q1 2022, taking Storytel to 27 markets.
Ingrid Bojner did not deem this new launch even worth mentioning in the Q1 results statement.
And while the Storytel international landing page has been updated to include Indonesia, three months after the acquisition of Audiobooks.com was completed there is still no reference to Storytel being in the USA.
