A Swedish breakthrough for streaming books

Av Terje Colbjørnsen, 07.03.2018.

When we talk about streaming, it is most often with reference to Spotify and Netflix (possibly also YouTube). The STREAM project attempts to widen the frame of reference by also looking at other services and by considering other industries than music, film and television. Take, for instance, the book industry. In the world of books, we have seen a number of streaming providers emerging in the last five years, but the streaming model has not quite taken hold. It is still too early to say whether and in what form streaming will be a significant long-term distribution model for digital books, but a recent report from Sweden suggests that a breakthrough has come in this market.

Sweden has three competing streaming services for ebooks and audio books. Storytel is by far the largest with approximately 84 % of the market, according to estimates from industry analysts. Nextory and BookBeat are the two others. Bokus and Akademibokhandeln are among those planning to launch digital subscription services in the near future.

One of the most striking facts related in the report, called Boken 2018, is that revenues from streaming (or digital subscription, as it is referred to) services are up by 50.1 % from 2016. Internet stores remain the leading book sales channel and increase by 5 % from 2016, while both physical bookstores and supermarkets/grocery stores are decreasing.

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Figure 1. Analysis based on data from Erik Wikberg (2018): «Boken 2018 – marknaden, trender och analyser»

Now, rapid surges in percentages are not unheard of in immature markets. You might remember the 200-400 % rises in ebook sales in some years following the launch of Amazon’s Kindle device? These sales reports lead some to predict ebook market shares of 50-80 % in 2018-2020. Suffice it to say, we are not quite there. Moreover, steep rises in percentages do not necessarily equal significant sales numbers. It all depends on where you start. However, the upsurge in percentages from 2016 to 2017 do in fact signal that streaming is taking a significant portion of the Swedish book market. As the figure below indicates, digital subscriptions now account for 12 % of the total market (up from 8 % in 2016).

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Figure 2. Analysis based on data from Erik Wikberg (2018): «Boken 2018 – marknaden, trender och analyser»

Listening and reading in Storytel, BookBeat and Nextory increased by 64.8 % from 2016. When compared with other sales channels (where unit sales are perhaps more indicative of actual reading practices), the volume of listening and reading in streaming services puts the channel almost on a par with internet bookstores as the leading channel.

Unfortunately, the Norwegian statistics are not directly comparable, as streaming is left out. However, the latest figures (June 2017) from the Norwegian Booksellers Association indicate a much stronger market position for physical bookstores, accounting for 63 % of sales. Storytel, Sweden’s leading streaming service, is also present in Norway where they had 30 000 subscribers in 2016.

The report “Boken 2018” is written by Erik Wikberg, Ph.D and researcher at Stockholm School of Economics, on behalf of the associations for Swedish publishers and Swedish booksellers.

Besides contributing interesting statistics on the Swedish book market, including streaming, the report also contains quotes from industry professionals. Clearly, streaming is the talking point for many (all quotes translated by TC):

«It is noticeable that there is a shift towards digital subscription services going on right now”, says Maria Hamrefors, CEO of Akademibokhandeln, Sweden’s leading bookstore chain. As mentioned, Akademibokhandeln is among those preparing to venture into streaming.

Camilla Silfvenius is Head of content at streaming service Nextory. She observes a shift in attitudes and expectations, where consumers are learning from experiences with Spotify and Netflix: “Having everything accessible is a quite new phenomenon. I believe that has influenced the emergence of different kinds of digital subscription services.”

According to the report, both Silfvenius and Niclas Sandin, CEO of streaming competitor BookBeat, emphasize the differences in business models between streaming and other sales channels. Digital subscription services, they claim, appeal to groups that are not previously heavy users of books. The audio book format in particular, has created new customer groups. Further, more so than other sales channels, streaming services put authors’ backlists into circulation. And the seasonal variations are also quite different for streaming ebooks and audio books. Sandin of BookBeat is enthusiastic about the willingness of Swedish consumers to pay for book content:

“The rise of audio books in particular makes the book market stand strong in comparison to other digital media such as Spotify and Netflix; and the listeners demonstrate a superior willingness to pay for books, with as much as 200 SEK per month. (…) In average, our users spend about 20 hours on audio books, which equals just over two books per month. In a full year that adds up to significant numbers. I find it hard to see that there was ever a time when so many Swedes spent more than 2000 kroner and 240 hours on books per year, as they did in 2017. It feels like a message of strength for the whole industry, which is in a transition from not just competing amongst ourselves.”

The report Boken 2018 is freely available for download from the Swedish Publishers Association’s website.

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