Swedish audiobook streaming service Storytel’s year-end report, published last week, offered mixed signals to the international market. Total sales for the company, which also includes several publishing houses in the Nordic regions, reached 3,489 million Swedish krona (SEK), the equivalent of $336 million, in 2023, up 9% from the previous year; earnings before interest, taxes, depreciation, and amortization (EBITDA) was 150.1 million SEK ($14.5 million).

“The significant improvement is driven by strong growth in streaming revenue, which is growing faster than costs as a result of continued cost efficiency measures,” reads the report. Those “cost efficiency measures” will include a previously announced staff reduction of some 80 people, or 13% of the company’s workforce. In all, Storytel “has gone from 839 employees (on average) in 2021 to fewer than 540 in 2024. That's more than one in three employees who have left Storytel in three years,” according to Boktugg, a Swedish industry newsletter.

Profitability remains elusive, and the company showed an overall loss the year of 742.3 million SEK ($71.56 million); the adjusted loss for the year was 70 million SEK ($6.75 million), after 672 million SEK ($65 million) in writedowns and noncash impairment charges, including 465 million SEK ($45 million) on Audiobooks.com, the U.S. company Storytel acquired in 2021 from private equity group KKR for $135 million. With the writedown on Audiobooks.com, Storytel said that it is focused on improving the profitability of the U.S. company rather than looking for revenue growth.

Storytel operates in 26 countries, but is strongest in the Nordic region, which accounts for about two-thirds of the company’s streaming revenue, and 1.2 million of the company’s 2.2 million paid subscribers. In 2023, Nordic streaming revenue grew 15% and non-Nordic streaming revenue grew 17%. “Progress was particularly evident in the four growth markets [for the company]—the Netherlands, Poland, Bulgaria, and Turkey—with a 25% increase in average paying subscribers,” Johannes Larcher, CEO of Storytel, said.

Growth in paying subscribers was 13% overall in the non-Nordic regions. It should be noted that one region where this is the exception is in the U.S., where Audiobooks.com continues to work primarily on the basis of credits, rather than as a subscription model. Other large markets in which Storytel is active in Europe, including France, Germany, and Spain, get no mention in the report, and it has become clear that many of the job cuts are coming from operations in some of these key countries.

Another worrisome segment at Storytel is in book sales from the publishing houses the company owns, which include Norstedts, one of Sweden’s largest publishers, and Gummerus, one of the largest houses in Finland. Revenue in this segment fell to 570 million SEK ($54 million) for 2023, from 646 million SEK ($62 million) in 2022—a drop of 11.9%. Today, book publishing only accounts for a sixth of the company’s overall revenue.

The annual report notes that in total, the company “expects to deliver group revenue growth around 10% with an adjusted EBITDA margin of above 12% and operational cash flow above 7% of revenue.”

Among Storytel’s rivals in the audiobook market in the Nordic region is BookBeat, which is owned by Bonnier and, like Storytel, based in Stockholm. In 2023, BookBeat’s revenue grew by 28%, hitting 1.122 billion SEK ($108.1 million), compared to 877 million SEK ($84.7 million) in 2022. Of this, the company said that 70% of the revenue came from international markets, which include the Nordic countries as well as Austria, Germany, and Slovakia, among others.

In 2023, BookBeat added a further 200,000 users, growing to 900,000 in all. “We have created a momentum that we will build on in established markets such as Sweden, Germany or Finland, where, for example, over 300,000 of the 5.5 million inhabitants already use BookBeat,” Niclas Sandin, CEO of BookBeat, said. “We also have high expectations for our growth markets, Norway, the Netherlands and Poland, in 2024.... I am proud of the team that in 2023 showed that we can not only grow, but also succeed in the balancing act of doing it in a profitable and sustainable way.”