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Customers like to binge through an author’s complete catalogue

Interview with Niclas Sandin, CEO of BookBeat

European Business: Mr. Sandin, Audible, Deezer or Spotify – there are many players in the audio streaming business. What makes BookBeat stand out from the rest of the market?

Niclas Sandin: A market that shows this high growth always has room for more players. Various industry estimates put growth in the digital audiobook market in Germany at more than 30% per year. We believe that this is just the start and project continued double-digit growth for the coming decade in the German market. I believe that competition is always a good thing, it raises awareness of our medium. It helps to grow the market and to create a sustainable market environment. 

We believe that music and audiobooks are two very different types of media and demand different approaches in terms of user experience, featuring, marketing and presentation. To compete with other services, we are offering a flat-rate model focused solely on audiobooks in our app. Using our service will be the easiest way to discover a new audiobook and listen to whatever you want to with just a tap on your smartphone.

A market that shows this high growth always has room for more players. Niclas Sandin

Our focus at this stage is on growing the market and finding new listeners, not on competitors. BookBeat’s main KPI when entering a new market always asks what share of the market growth can be attributed to our efforts? What growth were we able to create with our model? An example of the growth potential of markets where we have been active for more than a year is Sweden, where four services compete against each other and digital audiobook sales grew by 50% in 2017. In Finland, where three services compete, the market grew by almost 200%.

European Business: BookBeat has Swedish roots and is headquartered in Stockholm. Does this background have a distinct impact on BookBeat’s company culture?

Niclas Sandin: Coming from Sweden and Stockholm is of course an advantage as streaming services have been the main business model for digital media there for almost a decade. Amongst them, Spotify is the best example. This gives us an in-depth understanding of consumer behavior. At the same time, we have been able to hire a lot of talented developers who are used to building this type of platform service. We used other successful Swedish start-ups as a blueprint when we founded BookBeat in 2015 and are developing the organization, service and business simultaneously by adapting to new circumstances. To achieve this, half of our organization consists of developers and data scientists. For us, it is all about having the curiosity to understand users and, with high speed and agility, act on insights in order to build something that can lead the way for the decade to come.

Coming from Sweden and Stockholm is of course an advantage as streaming services have been the main business model for digital media there for almost a decade. Niclas Sandin

European Business: BookBeat is currently active in seven countries.  Do preferences with relation to genre or language vary among your international clientele?

Niclas Sandin: Our first two launches were in Sweden and Finland back in 2016. In 2017 we initiated soft launches in Germany and the UK to learn more about the local users and how best to adapt the service, marketing and business model before starting to invest more now in 2018. We have also signed contracts with publishers in more European markets but have not yet opened the service to users. So far, it is too early to draw any conclusions, especially since we have only been active in Germany for a couple of months. In Sweden, where we have been operating longest and have the most data, 75% of our users are female and the average age is 38. Our listeners prefer fiction and because the service is unlimited, they like to binge through an author’s complete catalogue, just like when you find a TV series you like on Netflix and watch every season. In Germany, we also believe this type of service will attract the female demographic and that the listening behaviour will be similar. In general, a flat-rate payment model provides the greatest flexibility for consumers – no limitations, no commitments. Consequently, we see that our consumers are eager to explore and end up testing a far broader variety of titles that they would certainly not have discovered if they had a subscription that limited the amount of books you can listen to.

European Business: How important is the role of the publishing house Bonnier for your activities, particularly with regard to future expansion?

Niclas Sandin: Being owned by one of Europe’s leading publishing houses is key, both in terms of getting the overall business model to work by owning the content but also in providing credibility and trust within the book industry. The only way to make this type of business successful and sustainable is to offer great content, and to do that, you need the publishers on board. Being owned by a publisher lets everyone know that we are in it for the long term, with a focus on creating something that works for the entire value chain, the customers, the publishers, the authors and rights holders. We only enter markets where we understand the publishing industry and have some of the major publishers on board. 

European Business: Could you please finish the following sentence: I like listening to an audiobook most, whenever I …

Niclas Sandin: … need to relax and get the most out of a late-night plane ride between Germany and Sweden.

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