Very welcome to Storytel's first Capital Markets Day. Yeah, we haven't done that before, so it's quite fun. Thank you for making the time this morning to come here and spend a couple of hours with us. The place we're in now is actually quite special for Storytel. Not the actual theater, Biografen Sture, but actually this address, Birger Jarlsgatan 41, is where we lived for seven years, and you could say that we grew up here from 2009 to 2015. At some point I actually thought that we would never, ever leave this address, but then we did, and we're fine anyway. I really like this neighborhood here. Good. The presentations we're going to show are available also on the investor site, as you can see. If you need Wi-Fi, you can see the login here.
We're not going to show that later, so should I give you five seconds to log in? Five, four, three, two, one. The mobile network actually works fine here. Good. You're ready? This is what it looks like. I'm going to start talking, and then we'll have Ingrid Bojner, our Chief Commercial Officer, coming up, and then Stefan Tegenfalk, our Chief Development Officer. Ingrid will come back, and after one hour, we'll take a coffee break. A short one, ideally 20 minutes, but we put 30 minutes here just in case. Rickard Henley, our Publishing Head, is going to come in and talk about the stories we create, and then Sofie Zettergren will come in and talk about the financial stuff and value creation. I will round it all up, and then we'll open up for Q&A, and after that you'll get some lunch. Okay?
Sounds good? Awesome. Let's get started. What we're presenting here today is basically the Storytel's streaming organization. Basically the heads of that. That's my management team that's here today. It's Ingrid, as I said, Stefan, Rickard, and Sofie that you'll meet on stage today. We have also a couple of publishing houses in Sweden, Denmark, and Finland that we own, where the governance is run via the board, more or less. This is the 450-people strong organization that we have within streaming, and that also makes up most of the value of, I think, the company on the stock market. You ready? Yeah. Good. I'm going to start giving a little background on Storytel, what's happened these past 15 years, or at least the first 10 years, and then I'm going to talk about the market opportunity.
The audiobook market, how big is it and how big can it become? How we think about growth and how we can grow and become an important player on the audiobook market. Those are the three steps or parts of the presentation. Who are these guys? This is Jon Hauksson, my co-founder, and myself on the Book Fair 2005 in Gothenburg. We'd just launched Storytel, or Bokilur, as we called it. Yeah, it was fun. I think the book market needed a mobile audiobook service, but maybe the customers didn't need it so much at the time, because not much happened the first couple of years. We learned a lot. I'd set up a couple of criteria for the company I eventually wanted to start up, and one was it was going to be a consumer product. I thought that's most fun.
Somehow technology-based. I was a real tech geek at the time and bought all the gadgets you could find, including the iPod, which actually is basically how I got the idea about a mobile audiobook service. I thought that why not start up something that can grow big over time, but maybe it's not the biggest of markets at the time. That's more fun. It feels a bit more innovative if you can kind of invent the niche. It should be a company that has a positive impact on people's lives, or it should feel well. I didn't want to do gambling for one, and would never think of tobacco or that type of stuff. Books, eventually mobile audiobooks, could there be a better fit for my startup dreams than this? No, I thought this was the thing. We started.
We worked for a couple of years. I think four years down the road, we still only had a couple of thousand subscribers and had to basically save the company in a TV show, which some of you may have heard of, called "Dragons' Den," "Draknästet." That was really hard. I don't know if we have Rickard, who invested. Yeah, you're there in the back. Thank you. Rickard here in the front of the picture was gutsy enough to say, "I want to spend SEK 1 million on this guy." Then things have improved over time. In 2010, some things started to happen. We had Spotify being launched in the Swedish market with a paying service, and we had the iPhone really kicking off. I think half of this crowd probably bought an iPhone in 2009 or 2010.
Things started to happen because all of a sudden, you could actually use the internet on your mobile, which had only been a remote dream for the mobile carriers before. We started to see some really good things happening. Ultra-high growth, 80% CAGR over these six years. We actually went profitable already in 2010 and kept that profitability throughout that extreme growth part. We realized that the book market doesn't produce enough audiobooks, so we needed to add that to the book market. We started to produce our own audiobooks. We started to buy a lot of audiobook publishers. Found that, well, why don't we figure out a way to do like Netflix has done, something that is basically sold directly on our own platform. We started Storytel Original four years ago now, and that's now a super international business in itself.
I launched our first couple of international markets, so Denmark and Netherlands were the first, then Norway followed after that. I think at the end of this period, we had six markets. Also became a public company as we acquired Massolit Förlagsgrupp in 2015, that had a position on the Aktietorget listing already before. We entered the public environment and made a lot of acquisitions. The thing besides Draknästet that people who don't know Storytel so well, and you speak to them, what they probably have heard of is the acquisition of Norstedts in 2016. That really sent a very interesting signal to not only the book market, I think, but to parts of Sweden as well, because Norstedts is such a strong brand. People typically know about Norstedts as a publishing house. You know Bonnier and you know Norstedts and maybe Piratförlaget .
That was kind of weird when this startup company bought Norstedts. Now I think nobody thinks it's weird anymore because we're so much bigger. That was nice years. In those years, we spent, as I said, most of the time we were in this building and really found our ways on how to develop the company. We bought some other companies as well. The one that probably made most impact on us was the Mofibo acquisition in Denmark, where we really struggled to get into the Danish market in a good way, and we came up as the runner-up. Then acquired Mofibo, and all of a sudden, we had an equally strong position in Denmark as in Sweden. It was a really good acquisition. Acquisitions has been an important part of what we're doing, and in particular in publishing.
Why do we think that publishing is so important? I think it's really three elements that are crucial. The first one is that, frankly, when we go into a market, like say India or Netherlands or most markets, there are no audiobooks available, so somebody has to start investing in producing them. That's typically the role we take, only to get a good offering to our customers, basically, to get the service started so people can enjoy Storytel. Then as the market matures a bit and as Storytel becomes bigger, it also becomes a pretty good business to run publishing activities, because they sell well and the economics of the whole thing is very good. It's a backlist type of business. In book market, you distinguish between frontlist and backlist. Frontlist is the new stuff, this year's stuff, and backlist is all the old stuff.
The old stuff, there was no market basically to sell that before until the digital and audiobooks came along. Finally, in very competitive markets, like the bigger ones were at Sweden, Denmark, you see that we need something to differentiate our service. That means we need to produce Storytel Originals. We need to produce interesting series that actually gives us a point of differentiation vis-à-vis our competition. Those three factors basically is the reason why we do publishing. Another very interesting aspect with the book market is that 85% of all the consumption in the market is in the local language. This is not an English global launch type of market. You can't do that in the book industry. You have to build it bottom up.
That's why we spend so much time and effort on building up these local companies, these local entities, where we always strive to find a local product/market fit. Basically tailor-make our product, our catalog, the way we market ourselves, the way we curate the content, tailor-make that to the local market. That sometimes take a little bit of time. You have to trial and error and then find the right way. Sometimes you have to change the payment method because the ones we use in the other markets don't work. Another aspect of why we want to make sure that we make the world a more creative and empathetic place with great stories. The great stories, we should be there to make those great stories thrive. This is the mission of Storytel, and I think it's a good one.
I think it's one that really represents what we're doing and that we can keep for a long time. I think if you walk into the offices of Storytel, you wouldn't actually find this on the wall. Ask one of the employees, I'm hoping that three out of four probably can more or less say this sentence, which is nice. It means something to us. It means that this is really what we put on this world to do as a company. A very important aspect of the service that we provide is the curation. We have six million book discoveries made by our 1.1 million subscribers every month. Which means approximately five book discoveries per person, and half of those are based on our own programming. It's basically our own content creators.
It's our own intelligence people that creates lists, creates algorithms, and with the help of those, make sure that we can find the customer. This is something that works really well, and that we're spending increasingly efforts on improving. What about the book market? Well, did you know that the book market is, look at this, twice as big as recorded music, radio, and podcasts? I didn't. It's a big market. For Storytel, a part of that market is educational books, which Storytel is not really doing. A part of it is fiction books, which frankly could work if it's story-based, but a lot of fiction books don't work that well in audio. If you look at the relevant part of the market for Storytel, it's really the fiction book market. Right now the audiobook market is a lot smaller.
Fiction books, like SEK 600 billion, and the audiobook market, about SEK 4 billion-SEK 5 billion. Okay? Globally speaking, it's still a very small part of the book market, the audiobooks. Is this good or bad? I think it's really good because there's a potential in my view that the audiobook market could make up as much as 50% of this fiction book market. What do I base that assumption on? Well, if you look at the Swedish fiction book market, over the past six years, we've grown the audiobook share of that market from virtually zero to 50%. 50% of the revenues of fiction books in Sweden is now audio. What if we could translate that into the rest of the world? That would be nice, wouldn't it?
That's basically when we would see that the audiobook market could grow this much. Looking at the audiobook market, 10 years ago, it was SEK 6 billion. Now it's SEK 40 billion. That means we've had a CAGR in the audiobook market of about 20% over these past 10 years. It's primarily growth in the U.S. and in the Nordic region, and to some extent in Germany and China. Other than that, the audiobook market is very nascent and very unexplored. This is the growth we've seen in the past. What share of that is Storytel? Storytel's revenues in 2020, as we informed about in the press release this morning or last night is about 5%. SEK 2 billion out of SEK 40 billion is about 5%. That's our share of the audiobook market today.
If you were to exclude, for instance, the U.S. market where we're not present, you would find that our share is about 15%. We estimate that in 10 years, the audiobook market will be worth SEK 200 billion worldwide. Continue to grow with a CAGR of 15%, growing from SEK 40 billion to SEK 200 billion. My guess is as good as yours as to what Storytel's market share will be there, but it's clear that we are investing a lot. We are in a position where we know very well what the audiobook customer wants, and we are already in a position where we understand how to set up new markets and find that local product market fit. How do we grow? Well, I think there's four different ways we do it.
We grow on the existing markets, as we've seen in the past. We expand to new markets, as we've also done a lot in the past. Improve on your existing product. Stefan is going to talk about that when he talks about development and our platform. We launch new products. One example of those launches is the Storytel Reader, which you'll be able to buy outside here today. I hope you take that opportunity. It's a great device. With that, the Storytel Reader, we've seen that the loyalty, the survival of the new customers that come in and acquire the Storytel Reader is twice as high as the normal customer. It's a lot about increasing ARPU, a lot about increasing extending customer lifetime with these new products. As I've shown, we've done it a lot organically and also via acquisitions.
In this aspect, it's always important to think about the short term and the long term. Grow an existing market, improve existing product, typically that gives you good growth in the short term. Whereas, expanding to new markets and launching a new product, that will give you some growth long term, but maybe not short term. This is what our map looks like today. Ingrid will share a lot more about that. Basically we're on 10 different markets. We're divided into five regions internally. They're kind of weird because Russia is in the west here. Five different regions. As I said before, very unique approach in every single of these markets. What's our expansion looked like in the past couple of years? In 2016, three years ago, we had six markets launched.
As you can see in the bottom right here, we had two of those markets with 50,000 subscribers or more, those two markets were Sweden and Denmark. As we've expanded to new markets and now grown to 20 markets, added a couple of markets, three, four, five markets every year. We've seen that the number of markets that have 50,000 subscribers or more have now grown to eight. We've added four more markets only in 2019. Why is this important? Because as the market passes the 50,000 subscriber milestone, we see that we start to very rapidly approach a profitability level, which is incredibly important. We now have a lot more markets to tap into in order to drive profitable growth.
If we look at the markets that have turned profitable so far, we can see that we've just added Netherlands after new year, and we now have five markets, and it's taken them anything from Iceland with one year to Sweden and Netherlands, which took five years to go to profitability. We hope to add a number of more markets for this in coming years, and I think Sofie will share more about that later. Good. That was it from me. Now I'm going to invite Ingrid to stage to talk about the customer and how we actually reach them and why they think that Storytel is so great, right?
Yes.
Good.
Thank you. Thank you. Good morning, everyone. You can now, since we are in a cinema, you will just sit back and relax for about a minute. Welcome to our world of stories. It's designed for you, the modern consumer on the go that wants to enrich your life. We are in the middle of a media industry revolution where delivery formats are changing rapidly. We go from traditional to digital, from broadcast to on-demand, and new companies are on the forefront that we haven't heard about since 10 years ago, ruling the streaming format. Right in the middle are the modern consumer that are fast to adapt to the changes and also are in control. They decide on what and where and how to consume. It is in this landscape that Storytel has been driving the digitization of the book industry for over a decade. It's also in audio.
It's an audio revolution, one can say. In Sweden, according to Kantar Sifo, 90% of the consumers today enjoy any type of audio on a weekly basis. All are on the rise except for traditional and digital radio. It's well compensated by the growth in both streaming music, podcasts, and of course, audiobooks. 13% claim in Sweden, above 18 years old, that they enjoy audiobooks on a weekly basis. This has grown just over the past year by 18%. Ever listeners to audiobooks are about 33%. This number is 50% in the U.S. In Sweden, that means 2.5 million people on a yearly basis listen to audiobooks. We think that we found a perfect niche in this growing audio industry. We call it meaningful recreation. It will demand something of you.
It is a little bit more forward-leaning and engaging, so it requires more of your attention, maybe than to listen to a podcast, and again, a little bit more than music. We believe that we are the solution to everyone's daily problems these days: boredom, insomnia, and loneliness. We know that research from SSE, Stockholm School of Economics, recently said that one of the reasons why people listen to audiobooks is to feel a sense of community. Listening can actually be a quite intimate experience. In short, we provide self-help, self-development, and a sense of community. When do people consume audiobooks? If you look at this chart, you can see that the prime time for audiobook consumption is at night, between 9:00 P.M. and 11:00 P.M.
There's two other points when you usually listen to an audiobook, and that's when you typically go from home to where you're going to be during the day, work or school. Morning and afternoon. Interesting to see, we have researched what the mood are linked to audiobook consumption. On the Swedish market, we can see that the sense of calmness and relaxation actually goes up while listening to Storytel or audiobooks. We promise you three things, or actually it's four, but I will come to the fourth one. It's you will never run out of stories, you will have a great listening or reading experience, and you will have the latest formats and most innovative content. The second one, listening and reading experience, Stefan will talk a lot about how we provide that through our tech platform.
The third one, about the latest formats, Rickard will come back to talk about how we work with publishing. The first one is the one that we are very proud of. It's our algotorial approach to discovery. We provide our customers on a daily basis with recommendations that are, of course, personalized in the way that it takes into account lots of data. On top of that, we also have local content curators in every country we work in. That is the third wave of digitization, bringing humans and AI together. We will do this, which is the fourth promise, in a local way. Our brand impact on people's life can be measured by how much time they spend with us, or how important we are to them. On average, a user in our service spends 30 hours a month with Storytel.
Engagement is therefore important, and finding your own pattern of usage and habits is important. We engage a lot with our customers, and we have a whole web of different CRM triggers and activities in order to spur and engage our customers. We like them to listen. One of the measure we call CEV, or customer engagement value. It's based on recency, frequency, and time, whenever this change, that might be a prediction for churn. We trigger people, and we ask them to engage again. We've done A/B tests, we actually know that these triggers work. When we control this, about the activity goes up by 26%, when somebody is actually triggered and come back to the regular behavior.
Daily active usage and weekly active usage is also an example of engagement on our service, and this may differ from the countries which are mature, and that means it's an audiobook tradition, or the countries that are more immature. We believe that providing this service, the Storytel, on all our markets, we can actually spur and change this behavior as we are the driving force of the audiobook revolution. These typical numbers will change over time. Our brand has started to gain some international traction. If you compare us on the App Store and where we are placed in the book category, we enjoy an unthreatened number one position in eight of our markets, and we are on periodically number one still, in 13 of our countries. We have 20 countries launched, and five of them launched last year.
This is on both Google Play Store and, of course, App Store. We have a very simple, straightforward, easy-to-comprehend business model that works in all of our countries. We basically make sure that authors and publishers get access to their consumers, and vice versa. We provide an unlimited subscription model on a monthly basis. That means that a consumer, if they paid their price for a month, they can enjoy as many stories as they want to through our easy-to-use app. For this access, of course, we share royalties with the creators. As Storytel grows, as more customer join our platform, we can also pay higher share of royalties. The unlimited offer looks basically the same everywhere in the world. It's an unlimited offer.
It's a premium offer for a month, and it's both the local language plus selective English catalog, plus sometimes even minority languages that are spoken in that country. In Sweden, it's 169 SEK. In the Netherlands, it's EUR 11.99, and in India, it's INR 299. We have a local pricing model. We have a very local approach to language, and I think this is something that distinguishes Storytel from many of our competitors. We always have the local language at the core of our app, but we also include minority languages in some countries. This is why we have decided to have the whole Arabic own produced catalog in our Swedish store. This is why we have our Turkish catalog available in our German catalog.
We've only been there for six months, the Turkish catalog is actually reaping quite a lot of benefits in Germany with almost 15% of the consumption. We introduce the offer to everyone through a free short trial period. This is to set your own behavior, test the audiobooks out, see what you like, discover, you move on to an unlimited subscription for on a monthly basis. Once you've done that, you probably want to invite your family, you move up to our Storytel Family subscription. You can invite your family, friends' families, and of course, your kids as well. Family is something that's actually reaped quite a lot of good benefits already on some markets where the penetration is up to 20% on some of our markets. Next year, we will test out a limited subscription in selective markets.
This is to start introducing Storytel to a larger number of people in some of our countries. What we already tested is the new products that Jonas spoke about, and that Stefan will come back to you and talk more about. The Storytel Reader and Stories by Storytel, for example. The Storytel Reader is something that is actually really creating a stickiness to our service, and we can see very high customer satisfaction numbers of the Storytel Reader. Jonas already shared the number. This satisfaction actually turns into stickiness of our product. These are the numbers from looking at people who have started a subscription with us from a Storytel Reader or a family point of view. You can see that almost the double amount of people stay within our service after a year, compared to only having the regular unlimited subscription. We know that our proposition is interesting.
We have proven that our business model works here in the Nordics. We see that in new countries we go to, we are very welcome, both by the publishing industry and also by consumers. Actually, we do have an impact in the book world. People sense that they read and listen more after having joined the Storytel platform, plus 80% of our subscribers actually say this in many of our countries. They also do this on a more frequent basis. 87% of the people in Netherlands that are on our Storytel platform claim that they enjoy both more, but also more often, a reading or a listening situation. What I think is even more intriguing is on the next slide, which is actually that people expand their interest and look at more genres than earlier.
This, we believe, is really due to two factors, our discovery and recommendations, and secondly, our unlimited model that really spurs you to test a new book from maybe a genre that you didn't really know that you liked before. Last but not least, people actually learn something from being with Storytel. 72% of our customers in Turkey and in Russia claim that they actually learned something new while being on a subscription from Storytel. We also know that stories, reading, listening, is a social activity. It is something that you want to share with others. This is why we did a fun social media campaign in Norway in the summer of 2018, where we asked people to become the narrators of their best story. We think we picked a great winner.
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Thank you. I will now introduce you to Stefan, our Head of Development. Welcome up on stage, Stefan.
Thank you, Ingrid. Good morning, everybody. I would like to start to present this map. It's a real-time map. It was recorded yesterday at the same time, and it shows when our users are opening their app in the morning. As you can see, there is a lot of activity in Northern Europe, Scandinavia, down to the Netherlands and some other areas in Europe where we are present. This map becomes more and more orange for every day, and it's really interesting to see this every morning when you come to do the work. Okay, let's talk about our R&D organization. We are 115 in our staff today, and we will grow to roughly about 140 in our staff this year. We come from 21 nationalities, and we have five main legs.
The first one is the Tech department, who is taking care of the development and maintenance and operate our service. The second one is the Product Management with the product managers that make sure that we do the right thing at the right time. We have the Intelligence with the data science and business intelligence analytics that collect all the data from our customers and our marketing. We have the Innovation. They are making the business development and make sure that everything we do has a good ROI. The last one is our ecosystem of products, which is the Story, Stories by Storytel, and Reader. Daily, we are handling 1.1 million customers. We have more than 325,000 titles in our service, and we have roughly about 1.3 million app openings every day, as you can see on this map also, at several platforms.
In 20 markets with more than 24 languages and almost one million of streamed audio hours every day. Also we have a lot of multiple product offers in different markets. Storytel has always been an innovator. We are not only following the audio trend, we are actually leading the audiobook revolution. Everything was starting with the mobile streaming of audiobooks, and then we have invented a lot of different features and functions that today more or less are industry standard, like the sleep mode, offline mode, variable speed, chapters in audiobook, and the synchronizing between audio and text, which is kind of a very advanced technology that not everybody have. We are a very commercial-driven development organization.
We have three very important areas when we have put our focus on, that is developing products and functions and features that create a product market fit in our local markets, increase the intake of customer, and improve the trial to pay conversion, and also improve the Customer Lifetime Value. How do we create a product market fit in our local markets? Payment. We have to be able to charge the customer on the customer's condition. That's why we have developed a completely new payment platforms because the local customer likes to use payment methods like local e-Wallet solution, local debit cards from the local banks, and also their mobile operator's billing platform. We have to be there when the customer are. Actually, the output of this is a triple-win situation. For the customer, it's convenient.
They can use what they already use when they're paying online. The payment provider, they allow us because we have a recurrent business model. Every month, they get their kickback, month after month. From our perspective, we get a really good marketing platform for our sales. These payment providers, they have millions and millions of potential customers that we, for a quite low cost, can market our product against. Here is some examples of what we recently have integrated to. KCP in Korea, Sofort, Klarna in Germany, and Yandex in Russia. Just a few weeks ago, we integrated to them. Okay, retail is detail, and we need to pay attention to details in each market. Okay? Marketing message is very important. The sign-up and onboarding flow is also very important and the product offering.
What we are doing or what we are in the finish now is to developing a really good marketing platform, the local marketing people and the global marketing people can create local campaigns that fits the local strategy and make advanced A/B testing that drives down the intake cost. The onboarding flow and the sign-up flow is very important to make from a local perspective. The price and bundles is also very important to be local at. This platform is excellent for this purpose. How do we increase the intake of customers? Well, among many things, target the right customer segment is very important, and make sure that we got customer that will be profitable in the end, and be on multiple platforms. Today, we are on iOS, iPhone, and Android, and also Sonos loudspeaker system.
This year, we will be on Android Auto and also Apple CarPlay and more sound speaker system and also watches. How can we improve the trial to pay conversion? One very important thing is to activate the customer via notification. This year, we will release in Q1 a notification center inside the app. This is the first time that we will have direct connection with the customer inside the app. This is very good for our global marketing team and the local marketing team. They can convince the customer to go from a trial to paying customer. This is also important because our recommendation engine will communicate with this as well, which means the engine can propose different titles in order to convince the customer to stay here in our service. Also, we are coming with features in the near future.
For instance, when a customer has liked your reviews, you get a notification from this user as well. A lot of new features coming later on. How can we increase the customer lifetime value and drive engagement? Personalization is very important. Each user is unique and needs to have their unique content. Okay. The recommendation engine is also very important and something that we call inspirational pages that's coming later on. It's actually editorial materials that our editors and the publisher can put directly in the app in special pages. Also peer recommendations. When a user recommends a title or something else to another user, that is also important features that we are working with right now. Example, 50% of what our users placed in their bookshelves is based on our recommendations, and the rest, 50%, comes from our excellent search engine.
We have a AI-driven matchmaking platform, but with human interaction. Our local content curator works together with our algorithms. It's a machine-human interaction, which is the outcome from this is really great, and it's getting better and better for every day. Moreover, excellent reading experience is also very important. Last year we introduced a new e-book reader inside the app version. This year we will do the same within iOS. It's coming, a new e-book reader inside the iOS. State-of-the-art user interface is also very important. Last year we introduced a new player interface in Android, and the same goes for iOS this year, coming with a completely new design. Reading as a social activity. This is something that we work very much on now and will be very important in the future.
Actually, we have already started to build the community for readers and writers, and we already were starting with that when we introduced the reviews last year. What we're doing in the Q1 now is that we introduce a new feature. This is what we call feeling tags. After you have read a book or have listened to it, you can tag it if you become happy from it, funny, or if it was romantic or whatever it is. With this data, together with the data that we're collecting from the text in the reviews, is exercise our recommendation engines even better. This is just the beginning. We are coming with a lot of more features in this area later on. Okay.
Another thing that's coming later this month is something, and also part of the social context that we're working with, is like if you imagine that you look in TV, you look at TV and you see something that is live broadcasting and you know that thousand of others are looking at the same thing, you get the feeling of that you are a part of something bigger context. We are trying to do the same, create the same feeling with these functions. Actually, with the audiobook that you're listening to, you can see how many others are listening to the same audiobook at the same time. This is really interesting feature that we know many customer likes. Again, this is very innovative. Nobody had done this before. It's coming end of this month for both iOS and Android. What drives loyalty and create uniqueness?
One, we are working with this magazine app Story, is coming with an upgraded version in beginning of Q2. It will be awesome, a really good product. We have the Stories by Storytel. The Tap Story app is coming. A lot of new features and functions also this year. We are continually developing the Storytel Reader. All this together with our core product drives loyalty and create uniqueness. We can see that from a lot of data. Actually what we are building is a state-of-the-art service that adapts to local conditions. This is very important. As I said, retail is detail. Connect storytellers with readers, the platform for that purpose, and make reading social again. That is also very important. This year we will drop almost 15 new app releases with enhanced features and functions. This is huge.
We will also come with something that we believe can transform the audiobook market once again. I can only show you this blurry picture. Stay tuned. A lot of things will happen. Thank you. Welcome.
Thank you. Thank you, Stefan. It just makes it a whole lot easier to market and get to all our consumers. I'm back. I'm going to talk a little bit about how we work with our markets and the expansion activities. Storytel is truly a glocal company. That means that we are really reaping the benefits of our flexible yet scalable tech platform, that we have global teams working to set the strategies, set the tools, and how we work in the different countries. We have country teams led by a country manager in each of our 20 markets that work on the local execution, and of course, the customer there is king. This picture is actually from our global conference during the fall that we've hosted for several years now.
It's a great opportunity for all our employees to meet and share ideas and excitement, and of course, also set higher ambition and targets for ourselves. Within commercial, we have three global centers of excellence teams. That is global marketing, global customer, and global content. They all work throughout the whole customer journey. Marketing works on, of course, attracting new customers to our service and get the customers back that might, for any reason, have paused their subscription with us. Our customer team works on onboarding, engaging, and retaining our customers with different recommendations, as I said, CRM communication, and a global support team. Last but not least is really our content team. It's a mix of both the global team with very local execution. They make sure that we have the content available and recommended in the best fashion for all our consumers out there.
This is also why content is really where we start any type of new market activity when we are deciding to expand into a new market. Our model of expansion is very simple. We have a global three-step approach to how we do business in a new market. First of all, it's all about ensuring the local product-market fit, and Stefan already spoke about all the things that are important in that aspect. We always begin with content. Content can sometimes not exist, so we actually have to produce a lot of audiobooks when we enter a new market. That's why sometimes it takes a little while before we can open a service to the public. We set a local team, and of course, ensure that the marketing message, payment, pricing, et cetera, is targeted for that specific market.
We open up, we invite our customers to our platform. This is all about building trial and subscriber base. The word-of-mouth effect is, of course, really important as we have the first users being our brand ambassadors talk about our service, this becomes a viral approach to discussion and marketing. We also have to find the formula for the local growth in an attribution model, meaning that we find from wherever the customer come into our service and make sure that we're there. When we've found the growth formula for a selective market, we go all in. This is with another short-term target in mind, which is local profitability. This is where we grow even more. We ensure that we have a lifetime of our customer that consistently goes up as we engage with the customers.
One of the measures that is really important for us to look at to make sure that we do healthy investments is, of course, the CLV to CAC. Sofie will come back and talk much more about how we create value over time and also our unit economics. As you see, we have different measures of success throughout this journey, and each market takes their own time in order to pass these toll gates. We have learned, actually, over time. This is a chart where it shows you that we could become better and better at expansion. Looking at Turkey and Russia up there, we have reduced the number of months until we reach 50,000 subscribers in a specific country, measured by Turkey by 15 months and Russia by 20 months.
These are also examples of two quite different audiobook markets once we went into these markets, Turkey being a very immature market, whereas Russia already had quite a good standing in audiobooks. What about the attribution model? I know many people in marketing, this is the holy grail, really understanding from where do the customer come and where should we invest. Word of mouth has always been at the core of our success up to date and will continue to be so. Lots of brand ambassadors inviting a friend to join Storytel by giving away a book. Lots of online communities sharing experience about what they listen to and what Storytel does for them. As well of Instagram nowadays, showing in Instagram stories what I'm listening to, which can be shared immediately from our app. Unfortunately, this is not enough, as for many countries.
Yes, we do invest marketing money also in a mix of performance marketing, brand marketing, and a dash of PR. This then becomes the attribution model that works in a selective country, that the local teams work together with our global department in marketing and brand. This is the world as it looks right now from a Storytel perspective. Expansion is heavy investments, of course, as I spoke about in production, marketing, and content. Last year, we explored five new countries in our recently reorganized organization of five hubs. We launched our second and third market in the Latin Americas, which was Colombia and Brazil, and we also launched two markets in the APAC region, which was Singapore and Korea. During the summer last year, we launched in Germany.
We will continue to launch markets. 2020 will really be a year where we continue to make all the efforts to continue to grow in the markets that we already exist in. We will open a few more markets, as you saw from the press release that we released last night. Working with these hubs, that's where we decide on our expansion activities, as well as deepening our presence in the different countries we are in. What about the potential? Are we done? No. We are far from done. If we look at Storytel in Sweden, among the population of 18 years old and older, we have a penetration of our subscription base on 5%. We believe that there's much more. Many more would like to enjoy our world of Storytel. We can do a little bit of exercise this morning, math exercise.
Are you up for it? Yay. Okay. What if we would reach 5% penetration in the markets we've already launched in? What would that be? Any guess? I'll share it with you. That's a 40 million+ subscribers. Actually, I took away India here. That would then be 90 million. As you see, the potential is big. I believe that my team will do the utmost to continue our expansion and deepening of our commitment in all the markets we've already launched together with the country teams. We believe that there are absolutely more countries to go to. There are more languages to add to our already great asset of 24 languages within our service today. There are more customers, of course, to be reached. The audio and streaming technology is just paving the way.
People have enjoyed stories for as many years as we can see in history. Yes, this is what we're up for. Thank you. We will now take a short break. Jonas, you said 10:30 A.M.. We will be exactly back here. Importantly, we have our fantastic Reader out there. If you haven't checked it out, we have a really good offer for you. You don't know how long that offer is going to exist. Try it out, take a cup of coffee, and enjoy and be back at 10:30 A.M.. Thank you.
Please take your seats, and we'll resume the presentations. We're going to see our publishing head, Rickard Henley, in a minute coming up and talk about all these beautiful stories that we create. Sofie will talk about numbers and profitability and value creation. I'll come back and summarize shortly in the end, and then we'll do a Q&A after that. There's food outside. Sounds good? Please give a big hand and welcome Rickard Henley on stage.
The wind wailed and moaned through the treetops of the dense pine forest. It sounded like the rhythmic chanting of monks performing a liturgy of sorrow and anguish in a giant cathedral. As they bowed unwillingly before the wind, it seemed that the branches twisted and screamed in protest. Overhead, the pale full moon appeared only fleetingly between ragged clouds that were chasing each other in a wild frenzy across the heavens. Let's see a bit about your knowledge on the world of stories. Which best-selling classic was that the beginning of? Anyone? No guess? I'm giving you some time here.
War and Peace, no. No, using the words best-selling and classic usually takes you in that direction. Maybe "Lord of the Rings," maybe "The Da Vinci Code," maybe "War and Peace" or something similar. I'll give you a few more moments to ponder before I give you the answer. Meanwhile, I'll introduce myself. I'm Rickard Henley. I'm working as the chief publishing officer at Storytel. I'm going to tell you about what I think is the heart and soul of our offering to the customer, the stories in the service. Mainly the stories that we produce and publish ourselves. Now you had some more time. Another guess? Okay. Even if we are in the book industry, this example will show you that the Storytel world of stories is not quite the same as the book industry.
This was our top bestseller for three consecutive years. "The Legend of the Ice People," that's where the entrance came from, by the Norwegian author Margit Sandemo. "Sagan om Isfolket" in Swedish. This was a fantasy romance fiction story from the '80s that captivated a young audience of teenage girls back then, and which we then brought to new life in 2012 with the famous actor Julia Dufvenius as the narrator. Just to make a comparison so you understand what I'm saying here. Just a few years ago, a fairly unknown pulp fantasy author also, George R.R. Martin, reached both critic appraisal and a multimillion audience through the repackaging and restorage of his novel, "Game of Thrones." This marked the starting point for Storytel's own publishing. We realized that the golden nuggets of the backlist in the publishing industry was quite poorly used and reused.
We decided that with our knowledge about the customer and close proximity to the customer, we could leverage this in a way that very few publishers could do. We could also show the way for other publishers to polish their hidden gems in the backlist. One year later, we acquired the audiobook publisher Storyside, which is now the global rights-holding brand at Storytel. Storyside is the rights-holding company that has all the licensed production under it. Can you answer that? As I said, this marked the beginning of our own publishing, and not just during the last years, we turned into one of the world's biggest audio producer. We're now producing almost 6,000 titles yearly in more than 20 languages. Most of that is licensed book, like "The Legend of the Ice People," for instance.
That makes up for 80% or 90% of our publishing efforts. The rest, the little cream on the cake, is when we commission authors to write specifically for audio, the stories that we call Storytel Original, but I'll come back to that a bit more later. Even further, of course, Storytel also consists of print publishing houses now. In Sweden, it's Norstedts, in Finland it's Gummerus, and in Denmark it's People's Press. That makes up a huge backlist that are now being converted into audio as well, among other things, of course. Let's back up a bit in time, not just to 2012, but a few millenniums back in time, and look at what has made the audio story so popular. Why is this a boom right now? Because it all started there.
It all started in this oral storytelling tradition, long before we had writing and long before we had anything else. We gathered around the campfire, we gathered in the town square and heard the stories from the elders or from our brothers or different sources. Later came writing, and we started writing letters, and we write the handwritten books, which were super inaccessible to ordinary people because they were kept in churches and temples and institutions in different ways, up until this Gutenberg fellow came along and made it possible to duplicate and distribute the written word in a completely different way. Add railways to that, and all of a sudden we had a mass market for the written language or the written story.
It wasn't until about 150 years ago, we could actually store and capture audio in a similar sense, and later also distribute it through broadcast, or sell it through tapes and different vinyls and so on. You know this history by heart. During that gap in time, during that gap between the printed story and capturing it on audio, the storytelling took a very literary direction. It started becoming very closely connected to the printed word, to the written word. What we are doing now is taking it back to this proverbial campfire. It's not in a place now because it's portable, it's accessible by anyone at any time. As Jonas started up this company, had a first logo type, of course, the campfire was in it. He was onto something already back then.
During the last 15 years, we've seen a downfall in the physical book market. This has happened long before the audio revolution, of course. It comes down to different digitization effects, of course. During the last years with mobile internet, with headphones, with the App Store and so on, this has really catalyzed the audio boom. We've seen it with Spotify, we've seen it with podcast. We are living right inside that boom. Now with wearables and smart speakers and everything, this is really turning into a world of audio. I'll just stay in history for a little bit. It's not just going to be history, okay? I'll stay there for a little while. This is Cicero, a politician and philosopher back in 50 Before Christ.
He wrote letters back and forth to a friend, and in one of those letters, he was really sorry because it took him so long to respond to the previous letter. The reason he stated was that, "Well, I didn't have time to read your or I couldn't read your letter because I lost my voice." That's unthinkable today. Of course, you don't have to have your voice when you're reading, but this was how you read. The notion of quiet reading wasn't until a few hundred years ago. Before that, writing was merely a way of storing the spoken word. This is really we're taking it back to where the story was from the beginning. Let's get back to present day, and look at this from our perspective now. Because an audio story isn't just a block of text. This isn't just a story.
Something happens when that story meets the narrator's voice, and then the customer. This is what we call the golden triangle of the audio story. In order to make a perfect audio story, we need to be experts in all of these three fields, and this is what we're trying to do. It's all about creating a story or finding a story, audio first, with audio first perspective, making sure that story finds the right narrator, and that's a good step along the way. If that mix is not then met by the right customer, it's not quite there. I'm going to walk you through these three corners a bit and explain through that how we think of our own publishing. Let's start with the voice. This business is about relations.
The relations between us and the content creators, between publishers and agents, between us and the customers that Ingrid talked a lot about and Stefan talked a lot about. Also, maybe more importantly, the relation between the narrator's voice and the listener's ear. These are two of our more famous narrators from the studio in Stockholm, and behind them you see a wall of fame of all the narrators. These are the voices that are living inside our customers' ears. Because when you have these super-duper noise reduction headphones, everything else is shut out. The train noise or the honking horns and the traffic jam or the neighbor's high-pitched discussion. Everything is moved away. It's just you and this intimate voice in your ear guiding you through a story. Of course, that makes up, that creates a relation.
We see today that a lot of the customers actually follow the voice. They're searching for the voice that they like rather than the story or the author. This is incredibly important in our business. Therefore, we are meticulous when it comes to the casting of the voices, because a good voice can really lift a mediocre story, and on the other side, a really exceptional story can be put down by the wrong combination. I wouldn't say the wrong voice, but sometimes it's just the wrong combination. We also challenge the production processes over and over, together with the narrators. For instance, now the narrator runs the narration themselves in the studio. There's more or less no studio engineer there.
This is our latest invention, what we call the story tool, Vox, which is a tool for the narrator that they can easily make adjustments, they can listen to the previous session, find the right tone of voice, and continue from there, and erase mistakes in a completely new fashion. Also with an interface that my six-year-old daughter works out more quickly than I do, actually. As I said, these relations need to be treasured. This is what the publishing business has been extremely good at historically, talent management, taking care of the talents. This is one of our efforts in this direction, celebrating our talents, in something we call the Storytel Awards, a gala evening that has been going on in Sweden since 2013, and is now being exported to Denmark, the Netherlands, and Finland.
Let's move on from the narrator and to the story itself. Yeah, you understand this, that without a captivating good story, there's nothing there. It's not always clear, as I mentioned in the beginning, that the bestseller book in the traditional book industry will be the bestsellers at Storytel. Some books are really good for audio, and some are not, and sometimes it's even better to create a story from the ground up, audio first. Something we do with the Storytel Original authors. These are some of them in a very collaborative process, working together with our editors and publishers, in a sense more like how you work with television series than when you're working with writing a novel.
This is one showrunner and three scriptwriters working with last year's Christmas calendars and Talgbollen, and in close collaboration with us, and sometimes even with narrators, to create this story audio first. Writing for audio is something completely different sometimes, and these are some of the things that differ. We learned a lot from these years of publishing, and even before that, Storyside that we acquired had been running for quite some time even before. We say that we have approximately 20 years of experience in this. Some of the things is time lapses. Don't do time lapses. Stick to a straight chronological story with a single voice narrator. All of these things tell us something about the situation the listener is in. When you're reading a book, a printed book, a physical book, then it takes kind of all of your focus.
You need to hold it. You need to look at it. You need to process it, and so on. With an audio, everything around you, your eyes are free, your hands are free, your movement is free, so you can do whatever you like. You can drive a car, you can tend your garden, you can do the dishes, or you can sit down, of course, actively listening as well. This means the story needs to tap into different kind of situation than the printed book does. What do we know about the audience then, the customer? Well, traditionally, the publishing industry has not been really interested in whether the customer finishes the book or not. A unit sold has been good enough, because when you put it in your bookshelf, it has been sold, and you get paid for it. Now that's not enough anymore.
To us, an audiobook start is not good enough. We want the customer to finish the book and read the next book and tell their friends about what an amazing experience this was. This is what the business is about. This is when the publisher and author gets paid, and this is what creates a satisfied customer. To measure this, we look at finishing degree, for instance. How many people that start this book finish that book? That's of course, a very easy way of looking at it. We also look at comparing finishing degrees between e-book and audio to see how much the narration enhances the experience, for instance. These are still kind of dull tools in the toolbox, so sometimes we do deep dives into the data and look more specifically into the story. This is something that we call drop-off points.
It shows you minute by minute in a book how many people leave the book at different points in time. As we are a subscription service, you understand that people will leave early because that's what you do in a subscription service. You try out different things, you listen to something before you get captivated, before you find what you need. After that, after the two or three first minutes, it's fairly stable, low, very few people leave the story after maybe 10 minutes or 20 minutes. Sometimes it's an anomaly, like here. In the 14th minute, something of course happens. That's the starting point for our curiosity. We go into the story and say, "Okay, what happened at 14th minute? What can we do better? Is there something we can change?
At this point, it was a change of narrator's perspective and also a new voice that entered the story. Stay away from that. Single voice, usually. All of these things combined, we use when we create this thing we call Storytel Originals, stories that are unique and exclusive to the Storytel customers, and that, as Jonas said, differentiates us from the competition. The Storytel Originals lends their format from another very popular industry standard, the TV series. It's basically in seasons. It's usually 10 episodes of an hour each, and they're very forward-leaning. It's very fast-paced. It's easy to digest, and they go on and on and on, usually for several seasons. They're very true to the genres we know work, suspense, crime, thrillers, feel-good romance, and a dash of comedy. Last year, we tried out something different.
In Russia, we launched The Outpost by author Dmitry Glukhovsky. He was the creator of Metro 2033. I'm not sure if you're familiar with, but he has a huge fan base around the world, created this post-apocalyptic world with that book series. In many aspect, Dmitry Glukhovsky was the perfect author to try this out with, not only because he was huge in a few of our markets, fairly known in a few others, and lesser known in some, but he was an experimental writer that we wanted to work with as well, because he had been writing not only novels, he'd been writing theater plays, he'd been writing movie scripts, and he'd been writing for games. Now together with Storytel, he wrote audio first.
This also altered the business case around Storytel Original a lot. Before we looked mainly at the ROI, the production cost versus the revenues this story would bring in. Now we started looking at earned media and PR effect, and even more importantly, intake targets. How many new customers can we attract with a more profiled story on each market? Will it differ? Will it be different from market to market? In Russia, the effect was quite stunning. During the course of this launch, 18,000 new customers found their way to the Russian service. As I said, the backlist is hugely important, and these profiled Storytel Originals are, of course, a big investment.
If we treat those investment right, if we use those investment to invoke an interest in an authorship, in a genre, in a specific type of story, then we can create this amazing user journey and leverage much more revenue than only on the story itself, but on the backlist, on similar stories, and so on. Here, the content curation and the user journey is key, of course. Another thing that's key is what already been talked about, that we're very local, and this is also in publishing. We need to be local. We need to understand the local market. We have publishers, we have production set up. We have, of course, narrators. Everything is done locally. Because Storytel is global, but the stories are local. Give or take a few different stories that make it into a global arena.
Let's have a look at why this is. As Jonas already said, we all think English is a universal language. When given the opportunity to choose between English or your native language, most people choose the latter, especially when you're going to have it in your ears, this intimate kind of session. In most of our markets, English make up around 5%-10% of the consumption, and the rest, the local language is dominant. It's not just about the language. It's also about the story itself. 86% on the top 50 list, approximately, like in average, in all markets are by local authors. In Poland, it's Polish authors, in Turkey, it's Turkish authors, and so on. This is just to show you how local this market is. We all, of course, have this breakthrough literature that we call airport literature, like J.K.
Rowling's Harry Potter or Millennium books. Those are, of course, some books that are continuously on these top lists as well. Being strong locally not only creates an amazing customer offering, it also creates a barrier to entry for our competitors, and it also puts us in a very interesting position in a publishing world. When we have this set up with very strong local knowledge around each market, then we are super interesting for collaborations with bigger rights holders or bigger IPs that we can work with globally. We, I would say, have a super unique set up in this that maybe no other publisher have in the world. To sum this up from me, from publishing, this is the final number. 93% of our audiobooks in each local language have been fully listened to at least once during 2019.
This is not about this little top list part of the book industry. This is the broad catalog really gaining and finding its customer. We are well prepared for that. Thank you. I will leave stage now and hand it over to the person that you've been waiting for, the glorious Chief Financial Officer, Sofie Zettergren.
Thank you so much, Rickard. Hi, everyone. Nice to see so many people here at our first Capital Markets Day, which will also be my last live performance before going on parental leave. In the beginning of the day, you heard Jonas talk about the total addressable market and the potential we see for Storytel. You had Ingrid walk you through how we will win the customer on each market that we are on, and also future market, talking about our expansion activities. Stefan talked about how we continuously enhance the user experience to drive engagement and increase customer lifetime. Finally, Rickard described how we leverage from producing our own content. I will now go through how these strategies affects our financial performance. I will start by giving you a historical review of our financial performance before moving into unit economics and value creation.
Finally, I will end with financial targets, which we already released actually last night. Perhaps you already seen it, but I'm sure you're eager to hear more about those. First, let's start with a historical review. Storytel is an exceptional growth company. We have proven that our business model is profitable, yet scalable. Back in 2010 and until 2016, Storytel were making profits. We wanted to prove that we had a sustainable business model before accelerating our international expansion. As you can see from this country slide, Storytel is not a Swedish or a Nordic company anymore. We're a global company. This is probably the fourth country slide you've seen, but we're very proud of that. Present in three continents and 20 markets. We are now profitable on five of these markets: in Sweden, in Norway, Denmark, Iceland, and most recently, also in the Netherlands.
We are sure that we will get more countries or all countries into the profitable states. Ingrid talked about some key activities and measures when launching in a new market, and also that it can take a little time to reach profitability. For us, it has taken us between six months to five years to reach profitability in these markets. Some contributing factors are the size of the market, the matureness of the market, competitive landscape, pricings, et cetera. This slide shows you three things. First, that the countries we launched in before 2015 are now profitable. Second, the markets we launched in 2016 and also Russia in 2017, will be the next markets to reach profitability. We believe that this will be done in 2020 or in 2021.
We have launched in a lot of markets during the last two years. These will be profitable in a few years. If we look at the Nordic markets, add the markets where we have more than 50,000 paying subscribers, which comprises of the Netherlands, Russia, Poland, and Turkey, what you can see here is that we have gone from a negative EBITDA margin in Q2 2018 to a positive EBITDA margin of 8% in Q3 2019. This shows that we are continuously improving our profitability level, not only in the Nordic markets, but also in the markets outside of the Nordic region. In 2015, we had 150,000 paying subscribers. We have grown that number to 1.1 million paying subscribers at the end of 2019.
At the same time, we have grown our streaming revenues from an average of SEK 75 million per quarter in 2015 to an average of SEK 350 million per quarter in 2019, or a total of SEK 1.4 billion in streaming revenues in 2019. We expect that figure to go up to SEK 2 billion now in 2020. Going to our gross profit profile or our gross margin profile, we have four cost items affecting the gross margin. We have payment fees, we have content cost to third-party publishers, production cost, of course, and royalties. The largest cost item of these is the content cost to the third-party publishers. As Ingrid talked about, our business model is an unlimited subscription where you can consume as much as you want as a customer.
This is a model that is enabled through a revenue share model that we have with the publishers that Jonas sort of invented back in 2006 before there were any streaming services at the market. This is a very important prerequisite for us to maintain a sustainable business model going forward, both for the publishers, for the author, and for Storytel as a company to be able to continue to set stories free and to pay the creators for those stories. If we look then at the development of the streaming gross profit and gross margin, what you can see here is that we have quite a stable gross margin at between 40%- 45%, while at the same time we are growing the gross profit.
You can see that we increased the gross profit in Q3 2019 due to the VAT reductions that we saw in many of the EU countries. One of our largest cost item affecting the gross margin is our production cost that Rickard talked about. I often get the question, what would happen if we didn't produce any books? How would that affect our margins? Well, if we stop producing any books, if we hadn't produced any books during this time period, it would look like this. The dotted orange line would be the adjusted gross margin, and it would jump upwards a few percentage points because we take the cost of producing our books immediately as they occur. We do not capitalize them today, and write them off during the lifetime of that book.
This is without taking into consideration that if we didn't produce any books, our in-house share of consumption would eventually go down, which would have a negative effect on our gross margin. I will come back to the capitalization of the audiobooks, and that's something we also released yesterday in the press release, that we will change the accounting principle during 2020. Looking at this slide, you might wonder, why are we producing books? Because it looks better if we don't do it. To summarize it in one sentence, we are prioritizing long-term gains before short-term losses. We're taking losses today because we know that producing the content will generate value over time.
With the current accounting standard that we're using, since we're taking the cost directly today, it means that when we launch in a market, we have a negative gross profit because we don't have any subscribers. We need to build that from day one. We're taking costs. As the customer starts to join the service and the streaming revenues increases, the gross profit also increases to somewhere meet the gross profit we would have if we didn't produce any books. More importantly, as you can see here from the orange columns, it will eventually surpass, and we will create longer term profits with the content production. We are building a catalog which consists of a lot of value. As Jonas said in the beginning, we have a lot of backlist titles. The titles in our service has a long life length.
Going to our two segments, starting with the Nordic markets, we have a comparably high ARPU in the Nordic region of SEK 150 . You can also see here the jump in Q3 2019, when the VAT was reduced in Sweden, in Norway and in Finland. You can also see that we have a contribution margin of around 30%. That's the gross margin, less the marketing costs. We are profitable in the Nordic markets. We are still growing, and we have room to improve profitability. Maybe most importantly, we can use the free cash flows generated at the Nordic markets to invest in the scaling markets outside of the Nordic region. Going then to the non-Nordic markets, this is where we have a huge growth potential.
We're growing with more than 100% on an annual basis. We expect to keep a three-digit growth rates during the next coming years. As you can see today, we're not profitable on a consolidated level in the non-Nordic regions. As you can see, the contribution margin trend is going upward, so in the right direction. If we go further down in the P&L to the EBITDA, you can see that we were making profits in 2015. We were actually improving the profitability in 2016. From then and until today, we have had a negative trend, which is because we have invested in productions and in marketing that will generate value over time. What you can also see here is that we expect to break that trend now in 2020. We expect to improve profitability level.
This is still with the old accounting principles, so not capitalizing any audiobooks in the balance sheet. The reason for that is that more countries are turning profitable or at least shifting more towards profitability. At the same time, we're not adding that many new markets in 2020, so we're focusing on the markets we already have. Perhaps we will launch a few markets. You will see soon. Coming back to the P&L effect of the new accounting principles that we said that we will move towards sometime during 2020. In a quarter in 2020, we will do this. We are not completely done with the analysis yet, but this is an example how 2019 would have looked like if we capitalized the audiobooks in the balance sheet and depreciated over time.
As you can see, the gross profit would increase, the EBITDA would increase, and EBITDA margin would improve by around 6 percentage points. This is the first year when we do this, so it will have the most positive effect the first year, and then we will start to depreciate it over time. This only includes the production cost. When we change the accounting principle, we will capitalize all intangible assets. Also some of the R&D investments that we make that improves the technical platform. Exciting. Going over to my second part, unit economics and value creation. What this shows you in orange is the net present value of the gross profit, and in purple, you see the accumulated gross profit.
For each customer that we get into the service and that stays, on average, it will take us 10 months to recoup the initial cost of acquiring that customer. This slide shows you two things. Number one is that the more customer we grow today, the more losses we will actually make because we are investing in that customer today. Second, the longer the customers stay, the more profitable they will become. This has, of course, great implications as the market matures. Ingrid said that our customers are highly active, consuming more than 30 hours of audio and e-book content every month. As you know by now, engagement increases loyalty, and loyalty increases customer lifetime.
The market where we've been the longest in Sweden, we have a huge base that's been with us for many, many years, and the likelihood of them churning is quite low. So the average subscriber that we already have in the base in Sweden will actually stay for six years. That's a long time, and that, of course, gives us compelling customer lifetime value. Looking at the CLV to CAC ratio, so the customer lifetime value over subscriber acquisition cost in the Nordic region is currently at 3.5. This is, of course, still with improvements to be made, such as making Finland profitable and doing incremental improvements all the time. Looking at the development of the same curve, you can see that it's gone from 2.3 in Q2 2018- 3.5 in Q3 2019.
We're continuously improving this metric, not only, of course, in the Nordic markets, but in all our markets. The way we do this is that we have identified three value drivers, which is improving the gross profit, improving the lifetime of the customer, and bringing in more subscribers at a lower cost. Ingrid already covered how we will get more customers into the service, Stefan talked about how we have a good local product market fit and improve the lifetime of the subscribers. I will elaborate a little bit more on how we can improve the gross profit. The gross profit can be improved by increasing the price. This is something we've done successfully in quite a few markets now. We've done it in Denmark, in Norway, in Holland, most recently now also in Poland and in Mexico.
We can also improve ARPU in other way. For example, the VAT reduction, we couldn't really have any effect that change, but anyway, it has had great implications on our gross profit. We can also introduce new offerings or new products, as Ingrid talked about, to improve the ARPU. We can negotiate better content deals, we can improve the efficiency in our publishing activities, improve our in-house share of consumption, and finally, we can introduce more or other payment alternatives that drives conversion and improves our margin. There are many tools that we can work on to improve this all the time. We already have good gross margins, as you saw from another slide. One of our biggest investments is, of course, the productions or the audiobooks that we produce.
How can we improve, or how can we make sure that we are efficient in our publishing investments? We're looking at the cost side. It's important for us to have a good mix of in-house and out-house production, making sure that we have a good occupancy rates of our in-house studios, that we have used the internal FTEs and external freelancers in a good way, and also that we continuously questioning the production process. How can we be more efficient? For this, we have developed our own tool called Story Tool, where we have basically the whole production process. As Rickard mentioned, we have sort of reduced or removed the studio engineer from the studio, letting the narrator be in charge of the production process. Looking at the revenue side, we can, of course, leverage from us being a global company.
We have many languages in our catalog. One language in one market can be the second spoken language or the third spoken language in another market, which Ingrid was also talking about. As Ingrid said, we have the Arabic content in Sweden. The Turkish content is performing really well in Germany. We also have English Storytel Originals, which we can spread in all our markets or translate some of those into different markets. This is how we can reach economy of scale in our production investments. We haven't talked so much about the print publishing part of our business, and that's, of course, important for us to continue to get good writers or good authors into our service.
Looking at the financials on the print publishing side, we want to at least keep our market share, we want to keep our top line, and we want to have an operating margin of at least 5%. Going to the final part, the financial targets. I will start by just showing you the financial targets that we had for 2019 and see how we performed. We aim to reach 1.1 million paying subscribers, which we reached during the winter holidays a couple of weeks back. We wanted to grow the streaming revenues to end up at SEK 1.4 billion, corresponding to revenue growth of 36%-41%. We reached a 39% growth rate. We haven't reported the Q4 figures yet, but our target is to reach a -16% EBITDA margin. We wanted to reach streaming profitability in at least one additional market.
We reached that now in January in Holland. We wanted to launch in at least three more markets. As Ingrid said, we launched in five. Sorry. Basically, we reached the goals for 2019, which gives us great confidence to also provide you with the 2020 forecast. For 2020, we want to reach 1.5 million paying subscribers, a 36% growth. At the same time, grow our streaming revenues to SEK 2 billion. We want to improve the negative EBITDA margin from -16% in 2019 to between -10% to -12% in 2020. As I said earlier, 2020 is a year of focus, incremental improvements, and taking more markets to profitability. We want to reach streaming profitability in at least two markets to four more markets. We will not stop expanding. Even with this slower pace in 2020, we think we will still launch in one to three markets.
Looking at the longer term, 2023, we think we will improve these metrics, and we want to have a CAGR of 40% on our paying subscriber growth during these years, and a 35% CAGR on streaming revenues. As long as we see maintained or improved gross margins and improved CLTV to CAC ratio, we want to prioritize growth before profitability. We want to reach streaming profitability within five years from a launched market. As I said, we will not stop expanding, but rather see a new wave of expansion during these coming years. Be present in 20 more markets when we are here at the end of 2023. That was it for me.
I hope I helped to give you a greater understanding of how Storytel is creating value day by day, and how we will continue to do that by the expansion activities that you see that we have in front of us. I will now welcome Jonas back on stage to wrap up the Capital Markets Day.
Thank you very much, Sofie.
Thank you.
Brilliant presentation. You can see, I hope, that I'm very proud of my management team. I'm very proud of the rest of the staff as well, who's not here today, or some of them are. We're about 450 people that really love Storytel and loves coming to work every day. I promise. Cool. I'm just going to wrap this up and try to recap some of the things. Thank you so much for staying on with us. Ingrid talked about commercial, Stefan development, Rickard publishing, and Sofie business administration. What are some of the most memorable slides I think we've seen? I think this meaningful recreation is really a cool way of illustrating the fact that our customers, they are really forward-leaning. Meaning you have to focus to consume our content.
You can't just sit back and don't worry about it, but you have to actually be focused, which means that it's a great pleasure. This I think is a really nice insight. We are the cure for boredom. We're the cure for insomnia. We've known that for many years. We're trying to get some factual research behind this, but we haven't done that yet. Personally, I'm convinced that insomnia and books is a really good cure. Loneliness, we actually have some evidence from that from a recent Swedish study. We are making people less lonely. I think one way that we, in a very physical and tangible way, illustrate this is by our new invention of actually being able to see how many customers are listening to this book right now. This updates by the second, by the way.
That's, I think, a good base to start building from when you want to build the social interaction and the social layer onto our service. People listen a lot, 30 hours per month. That's more than some other streaming services. Again, it's forward-leaning, it's focused listening. This is something we're very proud of that we know drives a lot of the loyalty and the positive unit economics in terms of very high customer lifetime values that translates into good value of our business. Helping the customers finding the content is, of course, key. We can see that our own Storytel programming is doing a really good job already now, and we're making tremendous progress all the time, creating new lists that are interesting to customers and expanding our intelligence team and our content creation teams. Rickard talked about the golden triangle of audio stories.
This is really, I think, the core of what we're doing on the story side, to find this perfect match between the story, between the narration, and between the customer. Those can easily come out of sync, but we make sure that they are not, that they are actually optimized and that always the right narrator finds the right story. Sofie talked about the CLTV:SAC and how we work very actively on improving this ratio. As we've proven for the Nordic region, we in a very short period of time brought it up from 2.3- 3.5. It's about improving the gross profit, improving the lifetime of subscribers, and also bringing in more subscribers at lower cost, where Ingrid talked about how we can use virality and word of mouth to a large extent to make that happen. These are all the markets we're in now.
These are the markets we will focus on to make super successful. Ingrid showed you that there's actually a 40 million subscriber opportunity here on the markets we've chosen. Just look at the Swedish example, which has gone from nothing to 5% penetration in only a couple of years. We see clearly the other Nordic region countries, that is happening very fast. We hope to be able to not maybe get to 5% on all the other markets, but at least up to a couple of percent. The sustainable competitive advantages that we create, I think they come to a large extent from the loyal subscriber base that learns how to use our service, learns that this is the way you're supposed to listen to stories. That this translates into a very positive brand that becomes synonymous with storytelling.
We have the perfect name for this business, Storytel. It couldn't be a better name. That really helps us because it works globally. It works in every single market we come into. Storytel has a very good connotation, and we want to make that brand synonymous with storytelling because we know that that drives very positive competitive advantage for us. Our content catalog is hugely important. We build that up in order to be able to get better unit economics, but also in order to be able to present a better service to our customers and also to, over time, to compete very successfully with competing services. We know that we, after 15 years in this industry, have a very strong book industry reputation. We've dug quite deep into the Nordic markets where we also own the publishing houses.
We know that we earn the respect from publishing houses all around the world, and we have constantly people from Storytel presenting on book fairs around the world and spreading the word about Storytel and audiobooks. That is really making a huge impact, improving the likelihood of us of getting the right content once we enter into a new market. Finally, looking internally, we have a lot of know-how. We know exactly what we're doing now. We just need to execute and improve on our working processes so that we become more efficient. We have a very purposeful company culture where I think that people enjoy being at Storytel.
People tend to stay for a long time at Storytel, and this means that we can come to work and do a very productive work every single day, instead of working on company politics, as is the case for some other companies. Let's say that we succeed with all this. What will happen then? Maybe we will be a big part of developing the audiobook market. We've seen that it has improved a lot in recent years. It's grown by 20% for 10 consecutive years now. We're hoping that it will stay at a very high growth rate. We think it will be about 15%, which means the total market opportunity for Storytel will grow from SEK 40 billion- SEK 200 billion. We expect ourselves to have a very strong market share in that growth journey.
We can see that outside of the U.S. today, we already have a global market share of 15%. Including the U.S., it's 55%. I hope that looks interesting for you. I hope you stay on as Storytel supporters, shareholders, whatever you are, and maybe we will all look as happy like this in future when we think about Storytel and what we do. Thank you very much. We're now going to move over to a Q&A session. Thank you. Anyone over there. Yeah, sorry. Just wait. We need the microphones to be handed out. We have one question over there, one over there, and one microphone to him over there as well. Yep. Yes.
I'll start off with two questions. Joachim Gunell from DNB Markets. You've launched in five new markets in the recent 12 months. Perhaps you can elaborate a bit on your learnings from these markets. What has worked better than expected and proven more difficult?
Yeah. I'll ask Ingrid to answer that question.
Thank you. That's Yes. What has worked better and what has worked less good? Well, of course, there's always learnings, and I shared with some of you during the break here that we have a country management meeting, that we do both online as a Hangout and meet in physical form. This is the opportunity where we really help, support, and learn from each other. A few things, of course, don't go as well as we thought. It might be the marketing that has worked super well in one country that doesn't really fit, and what we do that is to localize. Sometimes it's our pricing that Sofie talked about, that we have adjusted over time. We have actually in one market also lowered the price as we realized that we went into a market with a very much premium offer. That's also something we do.
The answer to that question is, again, localization. I think what we do is that when we have a team that is strong, we recruit well, and they can operate on a very local basis with all the things that we offer from a corporate point of view or a group perspective. That's when we do this best.
Good. Next question. Mics. Yep.
Can I go? Okay, yeah.
Okay. Oh, you had a second question.
Yeah, one second question.
I can't count to two even, so.
In what way do you work with partnerships? You mentioned some telco bundle deals here, et cetera. In the non-Nordic countries where you aim to grow going forward, can you perhaps give us any color on the ambition there?
I think that's an Ingrid question as well.
Again. Yes. Telco partnership is actually a really successful way to grow. I wouldn't mention then Sweden, but I do it again. Telia has been a very good partner for us here in the Nordics. We have then tried this in other countries. Vodafone is a good partner for us, for example, in the Turkish region. This is something that is very similar in terms of that you have your subscription model. Many of the telcos are looking at extra services to enhance their brand, and we're a very excellent partner, so it's a good fit. Of course, also marketing partners in other types of forms. It could be anything from strong consumer brands. We've been approached by other consumption brands, as well as other streaming services in different countries, to test out actually bundling our service.
Perhaps just to add on what Ingrid says is what we aim to do when we do telco deals, at least, is that we will not give it away for free, but the customer will actually perhaps get a good offer in the beginning, and then they will pay the subscription through their mobile carrier. This is the way we have done it in Telia. We will not give away 12 months for free, for example, to a telco deal. We want to get paid for the service.
Yeah. Adding to that can actually also be a good payment solution for us. Actually, the telcos we have bundled with in Poland, that was a way for us to access when we didn't have a localized payment method. We have done that through Mobiltek, which is the central organization between the telcos.
Competitors like Spotify are investing in podcasting, and podcasting is becoming more scripted. How will you deal with that kind of competition as podcasts look more and more like audiobooks?
You want to answer, Rickard?
Sure. Of course, stories are merging all the time. As I said from the beginning, licensed books is always going to be our bread and butter. What we're doing with Originals is also trying out new formats. We're also doing that kind of in between, since the format of the original 10 episodes in an hour each is quite similar to the podcast format. When we're doing a true crime, we could call it a podcast, or we could call it Storytel Originals. It's more a matter of labeling. We're working with the stories, and we're also looking into, of course, how we work with that on a distribution level. From a publishing perspective, of course, this merges all the time, and we catch up things from others, and others catch up things from us.
Thank you.
You're referring to the fact that Penguin Random House seems to have subtracted books from streaming services? No, not other than it's a small part of our catalog, a small part of the consumption, and it's now been kind of hidden from the customers. Luckily, we have tens of thousands of new audiobooks in English coming in that can recoup that loss. I think it's going to be a long term. They're taking that stand now, obviously, and then we'll see how that evolves over time. We don't know much more than that, really.
Derek.
Yeah, Derek Laliberté here from ABG Sundal Collier. You've posted very strong and stable growth here over the last years, and especially this year as well. Now you come with these very ambitious growth targets for the coming years as well. I was wondering if you could comment on which markets you expect will contribute the most, like in the absolute number of subscribers here this year, and also how ARPU you expect the revenue per user to develop. I would almost suspect that the difference between subscriber growth and streaming revenue growth would be bigger, given that the non-Nordic countries might grow faster.
Yeah. Let's see. Many questions in one here. As you know, the Nordic segment stands for quite a large portion of our total base and total revenues today, around 80%. What we expect going forward is, of course, that the non-Nordic segment will increase as a share of the total, both base and subscriber revenues. Looking at the different markets, the markets where we have 50,000 paying subscribers, which now is in Holland, in Poland, in Russia, and in Turkey, we expect those markets to contribute a lot during the next coming years as we expect three-digit growth rates. Also, one country that we mentioned earlier is Mexico, that are performing really well. The Latin America region, I think looks very promising, and other streaming services such as Netflix and Spotify are performing really well also in this region.
Your final question about the ARPU. It's of course a little bit tricky to give you a 2020 forecast. What you have seen is that we have been able to increase price in many markets. We just increased it now in Poland and in Mexico from January 1st, I think you can expect more price increases to be done. The VAT will go down in some more markets during this year. We still see that the Nordic region is growing, and we have a very high ARPU in the Nordic region. We will see. We have the family subscription, which can, of course, in the reported figures, it could drive down the ARPU since more customer shares it.
Internally, we see it more in the opposite way, because usually customers have shared the account before, and now they pay an extra premium to be more subscribers.
The leading metrics for us is, of course, the revenue growth, which, the 35%. As you allude to, the subscriber growth could be outcome of that. If we were, for instance, to drop prices and get millions of subscribers in India, then obviously things would go out of sync a bit between the subscriber growth and the revenue growth. The revenue growth is our leading target.
Yeah.
Jan Wallberg, EQT. Question on content. When you move into new markets now, has it become easier to generate new content, to skew new content, or is it tougher because maybe the publishers are learning that, okay, it's Storytel, when they come in, they become huge, so maybe we can take more for our content now, or how has that developed?
Stefan used to be the head of expansion at Storytel.
Well, it's both, actually. Depends a little bit on what kind of market. So far, they don't want to take the investment initially. We are taking actually the investment, and we built up a local strong catalog. After some years, when they found out that they can earn a lot of money from this, they normally transform the production that we are doing onto themself. We are starting the market, and later on, publisher is coming on board. We are initially all this.
How about content in existing market? The Penguin content was mentioned. You also had the negotiation with Bonnier earlier this year. How do you think that will be in the future? Will it be tougher, or are all publishers learning more about how this new model is working?
It is, of course, always a bit turbulent when a new model comes into play like we've done now. In Sweden, we kind of had a knot that we had to untie together by really good dialogue to come up with a solution that we could look into the future and say, "Now let's join each other and develop the Swedish audiobook market." That's a special case. If you look in the rest of the world, the problem for us is more that you have publishers around the world that don't have any income from audiobooks yet. They don't see the light. They don't see what it could be.
We have to kind of, as Stefan said, educate them about and get them interested in making that first investment in an audiobook production, and then see money coming back from us as our subscriber base grows, and then keeping investing and investing. Sometimes it's a lonely work, and we have to do it on our own in the beginning.
Last one on new markets. You have avoided some markets like U.K., U.S., and where there's more competition, but you have entered Netherlands and Germany. Do you want to enter markets where there's more competition now, or are you trying to stay where you're more of a monopoly in the future?
I think that over time, market share and profitability levels, they kind of converge. I think that over time, it's a lot easier for us to spend the money early in a new market, build that up as we've done with many of the markets we're in now, and then over time, become a very strong market leader that understands the local market fully, understood really the local product market fit and how you drive the best value for the customers that makes them listen more, et cetera. Also come in and become a very strong content producer. We like the position we have now in the Nordic region, Sweden, Denmark, and Finland, where we are also part of the book publishing ecosystem.
That makes us better at gauging developments like the one with Bonnier now, and to understand what's in the head of a book publisher in that particular market, and how can we best play in order to optimize our future.
I'm mic otherwise here already. My name is, by the way, Jan Pettersson from Tellus Fonder and a happy shareholder. You mentioned that 2020 will be more a year of a kind of consolidation and adding one to three markets. In 2023, you will add 20 markets+ . That means quite a hefty acceleration after 2020. Could you be a little bit more specific about that, what your strategy will be and how you will reach it?
Should I?
Yeah, please.
I think what we mentioned by 2023, it's until 2023 we will reach 20 markets+. It's not that we will launch all of those in 2023, just to clarify. I think you have to, one, I will give you a cue, and that's understanding what languages we already have in our service. You can think about where we will continue to expand. I think what we have done is really to build up a local catalog on 24 different languages that we can continuously work with and expand from.
I think.
If you take Latin America and Mexico, that type of content, there's a lot of markets there that could be added quite easily, like we did with Colombia.
Yeah. As Ingrid, the last two years, we have been focusing very much on improving also the internal processes and setting up these regional hub structures. Now we have a hub, a LATAM hub, driven from the Stockholm office and the Mexico office, and we have a APAC hub driven from the Swedish and the Thailand office. We have a good structure now to continue the expansion into these different regions.
I don't know if it got through what Stefan said. Basically, there's a lot of innovation happening now on our user service, and that hasn't really happened for a couple of years as much because we've been preoccupied with going out into these 20 markets. All the global teams in Stockholm and Copenhagen have been focused on making those launches and getting that early product market fit. We haven't, to the same extent, been able to really focus our development efforts and get an improved service into the hands of the customers. That's happening fast now, so it's incredibly encouraging.
We just want to pause with the 40% growth this year and not launch a lot of markets and make sure that we trim in all these work processes also in publishing to make us even more efficient and in marketing with the viral effect and the word of mouth and all that. Just give ourselves a little leeway to prepare for a much bigger evolution globally from 2021 and onwards.
Okay. Stefan Wård from Pareto. I have a couple of questions. One is to Stefan, I guess. It's regarding the new payment platform. If you can put that in perspective in terms of time of launch, if you compare it to maybe mid-2019. Then you also spoke a little bit about the new actors that you have integrated into, if you could just give some clarity on that. Thanks. What was the last question?
New sort of operators that you work with. You said that over the past few weeks, you have integrated into a few new.
This new payment platform, actually, we will launch that in the end of last year. This new platform makes it much more easy and faster to integrate to different local payment partners. Actually, they can do it themselves into us, and we don't need to do it. Normally, for instance, a mobile operator, they have external consultant companies that integrate to different platforms. Our purpose with this is to offload our own development department with this, so anybody can integrate into our payment system and also to the marketing platform when we do partnership like Norwegian and SAS and things like that. It's a combination of what we're doing. We have launched three new partners with the new platform, that's actually Yandex and KCP in Korea and Sofort, Klarna in Germany.
We will continue developing this platform as well, but it's a really great start with this. Yeah.
Thank you. Next question is regarding the growth rate in the international business. You mentioned, Sofie, that you expected a three-figure growth rate for outside the Nordics, I interpreted. Is that per annum up until including 2023?
Yes, I would say so, in at least some of the markets. Looking at 2019, I think we grew with around 120% on an annual basis in these markets. In order to reach the goals going forward, we will need to continue to have a three-digit growth rates, at least during the next couple of years.
Okay. Let's leave it at that. Also on the EBITDA margin, historically, you've spoken about the range of 15%-25%, I believe it is.
Is that still valid, or can you narrow it down a little bit?
Looking at the profitability level in our Nordic markets and the non-Nordic way, we have communicated earlier that we expect to have an EBITDA margin of between 15%-25% in these markets. As you saw from my presentation, we have a higher ARPU in the Nordic segment, so you can expect those markets to reach the 25% targets, while the other markets is maybe more towards the 15%. Since we haven't reached profitability yet, or actually in Netherlands now. I think that the EBITDA margin will depend on the ARPU level that we have. Even though we have the same gross margin in all our markets, basically, the marketing as a percent of sale and also, of course, the staff cost as a percent of sale will be slightly higher in the markets with a lower ARPU.
Thank you.
Marcus Rylander, Swedbank Robur here. Also very happy shareholder.
Marcus Rylander .
Marcus. We're a very happy shareholder also and agree that growth is more important than profitability right now. Can you please comment a bit on the cash flow and the financing? Which has not been dealt with a lot for you, I think.
Yeah. We did a share issue almost 1.5 year ago now of SEK 500 million. That was the third time, or actually the fourth time, when we have done a share issue. We also refinanced our bank loans during the fall. You can see on an overall level, we have cash at the bank to handle our near-term expansion. As you heard from my presentation, as you also brought up, if we see a very good CLV:CAC and the other metrics looks good, we want to prioritize growth over profitability. What that means in terms of taking in more money or finding other financing solution, I can't really comment on that right now. We are turning more markets to profitability, and we can use those cash flows to expand into more markets.
Do you expect to use the credit facility just renegotiated to help you?
If we expect to use the credit facility? Yeah, if we need to use that credit facility, we will do that to handle the growth. That's one of the reasons why we refinanced our loaning facility, is that our house bank also believes in our growth strategies and that they want to support us to continue to grow. That could, of course, be both organically or through acquisitions. We don't have any big acquisitions to announce today, but as you saw from Jonas' presentation, that's one way for us to grow into new markets.
Yes. Oscar Erixon from Carnegie. Few questions from me. First of all, can you discuss the younger markets in your portfolio a bit? What markets that are not expected to be profitable this year, what markets are you seeing the best trends in and could see the quickest road to profitability?
I think, once again, the markets which I mentioned, which was Turkey, Russia, and Poland, are three markets that we expect to reach profitability next, either in 2020 or in 2021. As you saw from my presentation also, it takes a few years to reach profitability, and we expect the markets where we launched in a few years ago to reach profitability within the five-year terms. I think two exceptions for that is India and UAE. India, we've already been in over a couple of years, and we have been focusing on producing content to get a good competitive advantage against other players. It's this year we will start to market the service, basically, because we are integrating with a new payment provider that will help us to drive conversion. UAE, it's not one country. That's a lot of different countries.
We are using the Arabic content that we have in other markets rather than marketing us a lot in the UAE region at the moment.
Plan A is always to succeed as Storytel with the streaming service and get a lot of subscribers. Since we go in and produce all this content and we know that Did you see there was snowballs in my pictures before? Yeah. Those snowballs will grow over time and become bigger. It means the global market will become bigger, and with the content catalog, it's always going to be a good business for you to have that content catalog, because that will sell a lot over time, inside Storytel's service or outside.
Great. You mentioned using LATAM and APAC, the hubs in Thailand and in Mexico. Colombia is one launch like that where you don't have a physical team in the country. Do you expect more of those cheaper launches ahead?
I think we constantly, as we do, challenge our own assumptions and our own way of doing things. Especially for a LATAM region where we already have the content to actually go into more markets, we can see that this could be also a light approach to expansion. However, we will always ensure that it's a local service, and I think this is very important because there are some differences to the different countries in the LATAM region as well. Its dialects, as well as celebrations of different activities throughout the year. That we need to be close to think about when it comes to both content curation and, of course, marketing. Yes, we will probably find and invent new ways of expansion over the years to come.
I think what we've done now over the last three years of massive expansion is to really, really learn a lot, and that we share and internally steal with pride between one another. What we now have is these five regional hubs managed by a hub master, together with the country managers, who can really set the goals for each of the regions that we are in.
Perfect. A final question from me for Sofie here. Print publishing, just to clarify, does the old target, it doesn't stand anymore, it's stable sales and 5% margins. Is that the new unofficial target?
The prior target was also stable top line, but a slightly higher operating margin. What we can see is that the physical sale is, of course, declining. It takes a little longer to recoup the investments that the print publishers are doing. They will need more years because the digital version of the book will be a larger part of the total to recoup the initial advance. We have Norstedts in Sweden, where we have made really strong profits during the last couple of years since we bought them in 2016. I think we can expect them to continue to deliver a good result. In Denmark, we have had slightly lower margins. That's one reason why the targets are a little bit more conservative, so to say. We have done a lot of changes in the Danish office.
We have a new Chief Executive Officer, Tine Smedegaard, who is a really good leader, and we expect to be able to improve the profits going forward. We have Gummerus now also in Finland, which we just acquired, but they also have a positive operating margin.
Great. Thank you very much.
Okay. Joachim Gunell from DNB again. Jonas, you showed a picture for the, say, 2030 market potential, which implied some quite steep market share gains for our Storytel. Could you please elaborate a bit on what are the assumptions for such market share gains in, say, 10-year perspective?
The assumption is that most of the growth will come from outside of the U.S., and the Nordic region for that matter. In the U.S., we're not present, as you know. Since it will come from outside the U.S., we already have a 15% market share outside of the U.S. The assumption of us getting to 20% market share on all this new growth in all these markets, I think is not super aggressive. I think it will come from us basically knowing pretty well what we're doing now and understanding the audiobook market as such. In our approach to every single market, we know that we do a good job in finding this fit with the local customer and just know when to accelerate, know when to produce our own content.
With our platform that works, I think, very well across the world now with these new payment integrations, we can be a lot quicker in future than we have been in the past in rolling out the service and driving up the growth.
Finally, on the competitive environment, you seem to be in a global two-horse race with Audible. From such a global perspective, we are seeing some other larger technology companies moving their positions forward into audiobooks. Any comments on the competitive landscape there and any changes?
I think fundamentally what's so great is that the user interest is there and is growing a lot, which means that we don't have to anticipate 100% market share. We can anticipate to be one of the players who really understands this market niche. I think none of the global players are really focused, except for Audible, which is Amazon-owned. It's really focused on this forward-leaning consumer that listens to stories that often takes years to develop. I think it's a very different consumer experience from music or radio. With podcasts, you're getting into the same type of user experience when you talk about story-based podcast and true crimes. Other than that, I think just focusing on what we do and do best, I think will help us to get a lot of growth in future.
There will be other players who will benefit from the fastly growing audiobook market. I think that's fine.
Thank you.
Derek Laliberté at ABG Sundal Collier here again. I see that growth really seems to have picked up in Russia, at least with now about 50,000 subscribers. What's driven this mainly, and how crucial has this payment Yandex agreement helped?
We usually don't really comment on specific countries. Just to be clear, Yandex is something that we very recently introduced. I would say that's a combination of a great local team. We saw that Rickard talked about the fantastic opportunity we had with Dmitry Glukhovsky and launching an original series in a country where he is very well known, taking a very forward-leaning position as a brand. That was really well-recognized. That really fueled the growth during 2019. Will continue to do so. I think we do selective those type of investments in many of the countries that we are in. Sometimes it takes a little bit longer to reap the benefits. Sometimes they are reaped quite fast, as in Russia.
Final question, and then lunch. Nobody wants to ask the final question.
Nobody wants to be between.
This 30-hour user engagement, how has that developed over time, the 30 hours per month?
It's developing country by country. It's a lot higher actually in some of our biggest markets and a lot lower also in some of the markets. It's really a country-by-country development. It all then becomes dependent on the mix of countries that we have. As a whole, I would say when we were in early days in Sweden and Denmark, it was in the 20s somewhere, low 20s. I think now it's on an average moved itself up to 30 hours, and now it's pretty stable there actually, since we're adding a lot of new markets that are more immature and where people listen a little less. Good. Thank you so much for spending the time with us. I would just like to say thank you to my amazing management team.
I would also like to say thank you to Don and his PR team, to Ida for taking care of the presentation with Josephine sitting in Copenhagen working late nights. Thank you to Biografen Sture for organizing this for us, and also to Charlotte Bonde, who's helped us out where we are. I think that's all of you. Thank you all for coming here. Grab some lunch outside. We will be available for discussions and more questions outside. Thank you.
Thank you.