Around the world, Sweden has become famous for many things: IKEA, excellent meatballs, safe cars, crime fiction, and, more recently, the inspiring teen climate activist Greta Thunberg. You can add another thing to the list: the digital audiobook subscription market, where the pioneering Swedish company Storytel has shown a Viking-like ambition to span the globe with its all-you-can-listen-to monthly audiobook subscriptions.

By any measure, the model has caught on with consumers. According to a recent report co-published by the Swedish Publishers Association and the Swedish Booksellers Association, subscription platform sales in Sweden jumped to 19.8% in the first half of this year, up from 15.8% of publisher sales in 2018, with only 6.9% of those sales representing e-books. And the Swedish book trade magazine Svensk Bokhandel estimates that as much as 30% of publishers’ revenues will come from digital subscription platforms by next year—with digital audio leading the way.

Storytel is not alone in the market, of course—the Bonnier Group’s Bookbeat, Akademibokhandel Group’s Bokus Play, and Nextory are also competing in the Swedish subscription market. But Storytel is by far the market leader in Sweden, with an estimated 77% market share in 2018. And Storytel is the most global of the services, now doing business in 18 territories, including recent launches in Germany and Brazil.

How has the arrival of the digital-subscription model impacted Swedish publishers? In its latest report, the Swedish Publishers Association said that the overall book market grew a healthy 5.1% in terms of units over the first six months of 2018, with 24.3 million copies sold individually and via digital subscription. But in terms of revenue, the market decreased slightly, about 0.4%, to SEK 1.96 billion ($200 million), with stark differences among the various channels. For example, bricks-and-mortar bookstores, supermarkets, and online retailers reported that print book sales fell 7.6% in terms of units and 5.2% in terms of revenues. Meanwhile, digital subscription grew a robust 25.7% in units and 25.3% in revenue.

The most obvious conclusion one might draw from those numbers: digital subscription platforms are cannibalizing publishers’ book sales. But is that the reality? Not necessarily, says Swedish economist and researcher Erik Wikberg, author of a just-published study on the digital audio market.

“We should not automatically think of this as a cause and effect,” Wikberg says. “Printed book sales were in decline before the rapid growth of the subscription platforms. There is more than one factor at play here. We must not forget that many audiobook listeners also read printed books. Yet, we also shouldn’t rule out that subscription platforms could be a substitution rather than a complement to printed books in the future.”

Wikberg believes it is a little too soon to draw conclusions about the overall impact of digital audio subscriptions on the book market as a whole. “This is still a very new consumer behavior,” he cautions.

Patrik Övreby, purchasing director of Akademisbokhandeln, Sweden’s largest bookstore chain, agrees.

“As we all know, the numbers can vary quite a lot from year to year, depending on the titles published,” Övebry says, adding that his company has actually turned in a decent performance so far this year. “During the first half of the year, contrary to the rest of the market, our group increased sales of physical books and gained substantial market share,” he points out. That, of course, doesn’t mean cannibalization isn’t happening. But it is a reminder, as Wikberg suggests, that the question isn’t a simple one.

Meanwhile, another question comes to mind: why has Sweden been the country to develop such a robust, flourishing audiobook subscription market? Storytel, it turns out, has a lot to do with it.

“It is fair to say that Storytel is the single actor that has most changed the Swedish book market in the last few decades,” Wikberg says. But, he adds, that change didn’t happen overnight. “They had rough years in the beginning, and showed a lot of persistence,” Wikberg says. “Storytel was ahead of their time. But the penetration of smart phones and the growth of subscription models for TV, film, and music played a crucial role in the company’s success.”

What can the rest of the world learn from the Swedish experience with digital audio subscriptions? First and foremost, while they are popular with consumers and showing rapid growth, there are questions about sustainability.

It is fair to say that Storytel is the single actor that has most changed the Swedish book market in the last few decades.

“First, none of the subscription services are really profitable, and they strategically prioritize growth before profitability. It is very capital-intensive. And we still don’t know how profitable, if at all, this market will be,” Wikberg says. “And, the compensation model for publishers is a very delicate matter. There is a big debate over whether subscription platforms should have a revenue-share model or instead pay fixed compensations on each consumed item.”

All of which means there is risk attached to embracing these new platforms and models. Wikberg, however, suggests that Swedish publishers should primarily be concerned with a more urgent matter, as more and more digital content now competes for a consumer’s attention.

“If I had a choice, I would primarily focus on the threats related to how media consumption might move from books to other products,” Wikberg says. “The share of Swedish 18-year-olds who read every day has dropped from 27% to 11% in just six years, and they are instead consuming other kinds of digital media. This is my biggest worry right now. Not just for players in the book market, but for our society as whole.”

Looked at in that light, whatever challenges the digital audio subscription business presents to the existing book market, these platforms might still be more of a solution than a problem. After all, as Wikberg points out, sounding a hopeful note, the data show that digital audiobooks are expanding the audience for publishers.

“In volume, people are consuming more books than ever,” Wikberg says, even if they are choosing to listen to them, rather than read them. “That indicates that there is still an underlying demand and strong interest in literature.”

Carlo Carrenho is the founder of PublishNews in Brazil and Spain and works in business development at Word Audio International in Sweden.