Nordic streaming company Viaplay has reported a solid start to 2024, becoming the latest European broadcaster to indicate signs of recovery in the TV ad market. The company’s sales climbed 6 percent YoY during Q1, matching the quarterly growth rates of both MFE and ProSiebenSat.1.
The recent run of results suggests signs of life for TV ad sales, following a difficult year for European broadcasters. And for Viaplay it was tougher than most, forcing the company to reverse its international rollout and exit several markets, including the UK, Poland and the Baltics.
But the strategy of focusing on its key markets, namely the Nordics and the Netherlands, appears to have put Viaplay back on the road to recovery. Following a recapitalisation programme, which it called “an important step” in returning to profitability, the company said it was on track to meet its full-year targets.
Yet there remain challenges ahead for the Nordic business. The company upped its subscription prices which caused customer churn, and estimates that one-third of premium subscribers are sharing their passwords. Viaplay said it has already begun restricting concurrent streams for live events, and plans to implement further limitations on account sharing.
Changing lanes
One of the lessons Viaplay appears to have learned from 2023 is the stress of going it alone. The new strategy seeks to find more ways to monetise its existing content slate, and especially its sports rights, via partnerships with other TV companies. This includes sublicencing sports content to Talpa TV in the Netherlands, under a partnership that sees Talpa’s SBS9 linear TV channel rebranded as Viaplay TV.
Meanwhile the company has sold its UK sports business back to its original owner, Premier Sports, and also launched its streaming service on Amazon Prime Video Channels, aiming to grow its reach while alleviating the costs of running its own standalone service in multiple markets.
“The reality is that our content costs have risen faster than our revenues over the past few years, due to competition, underlying inflation and ongoing adverse FX movements,” said Viaplay CEO Jørgen Madsen Lindemann. “We cannot expect our direct customers and distribution partners to carry these cost increases 100 percent alone, which is why we have sublicensed selected sports and non-sports content to other broadcasters and streamers.”
Alongside these partnerships, Viaplay is planning its own products to extract further value from its sports content, with plans to launch a new sports news channel “in most of our markets”, as well as an ad-supported tier for its streaming service this summer.
“We do expect Viaplay subscription sales to return to growth once we feel the full effect of the price increases and launch the new product offerings, and as we work to reduce account sharing and improve the terms of our partnership agreements,” added Lindemann. “These actions will also boost our linear channel sales. We have continued to build our digital advertising inventory, which helped offset some of the effects of the continued decline in the linear TV advertising markets, and the launch of the new HVOD tier should further support this transition.”
