Viaplay, a Nordic streaming company, has become the most recent European broadcaster to report evidence of recovery in the TV advertising market with a positive start to 2024.
Q1 sales increased by 6 percent year-over-year, which was comparable to the quarterly expansion rates observed for ProSiebenSat.1 and MFE.
The recent performance indicates potential recovery in television advertising revenue, which has been challenging for European broadcasters in recent times. In particular, it was exceedingly difficult for Viaplay, which was compelled to withdraw from several markets, including the United Kingdom, Poland, and the Baltics, and retrace its international expansion.
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The approach of concentrating on its most important markets, specifically the Nordic countries and the Netherlands, seems to have redirected Viaplay towards a path of recuperation. The company reported it was on schedule to meet its full-year objectives after a recapitalization program, which it described as “a crucial step” in regaining profitability.
However, obstacles continue to confront the Nordic business sector. Customer churn was caused by the company’s subscription price increase, and one-third of premium subscribers are reportedly sharing their credentials. Viaplay stated that it has initiated restrictions on concurrent broadcasts for live events and has additional restrictions on account sharing in the works.
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Alternating paths
It would appear that Viaplay has learned from 2023 the difficulty of tackling it alone. The new strategy aims to increase the number of ways in which the company can monetize its existing content library, and sports rights in particular, through partnerships with other TV companies. This entails the provision of sports content through a license to Talpa TV in the Netherlands, as part of a collaborative effort in which Talpa’s SBS9 linear TV channel is rebranded as Viaplay TV.
The organization has since launched its streaming service on Amazon Prime Video Channels and sold its UK sports business back to its original owner, Premier Sports, in an effort to expand its reach and reduce the expenses associated with operating a standalone service in multiple markets.
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CEO of Viaplay Jørgen Madsen Lindemann stated, “In recent years, our content costs have increased at a faster rate than our revenues. This is due to competition, underlying inflation, and ongoing adverse FX movements.” “In order to mitigate the financial burden on our direct customers and distribution partners, we have sublicensed specific sports and non-sports content to other broadcasters and streamers in lieu of 100% coverage of these cost increases.”
With the intention of enhancing the value of its sports content through the introduction of its own products, Viaplay is developing an ad-supported tier for its streaming service and a new sports news channel “in most of our markets” this summer.
Lindemann added, “We do anticipate a resumption of growth in Viaplay subscription sales once the full impact of the price increases is felt, the new product offerings are introduced, and efforts are made to reduce account sharing and improve the terms of our partnership agreements.” “These measures will also increase sales through our linear channel.” The ongoing expansion of our digital advertising portfolio has mitigated a portion of the impact of the ongoing decline in the linear TV advertising sector. The introduction of the new HVOD tier is expected to provide additional assistance in this ongoing transition.
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