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Viaplay to expand to more markets

September 22, 2021 07.29 Europe/London By Chris Dziadul

Nordic Entertainment Group (NENT Group) will launch its Viaplay streaming service in five new markets by the end of 2023.

The service will debut in the UK in the second half of next year and then in Canada, Germany, Austria and Switzerland during 2023. It will then be present in a total of 16 countries, compared with the original target of 15 announced in November 2020. NENT Group has also increased its target for the total number of Viaplay subscribers by the end of 2025 from approximately 10.5 million to approximately 12 million, of which approximately 6 million are now expected to come from international markets, compared with the original target of approximately 4.5 million.

At launch, Viaplay’s offering in the five new markets will comprise Nordic, local and international series, films, documentaries and kids content, both original and acquired. NENT Group may also add selected sports rights to the Viaplay offering in future for some of the new European territories. Viaplay will be available in the new markets on a direct-to-consumer basis, as well as through partnerships with local distributors.

NENT Group notes that Viaplay’s accelerated expansion, in combination with successful recent launches in Estonia, Latvia, Lithuania and Poland, and upcoming launches in the US and the Netherlands, is now expected to contribute to compound annual organic sales growth in 2020-2025 in the upper end of the previously provided target range of approximately 18-20%. Furthermore, the ongoing positive development of its Nordic operations is now expected to result in compound annual organic sales growth in 2020-2025 in the upper end of the previously provided target range of approximately 13-15%, with Viaplay growing at a compound annual rate of approximately 23-25% in the Nordic region over the same period.

NENT Group also says that its Nordic operations are expected to have a significantly higher EBIT margin of approximately 15% in 2025, and a long term 20% margin potential. NENT Group’s accelerated investments in new market launches, premium sports rights and original content have increased both the revenue and subscriber growth potential, as well as the cost base, for the international operations. These businesses are still expected to make a positive EBIT contribution in 2025 and are now also expected to have an EBIT margin of approximately 15% in 2026, with a long term 25% margin potential. Total accumulated losses to breakeven for the international operations are expected to be approximately SEK3.8 billion (€373.4 million) and the group’s expansion is fully funded following the SEK 4.35 billion equity raise in February 2021.

Commenting on the expansion plans, Anders Jensen, NENT Group president & CEO, said: “We have stepped up the pace and scale of Viaplay’s international expansion. We have acquired virtually all of the international sports rights that we targeted and for multiple cycles in several cases; added one more market to our roll-out ambition; signed innovative partnership agreements; and raised the bar when it comes to our investments in original content. As a result, we are increasing our subscriber and revenue growth targets, as well as our target profitability levels. We are investing more short term to create even higher long term returns due to the considerable operating leverage that this creates. We are investing in this growth right now, in order to capitalise on the opportunity created as the shift to streaming video consumption continues to accelerate, and demand for high quality and locally relevant stories increases.

“Viaplay is a proven success story, with a unique content offering and one of the world’s most flexible and scalable technology platforms. Viaplay is already our largest revenue generator and will already account for more than half of the Group’s revenues in a couple of years’ time. We aim to be the most diverse and inclusive storyteller with our amazing range of original, acquired, local and live content that offers something special for everyone. And we take an open approach to partnering that ensures Viaplay is available as broadly as possible. This is a unique value creation story”.

Looking specifically at the five new markets Viaplay will be entering, NENT Group says that Germany’s SVOD penetration amongst its 42 million households is expected to grow to over 50% in 2025, with more than two SVOD subscriptions per SVOD household. Meanwhile, 77% of the UK’s 28 million households have SVOD subscriptions, and the number of subscriptions per SVOD household is also expected to grow to over two in the coming years. At the same time, 80% of Canada’s 15 million households currently have a video streaming subscription, with the number of SVOD subscriptions per SVOD household expected to grow to almost three in 2025. Switzerland and Austria have 4 million households each and 48% and 39% SVOD penetration rates, respectively, which are expected to grow in the coming years.

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Filed Under: Editor's Choice, Newsline Tagged With: Austria, Canada, Germany, NENT Group, Switzerland, UK, Viaplay Edited: 23 September 2021 11:39

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About Chris Dziadul

Chris is our Central & East Europe Editor. You can talk to Chris on Twitter @chrisdziadul or by email at cdziadul@broadbandtvnews.com

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