Danish broadcasting ‘hurt by Netflix’

Denmark is an important European market, but – along with its Scandinavian neighbours – tends to be overlooked. Now, equity analysts at investment bank Exane-BNP/Paribas have taken a close look as part of its STAMP (Survey of Telecom & Media Preferences) examination of the country, and in particular viewing habits and preferences.

And the news is not necessarily good for traditional broadcasting in Denmark.

For example, Copenhagen-based TDC Group (Tele Danmark Communications) is the largest telecoms player in Denmark, and – amongst many other investments – operates (the old) TDC Kabel TV, now called YouSee in its multi-play service. Last week TDC reported its Q2 numbers, and as the bank reports, “once again the quarter saw the company lose more TV RGUs. Management acknowledged cord-cutting had gotten worse in the Danish market over the past 2 quarters and are now focused on ways to address the phenomenon,” says the bank.

The bank’s STAMP study shows that not only are Danish consumers amongst the least satisfied with their TV content “but Netflix has a relatively high penetration rate compared to European peers. This is not a great combination. Without remedial action (i.e. trying to make the TV product more appealing) it is unclear how TDC can mitigate this cord cutting trend… so what are they doing?”

The bank says: “TDC are looking to address this by trying to make their premium TV packages more attractive as well as integrating OTT services within the box for subscribers – facilitating a convenience factor by having Netflix integrated within content discovery in the platform. This they claim has already shown early signs of reducing churn in the TV base. Ultimately though, operators face a stark choice – the move to more ‘flexible’ TV packages inevitably leads to pricing down of the premium bundles.”

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