Nordic Entertainment Group (NENT) has reported that Viaplay, its SVoD service, saw subscribers increase 65,000 quarter on quarter to 1,421,000 representing 60 per cent of the Group’s total subscriber base.
Q1 sales were at SEK 3,975 million (€378m) with 6 per cent organic growth, whilst operating income for the combined business segments was at SEK 535 million. Net Income for Q1 was SEK 348 million, up from SEK 329 million.
Commenting on the results, Anders Jensen President & CEO said: “We made substantial progress during Q2 to seize the significant opportunity we see in the Nordic streaming market. These results clearly demonstrate the strength of our strategy and the ecosystem that we have built. Organic sales were up, and both our operating segments delivered higher profits. We added 65k Viaplay subscribers in what has historically been a seasonally quiet quarter, and we have now grown the Viaplay sub base by over 20 per cent in the last year.
Group sales were up 6 per cent on an organic basis, and operating income for our combined business segments was up 5 per cent. Central operational costs were up significantly as anticipated due to extraordinary investments in our team, branding, culture and values.
Our Broadcasting & Streaming operations delivered yet another quarter of profitable growth. Subscription & Other sales, which accounted for 60% of Group sales, were up 8 per cent. We added 65k Viaplay subscribers in what has historically been a quiet quarter due to the seasonality in the sports subscriber base. We have now added 244k subscribers in the last twelve months and expect to have increased our market share. Viaplay’s 1,421k subscribers now represent 60 per cent of our total subscriber base. The Viaplay intake was above our targets and driven by a combination of healthy gross intake, lower churn levels, and ground-breaking new B2B deals. We have added more original programming and acquired more content and live sports, which have all contributed to Viaplay’s growth, as have our ongoing technology and product developments.
Advertising sales, which accounted for 26% of group sales, were down 3% as double-digit sales growth in both Viafree and Swedish Radio was offset by the fact that we did not have the Ice Hockey World Championship on our Swedish free-tv channels this year, and the continuing soft TV and Radio advertising markets.
We have continued to invest in content, in order to drive our growth. We premiered 5 new Viaplay originals in the quarter, and announced the production of a further 6 new originals. We announced a number of important new sports rights agreements including exclusive coverage of Alpine and cross-country skiing from 2021, the Open golf championship until 2024, and Danish Superliga football until 2024. We have also further enhanced our Hollywood acquired portfolio with the MGM and NBCU deals that we announced earlier in the year, and we have continued to invest in access to high quality content by taking a minority stake in new LA-based studio Picturestart.
We have also signed a series of large scale and long-term strategic distribution agreements with partners such as Tele2 and Telia, which will further extend the reach of our advertising and subscription funded services.
NENT Studios, which accounted for 14% of Group sales, generated 37 per cent sales growth on the back of high scripted drama sales. Operating profits were up significantly as a result. The production pipeline continues to look promising, and we have a high number of very interesting new development projects.
NENT Group comes out of Q2 even better positioned to benefit from the shift to on-demand and online viewing. Scaling Viaplay is the best way to create long-term shareholder value, and we intend to do so while continuing to deliver profitable growth. This is possible because of our unique business model and the dedicated world class Team NENT.”