Viaplay, NENT Group’s streaming service, has reported that Q1 paying subscribers were up 25 per cent YoY to 3.1 million, with at least 650,000 paying subscribers to be added in 2021
Anders Jensen President & CEO, commented: “Q1 was another busy quarter in which we demonstrated that we are well on track towards our five year strategic targets. We have achieved a lot despite the ongoing challenges of the Coronavirus pandemic. Our new ways of working are working well, and we are developing flexible new set-ups that will be sustainable and inspiring once we are able to reopen our offices fully. Viaplay continues to drive our growth and entertain millions of people with more and more relevant and high quality content. 16 per cent group organic sales growth and 33 per cent underlying profit growth in the quarter illustrate the strength and progress of the business. The successful raising of SEK 4.35 billion [€0.43] from our new share issue will provide the funds for our international expansion, which has started according to plan with the launch in the three Baltic countries. We are on track with our plans, we are making great progress and we are reinventing our ways of working to make the learnings from the pandemic a positive force in the future.”
Viaplay revenues (34 per cent of sales) were up 17 per cent on an organic basis after 25 per cent YoY subscriber growth, as we closed Q1 with 3.147m paying Viaplay subscribers, adding 127k in the quarter. Total streamed minutes on Viaplay were up 16 per cent YoY and reflected the continued and increasing popularity of our originals and unique live sports offering in particular. We continue to expect our paying subscriber base in the Nordics to grow by at least 400k this year.
The successful raising of SEK 4.35bn from existing and new owners in February has enabled us to proceed with the international expansion of Viaplay. The first launch in the three Baltic countries last month has gone well and we have quickly achieved high awareness and strong sign-up levels, as well as signing two new partnership deals with leading local telcos to make Viaplay as broadly available as possible. Next up are Poland in August and the US at the end of the year. We will have more than 250k international subscribers by the end of 2021 and will provide updates in due course.
We are continuing to increase our content investments in the Nordic and international markets. These include more than 40 Viaplay original premieres this year, as well as a range of long-term and high-profile sports rights agreements. We have rolled out price adjustments and are establishing new and extended partnerships with distributors to support the increased investments.
Other subscription revenues (35 per cent of sales) were up 21 per cent YoY when excluding the contribution from the Viasat Consumer business prior to deconsolidation last year. This performance reflected the growth in revenues from Allente in particular.
Advertising revenues (29 per cent of sales) returned to growth and were up 6 per cent YoY on an organic basis. Prices are up in the annual agreements, and we have taken market shares in almost all areas as demand levels gradually return.
Revenues for the continuing studios businesses (3 per cent of sales) were up 66 per cent YoY on an organic basis as delayed productions recommenced. We are proceeding as planned with the divestment process, in order to focus our studios primarily on the production of original scripted content for Viaplay. We continue to expect the process to complete in H1.
Our EBIT before ACI and IAC was up 33 per cent when excluding the contribution from the Viasat Consumer business last year, and including our initial investment in the international expansion of Viaplay.
Our joint venture Allente is on track to deliver the SEK 650m of cost synergies, as well as the up-selling of Viaplay to the rest of its subscriber base. The company continues to restructure and integrate as planned, and we received a further SEK 250m dividend this quarter.
We are now heading into a period with softer year on year comparisons, due to the major impact of the Coronavirus in Q2 last year in particular. While conscious that the full effect of the pandemic is far from over and certainly not predictable, we are stepping up our investments in the growth of the business, and the opportunity to entertain the ever- increasing number of people who are choosing to stream. We look forward to announcing our next five expansion markets later this year.
We are on track with our growth and expansion plans. We are streamlining the business and investing in the growth of Viaplay. We have a proven and scalable platform that is constantly learning, and we are totally focused on delivering the best possible customer experience. And we are seeking to do all of this in a sustainable way that takes care of our many and varied stakeholders, as well as the societies and environment in which we operate. Our aim is to be the European streaming champion, and one of the most inclusive and diverse entertainment companies in the world.”