Investment bank Berenberg, in a major report on Nordic Entertainment Group (NENT) and the prospects for further expansion for the broadcaster, suggests some appealing markets which NENT might be looking at to launch its Viaplay service.
NENT is due to hold its Capital Markets Day (CMD) on September 22nd when it might make announcements as to its expansion plans for 2022 and 2023. NENT has already announced expansion into the Netherlands for Q1 2022.
Berenberg has charted the picture across Europe and beyond, and looks at the addressable household penetration, the underdeveloped SVoD markets, the GDP and thus the ability to pay for more content and where competition might be fierce.
The bank shows the level of GDP per capita ranges from cUS$10k (Bulgaria) to cUS$116k (Luxembourg), with an average of cUS$35k.
“For the countries at the lower end of this range (below EUR20k), it may be hard to justify a launch of Viaplay in the region. If NENT were to launch Viaplay in regions with a lower level of GDP per capita, the subscription price per month would most likely have to be lower than the cost of Viaplay in existing markets. We would therefore not expect significant investment in local originals given the difficulty involved in recouping the investment. Sports rights could theoretically be acquired at lower cost, so we would not rule out a sports offering if Viaplay were to launch in any of these markets,” Berenberg says.
Berenberg suggests that Belgium might well figure in NENT’s expansion plans. The bank says: “Given the imminent launch of Viaplay in the Netherlands – where NENT has acquired the rights to the Premier League, Bundesliga and Formula One – it is impossible to miss the synergistic potential offered by the Dutch-speaking regions of Belgium, both in terms of Dutch originals in which we expect NENT to invest and in terms of sports commentary. However, a note of caution: while we think there is strong potential for Viaplay in Belgium on the entertainment side, there is limited scope for sports rights acquisitions in the near term. Formula One (in 2022 on our estimates) is the only key right that we identify as a possible addition to NENT’s portfolio in Belgium.”
Then there’s the US. The bank says: “At NENT’s last CMD, the company announced that Viaplay would be launched in the US with a focus on its original content; at the time, we described this strategy as “Nordic niche”. Given the evolution of the international expansion and our expectations for local originals in various markets – particularly Poland and the Netherlands – we now feel it is more appropriate to label this as an “international content” approach. This is more appropriate for more mature and competitive markets, such as the UK, Germany and Canada where Viaplay’s original content can be offered as a standalone product, without NENT having to invest in sports content. We expect this strategy to be employed in at least one of the four markets announced.”