Bank: “Nordic Noir helps Viaplay”
August 10, 2022
A report from Jefferies Bank suggests that Viaplay has married its dominance (indeed, creation) of a genre – in Nordic Noir – to top-flight sports rights to become a household name in streaming in the Nordic regions. It is now in the foothills of replicating the playbook internationally.
The bank says it is optimistic on market penetration but less so on market monetisation, noting: “Viaplay trades at a premium to Netflix on 25x 2023 EV / EBITDA. We initiate with a Hold pending better visibility.”
Viaplay was a purely SVoD service and brand in the Nordics. But that changed on November 20th last year.
“An equity raising exercise funded a large expansion in original content and sports rights,” says Jefferies. “We initiate [coverage] while Viaplay is in the thick of that change. Given the business model and the ambition, the investment case hinges on three things: subscriber growth, monetisation therefore and the quality of its operational leverage,” says Jefferies
The bank sees upside risk of Viaplay’s target 12 million by FY2025, commenting: “Our logic is threefold: Viaplay’s markets all have an ability to take more SVoD services if we compare current service stacking (2-3x) to reference rates of latent demand (>4x); the FY25 targets imply low levels of market penetration in the International markets (<3 per cent); and the weight of the incremental subscribers will come from the Netherlands and Poland, where Viaplay has a strong value proposition (and app download data for the Netherlands suggests particularly strong take-up). Our issue is not getting consumers to download however, it’s getting them to pay.”