Advanced Television

Viaplay hits 6.4m subs

October 25, 2022

Viaplay has reported a 78 per cent year-on-year growth in subscriber numbers, with the pay-OTT service reporting a total of 6.4 million subscribers in Q3 2022.

Viaplay reported net sales of SEK3,972 million (€360.8m) in the quarter, up from SEK3,054 million in the same period last year. It had a net loss of SEK86 million, compared to a profit of SEK55 million a year earlier.

Commenting on the Q3 results, Anders Jensen, Viaplay CEO and President, said: “We have delivered another quarter of high subscriber and revenue growth, which demonstrate the attraction and resilience of our well-differentiated offerings. Our content line-up has never been stronger, and we added key new original and sports content during the quarter. The international operations are performing ahead of plan, and we reached the important milestone of more than 1 million subscribers in both the Dutch and Polish markets. However, this international performance was offset by the rate of direct-to-consumer subscription and ARPU growth in the Nordics, which was lower than anticipated.

Our 25 per cent YoY group organic revenue growth was driven by Viaplay revenues (47 per cent of sales), which were up 64 per cent on an organic basis. The total Viaplay subscriber base grew by 78 per cent, and we ended the quarter with 6,428k subscribers.

The 28 per cent YoY growth in the Viaplay subscriber base in the Nordics was driven by our third party B2B distribution partnerships in particular, as well as lower churn levels. The number of premium subscribers in Norway is building following the inclusion of English Premier League coverage in August, but at a slower pace than anticipated. Sales for Viaplay in the Nordics were up 27 per cent on an organic basis.

The international Viaplay operations added 685k subscribers in the quarter, which was more than double the number of subscribers added in the previous quarter. The addition of the English Premier League rights in  Poland and the Netherlands contributed to the growth, together with the new distribution agreement in Poland. Revenues grew accordingly and also reflected the higher price point in the Netherlands.

Linear subscription and other revenues (32 per cent of sales) were up 9 per cent YoY on an organic basis. The growth in linear channel subscription sales followed the upward price adjustments to reflect the addition of new content, as well as the extension of almost all distribution agreements in Norway to include the English Premier League football coverage.

Advertising revenues (21 per cent of sales) were down 3 per cent YoY on an organic basis, and reflected the weaker development in the linear TV advertising market conditions, which was offset to an extent by the continued growth in the radio advertising markets.

Now that we have completed the acquisition of Premier Sports in the UK, we are raising our year end international subscriber target from approximately 2.5 million to approximately 2.7 million. Viaplay will be launched in the UK on November 1st. At the same time, we are reducing our year end Nordic target from 4.8 million to 4.6 million. Our group target is therefore unchanged at 7.3 million.

As a result of the immediate effects of the general economic slowdown on advertising and subscription sales, the lower than anticipated premium subscription sales in Norway, and the strategic decision to discontinue an unfavourable distribution agreement, we are reducing our full year Nordic organic revenue growth target to approximately 10 per cent. Conversely, international sales are expected to exceed our previous expectations, and we now expect full year total Group organic revenue growth of approximately 20 per cent.

The Q3 profitability level in the Nordics reflected our content investments, including the new and extended sports rights that will drive subscriber and revenue growth. The lower than anticipated Q4 sales growth in the Nordics cannot be fully offset by corrective measures and cost savings in the short term, so we now expect a full year margin for the Nordic operations of approximately 7 per cent. The international losses were at their peak level in Q3 as we added new content. We maintain our full year outlook for international losses, which was improved last quarter and will provide a better starting point for 2023.

These adjustments to our short-term targets, and the addition of Premier Sports, also affect our long-term targets, as does the significant forward currency headwind due to the strength of the US dollar. Our international operations are now expected to be profitable on an annual basis in 2024 – one year ahead of schedule. This is due to a combination of higher sales growth than originally projected, and the prioritisation of investments into Poland, the Netherlands and the UK. Our Nordic operations are now expected to grow their revenues at a slower rate moving forward. We will embark on a substantial cost saving programme in 2023, in order to deliver these targets by offsetting some of the operating and currency headwinds that we face. We expect to deliver a full year 2025 Group EBIT margin of approximately 13 per cent, with margins to then increase over time. It is clear that the international expansion is spreading and reducing our risk as a group […] We will provide further updates and details at our Capital Markets Day on 9 November.

We remain fully funded for our expansion and have full visibility over our forward content costs. The broader macro-economic outlook and geopolitical backdrop are of course less certain. This is why we have adjusted our growth outlook, and already made plans to adjust our cost base and exposure, where relevant and as we have done in the past. We are also taking steps to accelerate our growth where momentum is strong.”


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