Analysis: Positive outlook for Swedish subscription market
March 16, 2023
Swedish media is mainly financed by advertising and consumer payments, according to Nordic independent analysis and consultancy firm Mediavision. The advertising market is largely affected in an economic downturn. However, Mediavision suggests that households’ interest in paying for media, for example through subscriptions, continues to increase – despite the economic decline. For many media companies, consumer revenues will increase in importance if Sweden enters a recession.
Swedish household media spend has gradually increased and despite economic concerns, 2022 was no exception. Average media spend increased 8 per cent compared to 2021, and now amounts to SEK 685 (€61.15) per month. Looking across the three main categories text, audio and video, audio services increased the most, with 12 per cent. At the same time, text grew by 5 per cent and video by 9 per cent compared to 2021.
For the advertising market, development was significantly weaker and, according to research institute IRM, a decrease of just over 2 per cent was noted in the last quarter of the year, compared to the same period in 2021.
For advertising revenue in 2023, IRM expects a continued decline of 0.7 per cent. For consumer payments, Mediavision currently sees no signs of a similar decline. On the contrary, preliminary data for the first months of the year shows continued growth. Bottom line is that consumer payments are stable or increasing, despite economic instability. When consumers are asked about their plans in financially tougher times, other expenses than media are opted out first.
“We recognise this pattern from previous economic downturns,” advises Marie Nilsson, CEO at Mediavision. “Household spend on media is more stable than advertising revenue. Therefore, it is particularly important in these times to closely monitor, for example, customer satisfaction and price sensitivity. Bundling different types of media services can also be a way to strengthen the relationship with consumers.”