‘Above target’ Viaplay subscriber growth has led to a positive Q2 for Nordic Entertainment (NENT) Group.
The company added 65,000 subscribers in what is normally a “quiet quarter” due to “seasonality in the sports subscriber base”.
Speaking on the company’s earnings call, CEO and president Anders Jensen (pictured) said that this was “driven by a combination of healthy gross intake, lower churn levels, and ground-breaking new B2B deals”.
He continued: “We have added more original programming and acquired more content and live sports, which have all contributed to Viaplay’s growth, as have our ongoing technology and product developments.”
Viaplay has added 244,000 subscribers over the past year, to make up a total of 1.421 million subscribers. Customers of the service represent 60% of NENT Group’s total subs.
Jensen added that streaming has become increasingly important to the company’s strategy, stating that “put simply, capturing the streaming opportunity is the key factor in driving long-term value for our shareholders.”
Speaking on the topic of Viaplay’s pricing, Jensen specifically cited Netflix’s strategy and suggested that any adjustments could damage the OTT service’s growth: “On Viaplay, we are now announcing price increases on sports in Denmark as our first step, and we are following the development of Netflix price increases that we now see traveling through Europe. If and when they come to the Nordics, we will increase at the same – to the same levels.
“We think it’s a bit premature to start to create our own price category. We don’t want to offset the very healthy growth patterns that we see right now, but we believe that pricing power is one of the key tools going forward as the category gets more and more interesting and people are trading down on traditional TV packages. This is still cheap.”
Subscription sales account for 60% of NENT Group’s revenue, with Viaplay accounting for 60% of that. ‘Subscription & Other sales’ were up 8%.
Overall, Group sales increased by 6% and the operating income for its combined business segments grew by 5%.
Advertising sales accounted for 26% of group sales and were down by 3%. Jensen attributed this to the Ice Hockey World Championship not being aired on Swedish free-tv and the “continuing soft TV and Radio advertising markets.”
NENT Group has heavily invested in content in recent times, with five new Viaplay originals debuting in the quarter and a further six new shows in production. In Q2, the company also announced several sports rights agreements including exclusive coverage of Alpine and cross-country skiing from 2021, the Open golf championship until 2024, and Danish Superliga football until 2024.
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