Nordic Entertainment (NENT) group has announced changes to reporting structure following the merger of its Viasat pay TV service with Telenor’s Canal Digital.
The company also has updated its 2020 Viaplay subscriber target to add 600,000 users in 2020. The service ended 2019 with 2.27 million subscribers, growing to 2.51 million at the end of Q1. Viaplay subscribers will now be reported on a quarterly basis.
The merger of Viasat with Canal Digital has seen the Viasat Consumer business deconsolidated, and NENT Group will report its 50% share of the new joint venture – dubbed Allente – as income from associated companies in the Group’s operating income (EBIT). NENT said that the merger is expected to generate annual cost synergies of approximately SEK650 million (€62 million) from 2022, and that integration and other costs are expected to cost SEK900 million (€86 million) across 2020-21
NENT added that the move is “in line with the Group’s strategy to be the leading Nordic streaming provider and content producer with a global appeal.”
This reporting change will effectively manifest with the company providing four net sales categories. These categories are: Viaplay, which is made up of chargeable streaming; Other Subscription, made up of wholesale channel, carriage and other subscriptions; Advertising and Studios & Other.
NENT also has provided clarity on its payment structure for sports rights in a world where events have been punctuated by the ongoing coronavirus pandemic. It said that all of the remaining rights costs for the current seasons of football leagues that have now restarted will be expensed in the Group’s Q2 results, including the 2019/2020 seasons of the Premier League, Bundesliga and Superliga. Meanwhile, costs for some of the other sports events that are yet to restart their seasons will be taken from Q3.
The company added that football’s return has attracted “unprecedented interest” on Viaplay, with the first 12 Premier League Matches seeing an increase in streamed minutes of 23%.
Anders Jensen, NENT Group President and CEO, said: “The new reporting structure is in line with our strategy to focus on the development of Viaplay, and also follows the recent completion of the merger to create the Allente pay-TV business. The provision of Viaplay revenues and total Viaplay subscribers will clarify and simplify our story further, and we have also set a new and upgraded target for full year Viaplay subscriber intake that reflects the strong momentum that we have seen in recent months.
“The return of a number of key sports leagues in recent weeks has been a massive success, and our Viaplay sports package prices will be back to normal for everyone in July. The ongoing decline in advertising and production revenues due to COVID-19 is in line with our expectations, and the process to sell the non-core part of our Studios operations is on track. Viaplay is continuing to outperform our expectations in Iceland, and our preparations to launch Viaplay in all three Baltic countries in Q1 next year are proceeding according to plan.”