Berenberg: Viaplay set for stellar international growth

Nordic Entertainment’s (NENT Group) foray into international streaming video markets including the Netherlands and Poland is likely to deliver faster subscriber growth than predicted by the company’s own management, according to analysts from Berenberg.

According to the analysts, NENT Group’s Viaplay platform is likely to deliver 452,000 Nordic and 348,000 international subscribers this year, up from previous estimates of 425,000 and 340,000 respectively. NENT Group’s management have most recently given targets of “at least” 400,000 Nordic subs and 250,000 international subs.

Berenberg believes that Viaplay is now positioned to deliver 5.5 million international subscribers by 2025, well above NENT Group’s management’s forecast of 4.5 million.

“We continue to believe that there is significant opportunity in the subscription video on demand (SVOD) space for platforms such as Viaplay that can offer differentiated content without having to go head-to-head with the US giants, and we believe that NENT management has pinpointed a winning strategy through local original content and sports rights,” said the analysts.

Viaplay will launch in Poland in August, and Berenberg’s analysts expect this launch “to provide evidence of the efficacy of [NENT Group’s] strategy”.

Viaplay is scheduled to launch in the Netherlands in Q1 next year, with four other international markets to follow.

“We are optimistic regarding the prospects for Viaplay in the Netherlands, particularly as NENT has already secured two key sports rights, most notably Formula 1 as Dutch driver Max Verstappen commands a large and loyal domestic following. We also expect strong investment in local original content to drive medium-term market penetration, with an expected annual release cadence of five to 10 Dutch originals once the Dutch operation is fully up and running,” said Berenberg’s analysts.

The bank’s analysts said that premium rights in competitive markets such as the Netherlands might require additional investment, meansing that it was reducing its earnings forecasts, but that this would be “more than offset” by longer-term growth.

Berenberg upped its share price target for NENT Group to SEK590.

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