Nordic broadcasting group Viaplay this morning announced a strategic reorganisation of its business, following a turbulent period in which the company has downgraded its financial outlook and replaced its CEO. The new strategy will see Viaplay focus on its core Nordic, Netherlands, and Viaplay Select operations. As a result, it will downsize, partner, or exit completely other international markets, a significant change of course for the company.
The reorganisation will also see 25 percent of Viaplay’s staff laid off. And the company will undertake a complete review of the entire business, considering “all options” including “content sublicensing, asset disposals, equity injections or the sale of the whole Group” according to CEO Jorgen Madsen Lindemann.
Viaplay has been one of Europe’s most ambitious TV businesses when it comes to streaming, seeking to compete with the international giants not only in its home markets, but internationally too. Over the past three years Viaplay has launched its streaming service in the US, UK, Canada, Poland, Germany, and Switzerland among others.
But earlier this year the broadcaster warned that this strategy wasn’t panning out as hoped. In May, ex-CEO Anders Jensen resigned from his position following “an accelerated deterioration in the operating environment and longer than expected realisation of its cost savings programme”. The company significantly downgraded its 2023 outlook, with predicted organic net sales growth (excluding its FX and Premier Sports units) dropping from 24-26 percent to 16-17.5 percent.
New CEO Lindemann was brought in to steady the ship, and it looked likely that major change was on the cards. Today, alongside Viaplay’s Q2 earnings, Lindemann outlined in more detail the company’s challenges, and how he plans to address them.
Looking to the long term
Lindemann laid out four major challenges for Viaplay. Firstly, “content investments that have been made are not all paying off” according to Lindemann – a problem which is compounded by the fact that Viaplay is committed to many of these investments in the short and medium term. Secondly, Viaplay’s pursuit of subscriber volume growth has come at the expense of value, especially in some of its international partnership agreements. Thirdly, the weak advertising market and currency exchange rates have put pressure on Viaplay’s income. And lastly, assumptions about how quickly Viaplay’s international operations could turn profitable proved inaccurate.
In the immediate term, alongside cutting a quarter of its workforce, Viaplay is writing down some of its content investments, exiting the Baltic markets, and discontinuing its low tier non-sports offering in each of its international markets.
Looking further ahead, Lindemann says Viaplay will be “rightsizing and pricing” its offering in the Nordics. It will also continue to invest in the Netherlands, where operations will soon be profitable. And it will continue to grow out Viaplay Select, whereby it distributes content via third-party platforms in international markets.
As for its wider international strategy, where it has sought to establish its standalone Viaplay streaming service, Lindemann says the company will focus attention on “those markets where we can compete for the long term […] ensuring that our products are relevant, popular and generate healthy returns”.
