Half way through last year, Nordic broadcaster Viaplay announced a major change in direction, as the company found itself in dire financial straits. An ambitious international expansion plan had failed to grow as quickly as had been hoped, resulting in unsustainably high losses. This change of course was painful – the company laid off a quarter of its staff, replaced its CEO, and exited several international markets.
The result however has been a steady improvement in Viaplay’s balance sheet. And the broadcaster’s Q3 results, released today, show that its quarterly losses have fallen significantly. Operating income before associated company income and items affecting comparability – the financial indicator used by Viaplay’s management to analyse underlying profit – sat at SEK -56 million (-£4.1 million) across the quarter.
This was a sharp improvement from SEK -321 million in the same quarter last year, and given that associated company income and items affecting comparability were both positive, it left Viaplay with an operating income of SEK 2 million for the quarter. Operating income for the whole of 2023 was SEK -10,276 million, so the fact that Viaplay has managed to push its operating income into positive territory marks a significant turnaround.
“Still early days”
Key to this turnaround has been Viaplay’s decision to axe unprofitable offerings and leave unprofitable markets, bringing down its costs. Total net sales in Q3 were down by 2.7 percent, to SEK 4,412.
But Jørgen Madsen Lindemann, the CEO brought in to steady the ship last year, hasn’t just been charged with pruning Viaplay’s operations. While he’s talked a lot about “right-sizing” the company’s offering, he’s also talked about opening up new revenue streams to drive further growth. On this front, there was positive news within the Q3 results as well.
On the content front, Viaplay has increased its focus on non-scripted formats, and Lindemann says this has paid off with higher viewing and return on investment levels. The broadcaster has also streamlined the sports rights it has bid for, and says it’s confident in its Q4 offering – though Lindemann did say that rival channels’ coverage of key sports events in Q3 contributed to an overall fall in ad revenues in Q3.
In order to boost revenues from its streaming service, Viaplay has also rolled out a hybrid tier, and Lindemann says the early indications are positive. “It is still early days, but this competitively priced tier, which includes advertising, has so far attracted new customer segments, led to reactivation by former subscribers, and complemented our existing subscriber base,” said the CEO.
The company has also joined some of the major international streaming services in cracking down on password sharing. This also appears to be bearing fruit. “The measures that we are taking to reduce account sharing were implemented in Denmark, Sweden and Norway in the quarter, and are now active in all of our core markets,” said Lindemann. “It is still early days, but the level of sharing has already decreased, and the majority of former account sharers have retained their subscriptions.”
