Viaplay exits UK and US amid £400m quarterly loss

Viaplay exits UK and US amid £400m quarterly loss

Viaplay is cutting a quarter of its workforce and pulling out of the US and UK markets after a sharp reversal of fortunes in its international business.

The Nordic broadcasting group reported a net loss in the second quarter of 2023 of SEK5,886m (£443.5m), compared to a modest quarterly profit last year.

The UK exit means Viaplay will end its coverage of sport in the UK, which includes broadcasting Scotland men’s football matches, the Scottish League Cup and URC rugby. The Nordic company, which is also title sponsor of the Scottish League Cup, has a deal to televise Scotland games until 2028.

Last November the company launched a streaming service in the UK and rebranded Premier Sports, the sports broadcaster it acquired last year. Premier Sports retains the UK broadcast rights for Spanish LaLiga football and UEFA Nations League matches (except England which are broadcast on Channel 4). Viaplay had agreed to a multi-year partnership in April with Roku to expand into the US and Canada, too.

Analysis: an opportunity or cautionary tale for AVOD rivals?

This set of financial results was bound to be terrible for Viaplay, given that it comes just weeks after now-former CEO Anders Jensen resigned amid dire warnings of how weak the TV and radio markets had become.

Many of Viaplay’s problems are indeed due to a wider weakening in advertiser demand. Despite marketing confidence remaining relatively buoyant in the UK, TV budgets are being squeezed and money is coming into the market later than usual.

But the company’s fortunes have also been impacted by lower-than-expected demand in both the Nordic and international streaming markets, as well as lower wholesale subscription sales by distribution partners.

Meanwhile, the Swedish economy is expected to enter recession this year. While the country is experiencing inflation pressures similar to the rest of Europe, Sweden also has acute housing market issues, with rising consumer debt putting a brake on household spending on treats such as pay-television.

Viaplay’s new president and CEO, Jørgen Madsen Lindemann, has opted to shore up the company’s position in its home markets. In a statement announcing today’s layoffs and financial earnings, Lindemann warned: “The content investments that have been made are not all paying off… the pursuit of subscriber volume growth has been at the cost of value… [and] The international expansion assumptions, including the timelines to profitability, have also been pushed materially into the future since the expansion started.”

In short — the company moved too fast into international markets and did not anticipate such a sudden halt to momentum in the streaming boom which accelerated during the Covid-19 pandemic.

As ever, markets move much quicker than any individual company’s strategy can keep up with. This presents either an opportunity or a cautionary tale for ad-funded streaming platforms — depending on their relationships with international partners and the strength of their content slate and rights deals.

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