Newsletter April 25: Nordic operators; TV subs and ARPU development Q1 2018

25 April 2018

Nordic operators, Q1 reports
Several of the Nordic telecom operators have recently published their financial reports for the first quarter of 2018. This week, Mediavision takes a closer look at their pay TV subscriber numbers and ARPU levels (Average Revenue Per User).

We can conclude that the pay TV market is overall stable and remarkably resilient, despite shifting viewing habits and the fear of cord-cutting in the wake of Netflix’ and other SVOD operators’ rapid growth. Last week, we looked at Nordic traditional TV ratings for the first quarter of 2018 (see newsletter April 18). The steep decline in viewership in younger age groups is hardly surprising. However, the drop in the more commercial age groups (25-34 & 35-49) is somewhat more of an eyeopener.

Pay-TV subscribers & ARPU (%) Q1 18 compared to Q1 17 in the Nordics ¹
Despite the steep decline in linear TV viewing, traditional pay TV subscriber numbers as a whole have remained stable across the Nordic region. However, there has been a significant shift in the traditional pay TV universe, where operators that offer IPTV (like major Nordic telco’s Telia and Telenor) have grown their subscriber bases, while those who mainly operate on older infrastructure (CATV, DTH and DTT) have lost subscribers. This pattern is true not only for Q1 2018, but for the full year of 2017 as well. For a more in-depth analysis of the Swedish pay TV market (and much more), Mediavision’s annual report Swedish TV Market is soon to be published which you can read more about here.

Com Hem has been successful in maintaining and acquiring new pay TV customers through its fiber & IPTV offering, as well as converting old CATV subscribers to IPTV. On the other hand, DTT operator Boxer which is owned by Com Hem, continues to lose subscribers at a fast rate: -9% YOY in Q1 2018. Ramping up its digital offering, Com Hem Group recently launched TV Hub, an Android TV-based platform that combines linear TV and online video, and B-SVOD service ComBo.

One of the actors with a legacy business in pay TV via satellite (under the Viasat brand) is MTG, who reports a -1% decrease YOY in pay TV subscriber numbers for Q1 2018 in the Nordics. An increasing share of Viasat’s subscribers are now on IPTV, as the DTH subscriber base continues to dwindle; -10% in Q1 2018 vs Q1 2017.

As with Com Hem, Telenor has also maintained a relatively stable overall base of TV subscribers, despite DTH dropping -4% in Q1 2018 YOY. Through its Canal Digital brand, Telenor Group recently launched an Andriod TV box called OnePlace, combining linear TV and online video.

Telia has grown its subscriber base slowly but steadily throughout 2017, continuing during Q1 2018, mainly in Sweden.

Netflix subscriber numbers booming during Q1, leads the pack on the Swedish OTT market
While traditional pay TV subscriber numbers stay resilient on an aggregate level, SVOD penetration continues to soar globally. Streaming giant Netflix reported a record-breaking first quarter of 2018 adding 7.4 million subscribers, totaling 125 million globally. Zooming in on the Swedish streaming market, Mediavision’s recently published quarterly report The Inventory Insight reveals that Netflix plays in a league of its own both in terms of content supply and in consumption.

In runtime, Netflix stands for 27% of the content among curated OTT services in Sweden (excluding Amazon) and accounts for 11 600 hours of scripted content. Netflix also gather a considerably larger viewing share compared to its share of content supply, far outperforming other services with a viewing share of 44%.

Mediavision press releases:

Today’s DPO of Swedish Spotify has gathered much attention in both Sweden and internationally. The broad impact in Sweden is partly explained by Swedes’ great interest in digital media services. Mediavision finds that over 60 percent of Swedish households subscribe to at least one service for music or TV streaming.

Industry news

Netflix raises $1.9 billion in debt financing
Netflix has announced its biggest round of debt financing to date of $1.9 billion as the streaming giant continues its content spending spree. Netflix has been routinely turning to debt financing, this being the fifth time in three years.

Nordic public service forms content alliance
Public service operators in the Nordics are forming a content alliance in order to up the amount of Nordic drama on the streaming market. The alliance called “Nordic 12” includes DR, NRK, SVT, YLE and RÚV.

Canadian gambling firm buys Sky Betting
Canadian company The Stars Group Inc, which owns PokerStars, is to acquire UK-based firm Sky Betting and Gaming for roughly £2.5 billion. According to The Stars Group, the deal will make it the world’s largest publicly listed online gaming company.

P&G returns, Youtube hit with new scandal
Procter & Gamble recently announced that its resuming ad spending on Youtube after a year long break due to reports of ads being displayed next to extremist content. However, a new report says Youtube still can’t guarantee brand safety.

Denmark to cut public service budget
The Danish government and Dansk Folkeparti has presented a proposition to remove the public service fee and to reduce the public service budget by close to DKK500 million between 2019 and 2023.

Mediavision in the news

Sweden’s battle of the brands
Arvid Åsbrink, a senior consultant at Swedish research firm Mediavision, examines the advertising opportunities from Sweden’s forthcoming gambling regulation. The Swedish gambling market as we know it is about to change in a profound way.

Q1 Nordic TV ratings plunging across the board
As local Swedish online video services keep growing and increased digital viewing brings greater commercial opportunities for advertising video-on-demand (AVOD) players […].

Industry events

*Events where Mediavision will be presenting