Newsletter August 22: Record levels for Swedish SVOD penetration in Q2 and mixed FAANG results

22 August 2018

With the second quarter of the year and the summer vacations having come to an end, this week we zero in on the Swedish TV market as Mediavision’s quarterly analysis TV & Video Insight is to be published shortly. Furthermore, we take a look at some of the FAANGs’ (Facebook, Amazon, Apple, Netflix, Google) Q2 performances.

Mediavision’s quarterly in-depth analysis of the Swedish TV landscape, TV & Video Insight, is to be published next week. It shows that streaming services continue to gain ground. SVOD (subscription video-on-demand) services are taking the Nordics by storm and the second quarter of 2018 show no signs of saturation. Household SVOD penetration continues to shatter records on the Swedish market in Q2 and Netflix is still in a clear lead. However, following its Q2 report Netflix’ share price took a turn for the worse, dropping about 20%, due to its global subscription numbers falling short of forecasts. Netflix had predicted an additional 6.2 million subscribers during Q2 but ended up adding 5.2.

Mark Zuckerberg and Facebook had a turbulent second quarter with the Cambridge Analytica scandal and its handling of fake news making headlines. Facebook’s share price also took a tumble, recording a reduction of its market cap by approx. $120 billion. Apple, on the other hand, became the first company to reach a trillion-dollar valuation. This despite Apple seeing its Iphone sales falling short of expectations. Amazon reported an explosive increase in net income YOY which is uncharacteristic, as Amazon usually reinvests most of its earnings. Also, Amazon more than doubled its ad sales with a turnover of $2.2 billion during Q2. For comparison, Amazon’s ad sales are three times the size of Twitter’s and ten times the size of Snapchat’s.

Netflix share price has not managed to recover. Prior to its earnings report in July Netflix share price reached around $400 and by mid-August it has dropped to $316. At closing yesterday, the price per share was up at $338. Facebook faces a similar fate and its share price hasn’t recovered since its Q2 earnings report either. Follow its earnings report the share price tumbled from roughly $217 to $176.

Netflix & Facebook share price since their earnings reports (USD)

Further reading:

Apart from our quarterly analysis, Mediavision’s annual analysis of the Swedish TV Market is already available for order. The analysis provides industry overview as well as in depth market insights, click the link below for more info.

Mediavision blogs:

Summer TV viewing and the FIFA WC
As many of us are now returning to work after a splendid summer, we’re taking a quick glance at the development of the 2018 traditional TV viewing so far. It’s of course with a special focus on summer ratings, particularly since Sweden this year outperformed all expectations and made it to the quarter finals in 2018 FIFA World cup in July.

Mediavision press releases:

World Cup and re-regulation increases competition on the Swedish gambling market
Competition between off-shore regulated and Swedish gambling companies have increased significantly as a re-regulation of the Swedish gambling market draws closer. With a new licensing system being introduced in January 2019, several off-shore […].

Industry news:

Google Assistant launching in Sweden
Google’s voice assistant is launching in Sweden and several companies are jumping on the bandwagon. H&M Home, Sveriges Radio and ICA are developing their own services using Google Assistant.

Netflix is experimenting with ads
Netflix has started advertising other shows between episodes while bingewatching. Netflix states that this is a test its running on a select group of customers and that the content being advertised is strictly its own.

Twitch Prime eliminates ad-free viewing
Twitch Prime will no longer offer ad-free viewing for its new members. Starting September 14 ad free viewing will no longer be part of the Twitch Prime benefits for new members. A new level called Twitch Turbo offers ad-free viewing.

China spends the most on TV after the US
China is the world’s second highest spender on TV shows after the US. China spent $10.9 billion during 2017, overtaking the UK with a spend of $10 billion. Online platforms spent $4.5 billion while linear TV stood for $6.4 billion.

Apple pulls gambling apps from Chinese store
Apple has pulled thousands of gambling apps from its Chinese app store after China’s state-run broadcaster accused Apple of dragging its feet on cleaning up banned content. Apple confirmed the action in an emailed statement.

Mediavision in the news:

Swedish traditional viewing down 6% in H1, down 15% among young adults
Swedish consultancy Mediavision said that in the first six months of 2018, traditional TV ratings in Sweden have been on a continuous downward trend, even in comparison with the rather uneventful year of 2017.

Industry events

*Events where Mediavision will be presenting