Video streaming services were initially thought to be one of very few industries to benefit from people spending more time at home. However, there are also negative effects and they are becoming increasingly evident as the lock-down continues – also for the major players.

As more and more countries literally shut down, online video streaming have become increasingly important in people’s lives. In the Nordics, as elsewhere, there is a clear increase in viewing as well as in subscriptions. On a global level, Strategy Analytics recently adjusted its 2020 estimate for SVOD subscribers to 947 million – an increase of +5% compared to pre-corona figures. Netflix, being one of the major actors, is also experiencing a boost both in usage and stock price. However, as the restrictions on people and businesses have spread, so have also the negative consequences.

To start, virtually all productions of series and movies in the US have either been cancelled or postponed. Netflix has put all scripted film and TV productions on hold, including Nordic titles such as Love & Anarchy and Home for Christmas. Several Nordic studios have also postponed or cancelled productions, including Nexiko, FLX and Filmlance. Furthermore, traditional TV programs such as entertainment shows and sports have been affected. For example, Swedish Let’s Dance (“Strictly come dancing”), has been forced to change its’ content as some of the participants have fallen ill.

The break in production also risks affecting launches later in the year. For Netflix, battling the loss of high-profile series and movies already prior to the corona outbreak, this is far from good news. Rights owners such as AT&T/Warner Media and Comcast/NBCUniversal have withdrawn popular titles from Netflix, as they are launching competing services. This leaves Netflix highly dependent on its’ original productions. Some competitors, such as Disney, may not be as affected as their library is more extensive.

Apart from this, a market in distress makes the established saying “Cash is king” highly relevant. Netflix has long struggled with negative cash flow, as a result of the huge investments in content (as well as in tech and people). And at the same time, new services are being launched… Disney+ initiated its second phase of the global launch in Europe last week – +5 million downloads the first day. In the wake of the Conrona pandemic, concerns are now being raised that layoffs and unemployment rates will increase pressure in the industry. It may very well be that streaming services are approaching market maturity with increasing competition as well as a slowing stacking factor.

From a local Nordic perspective these questions are highly relevant. Soon Mediavision will publish this spring’s edition of Insight: TV & Streaming and Insight: Media & Markets, with SVOD figures for both consumption and subscriptions. We can conclude, that even if streaming is experiencing a surge right now, there are several reasons for concern going forward.

Although athletes have been forced to take an involuntary break from the action on the field for the last couple of months, the world of sports media has been quite eventful. Popular media sports rights have switched owners and Telia & Discovery recently made an agreement that turns the tables for sports content in Sweden. On top of that, the first major league was restarted last weekend.

With practically all professional sports activities (apart from equestrian sports) put on hold this far into the pandemic, interest for sports has not worn off. According to a global survey, conducted by IMI’s NextWave consultancy, 38% of males in the Gen Z/Millennial age groups say watching live sports is what they miss the most during the pandemic, outranking both feeling safe to go outside (31%) and general social interaction (32%). Data from Mediavision’s Nordic Sports Analysis 2019 supports this notion.

While sports events are put on hold, the sports market has been anything but calm. High-ranking media rights have been negotiated and perhaps the most eye-catching agreement is that of Nordic Champions League (CL) rights – ranked as the most popular premium sports right in the region in Mediavision’s Nordic Sports Analysis 2019. CL was recently secured by NENT (DK),TV 2 (NO) and Telia/TV4 Media (FI and SE). This week, Telia demonstrated its commitment to sports even further by securing the rights to the top male football league in Spain, La Liga, until spring 2026.

On Monday May 18th, Telia announced that it will license the standalone OTT rights to Discovery in Finland and Sweden (thereby fulfilling the terms set out by the European Commission regarding Telia’s acquisition of Bonnier Broadcasting/TV4). Dplay will carry TV4 Media/C More’s sports content – likely increasing the attractiveness of Dplay significantly, which is already home to popular sports such as the Swedish major football league Allsvenskan and the Olympic games (both summer and winter). This may turn the tables for Dplay, that is still small in terms of numbers of subscribers compared to its competitors.

As it seems, we will soon see some of the major leagues restarting. Germany’s top male football league Bundesliga was first in returning to the stadiums last weekend, but not without objections from the fans. German TV network ZDF found that 62% of the fans would have preferred to cancel the season entirely, rather than resuming the league under terms set out by the Ministry of Health. Regardless, the matches drew record audiences. For example, NENT reported that the six broadcasted games this weekend attracted on average 40,000 viewers in Denmark, compared to 13,000 for this seasons games played prior to the pandemic. Viewing of the high-profile game between Dortmund and Schalke increased by 400% on Viaplay in the Nordics, compared to the corresponding game last fall.

In the Nordics, dates for the return of all top leagues for football has been set, apart for Swedish Allsvenskan. Norwegian Eliteserien is set for 16th of June, Danish Superliga for 28th of May and Finnish Tipsligan (Veikkausliiga) for 1st of July. In Sweden, negotiations have been heated. Last Friday, the Ministry of Health disapproved the proposed starting date and postponed the decision of a new date further. Hopefully, a decision will be made next week.

Cancelled or postponed games of course have severe financial consequences for all actors involved in this industry. Rightsholders will neither pay full price for paused seasons, nor for games lacking the usual atmosphere as spectators are not allowed in the stadiums. The majority of rightsholders have lowered their prices on premium sports subscriptions, causing substantial revenue loss. As leagues are beginning to restart, and money transfers from rightsholders are reinstated, prices of packages may soon be back to original – but not yet. So far, TV 2 Norway has announced that the regular pricing will not apply until when Premier League is played.