This week we take a closer look at some of the video actors’ latest earnings reports. Following a second quarter heavily impacted by the pandemic, with strong subscriber growth for some and major advertising declines for others, we wonder what the outlook for the industry is now. What seem to be the long-term effects of the pandemic and what may have just been short-term “blips”?

This morning, NENT released its Q3 results. The Viaplay subscriber base was up 97 000 giving a total of 2,8 M subscribers in the Nordics. Growth is driven mainly by B2B partnerships, though the consumer market continues to play an important role. NENT expects further solid growth towards the end of this year, surpassing 3 M subscribers by 2020 and thereby cementing is role as second largest player on the Nordic streaming market. Expansion into the Baltics is planned for beginning of next year, as part of an ambition to enter 15+ markets in 5+ years. Advertising revenues were down -9% in Q3 and are expected to stay on that level throughout 2020. The market reacted negatively to NENTs report, possibly expecting higher subscriber growth after a positive announcement by the company earlier this fall.

Netflix released its results for the third quarter earlier this week. Following strong reports of massive subscriber growth during the pandemic earlier in 2020, the effects of quarantine now seem to have worn off. The number of paid subscribers grew by 2.2 million in Q3, hence falling short of the 3.3 million predicted by Wall Street analysts. This caused Netflix shares to fall 5% in the after-hours trading. The service added three times as many paid subscribers in Q3 2019 as it did in Q3 2020.

Another global major, Disney, reports positive streaming figures. Although Disney reported a 3.5 billion USD loss in operating revenue in its latest earnings report, mostly related to closed down theme parks, the stock rose 5% in extended trading following CEO Bob Chapek’s announcement of a new streaming service and strong performance of existing streaming platforms – boasting 100 million paid subscribers. Last week, news broke that Disney is accelerating its focus on direct-to-consumer strategy and streaming offerings even further, with a restructure centralizing its media businesses into a single organization that will be responsible for content distribution, ad sales and Disney+. As it seems, increased SVOD/direct-to-consumer focus will be a consistent trend also post Covid-19.

In the Nordics, Telia reports an increase of 54 000 SVOD-subscribers for Cmore (+10% QoQ), following decreasing numbers of subs in Q1 and Q2. The return of sports (after COVID-19 break) is mentioned as a driver of growth – once again proving the high value of sports rights in this market. Telia, in this case, holds the two top tiers in domestic ice hockey in Sweden. Following a Q2 report where the newly acquired TV & Media segment saw significant losses due to loss in advertising sales, the Q3 report offered some improved financial trends. Advertising revenue for TV & Media is still down but improving; -12% in Q3 compared to -31% in Q2.

In conclusion, the pandemic appears to have accelerated streaming growth – though temporarily for some. Mediavision reports diminishing growth rate for SVOD in terms of number of subscribing households and spend for Q3. However, the total number of subscriptions per household continues to increase, driven both by new entrants such as Disney+ and operator streaming services and partnerships. Disney+ attracted approximately 450 000 subscribers in the first two weeks after its release and almost all were existing SVOD households.

Industry Events

Medientage: 28-30 October 2020, Munich, Germany
American Film Market (AFM): 4-11 November 2020, Santa Monica, USA
NEM: 9-11 December 2020, Zagreb, Croatia
MWC Shanghai: 23-25 February 2021, Shanghai, China
MWC Barcelona: 28 June – 1 July 2021, Barcelona, Spain

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**Mediavision will present