2020 is (finally) coming to an end. Many are longing for new and better times, and hopefully a lot healthier. In this year’s last newsletter, we are happy to present the Mediavision Industry Outlook 2021. We have asked our readers and industry stakeholders to reflect on the Nordic media market. What to expect of 2021 and the coming years?

This has been a year filled with many twists and turns, which no one could have anticipated (“think the unthinkable”). When we conducted last year’s industry survey, there were no signs of an approaching pandemic. With that in mind, we can still conclude that the overall predictions weren’t that far off. Covid-19 has merely accelerated the trends that were pointed out in the survey.

Three major trends in the Mediavision Industry Outlook as of last year, 2020:

• Weakened economy, expected to pressure the advertising market
• Continued and strong transformation, pushing media consumption to online
• Increased consolidation, as competition over streaming consumers is ramping up

Weakened economy with severe effect on the ad markets
The pandemic pushed the world into an economic downturn of a magnitude no one could have expected. The Nordics saw GDP declining as much as -5%. The 2021 outlook on the other hand is quite positive, with expected average growth of +3% for the region. This is also what most of the respondents in the survey predict.

By now we all know that the advertising market was hit really hard by the pandemic, the Nordics being no exception. The average Nordic ad market turnover loss was more than 10% during the first half of 2020 (YOY). For traditional TV, the decline ranges between 10-25% among our countries, while AVOD proved quite resilient. In Sweden, AVOD now accounts for almost 30% of total video (online + TV) ad revenues, while attaining a smaller share in the other Nordic countries. Looking towards 2025, the Industry Outlook points at a 50/50 split between traditional TV advertising and AVOD, as a Nordic average, i.e. quite a strong growth is expected by the industry itself.

Sources: 1. Barncancerfonden 2. Vitusapotek

If we instead turn to the Nordic households, Mediavision has already concluded that so far, media spend appears mostly unaffected by the economic downturn. However, some media categories, like cinema, have been highly affected both by restrictions and few new films. Spend on cinema has dropped 51% on average in the Nordics during fall 2020 (albeit an increase from the loss in spring, as several theatres were reopened). Our analysis points at a re-allocation of household media spend – and this is also the opinion among industry stakeholders. The Mediavision Industry Outlook 2021 points at a decline in pay TV and cinema spend, while streaming video, podcasts and audio books are expected to increase. This could maybe be illustrated by Warner Media, planning to premiere blockbusters like “Dune” and “The Matrix 4” on its streaming service HBO Max in the US. Nothing is said about the Nordics – however it shows the obvious challenges of the cinema business, come spring 2021.

Digital transformation accelerated by the pandemic
Maybe the strongest trend of the last decade – here as elsewhere – has been the transition from traditional to online TV. Even though the TV screen is still an important device in most homes, the glossy on-screen floors have been replaced by dragons, crowns and chess boards. During spring of 2020, strongly related to the pandemic, traditional TV viewing temporarily increased throughout the region (and we all consumed news at record levels). But to no surprise, the increase faded, and the underlying trend was back during fall. The Mediavision Industry Outlook 2021 points at a general view: The decline will continue.

Focusing on online video, the pandemic has likely accelerated the speed of transition. Daily reach has increased across the whole region which is also true for the household uptake of SVOD. Close to 60% of the Nordic households now subscribe to at least one paid service. According to the Mediavision Industry Outlook 2021, SVOD is predicted a continued growth, at the expense of traditional pay TV.

But not only video thrived during the lockdowns. There has also been a strong increase of interest in news, likely sparked by the pandemic. The result? A significant growth of digital newspaper subscriptions in the Nordics. Today, 2 million households subscribe to a digital newspaper; an increase of almost 300 thousand households in a year.

Competition has increased – and will continue to do so
The Nordics is both a mature and highly competitive media market. During 2020 we saw the launch of several new video services (Disney+ being one good example) as well as consolidation (Telia + TV4, Viasat + Canal Digital = Allente). Digital text and audio companies have also been very active. So, what’s next? The industry stakeholders believe that the Nordic consolidation trend will prevail on the media market (audio/video/text). Companies will continue to look for new partners. And in parallel, even more global services are expected to enter the Nordic market. Not a bold guess, as the Nordic launch of HBO Max has been announced for 2021. And maybe we’ll see increased activity from Amazon Prime Video?

Another observation is that cost of content – certainly sports – is skyrocketing. We asked the industry whether it believes that consumer prices for sports packages will increase or not as the newly negotiated rights come into play. The answer is: Yes, we are likely to see price hikes between 10-25%.

Moving on to the highly interesting podcast industry! Amazon, Apple and Spotify are competing intensely, buying content producers and making exclusive content deals on a global scale. But other actors, like Nent, Bauer Media, and public service are also increasing their efforts. Through influencer-driven “talk casts”, dramatic retellings of high-profile murder cases (to mention some genres), podcast listening is growing fast. However, revenues are still marginal. Our respondents overwhelmingly believe that the podcast industry will need to be financed through both advertising and pay revenues in order to secure stable profits.

This concludes the top findings from the Mediavision Industry Outlook 2021. If you wish to get more details, please get back to us.

From all of us to all of you – we wish you happy holidays! We’ll be back in January.

For the full story of the Mediavision Industry Outlook 2021, send a request to julia.gotborg@mediavision.se.