Modern Times Group will aim to make roughly SEK600 million (US$73.6 million) in savings this year as it continues to evolves from a “traditional broadcaster into a digital entertainment company”.
In its 2015 annual report, MTG president and CEO Jørgen Madsen Lindemann said that the company has changed the way it works, transformed the business and identified SEK600 million of savings – “the majority of which will flow through in 2016”.
These savings will be used to fund MTG’s ongoing investments in content and technology, and to help offset the ongoing currency headwinds, according to Lindemann.
Commenting on MTG’s 2015 sale of its 38% stake in Russia’s CTC Media, its Ukrainian satellite TV platform, TV distribution companies in Sweden and “sub-scale operations in Hungary”, Lindemann said this reflects a shift in strategic focus away from the geographical expansion of its broadcasting operations.
Instead, MTG now aims to establish “category leadership in complementary digital entertainment verticals” that have global potential, he said.
“Our relevance as an entertainer requires us to not just follow the behaviour of our existing consumers but also to identify new products to attract new audiences,” he added.
Lindemann said that MTG 2015 investment in Swedish MCN Splay, and its purchase last year of a 51% stake in European MCN Zoomin.TV, addresses the shift in millennial viewing primarily to social media entertainment platforms or multi-channel networks.
Last year MTG also bought 74% of esports company Turtle Entertainment and 100% of Scandinavian esports operator DreamHack.
“These new digital businesses have already grown much faster than expected when we bought them, and doubled their sales to almost SEK1 billion in 2015 on a pro forma basis,” said Lindemann.
“2015 was a year of major change for MTG, as we accelerated the pace of our strategic transformation from a traditional broadcaster into a digital entertainment company. We have a clear ambition to be not only the number one digital video entertainer in each of our markets, but also a global player in key digital verticals.
“The moves that we are making right now are leading the way in the industry, as we adjust our core business to new consumption models, and add complementary online businesses that will shape the future of entertainment.”
Last August MTG said it would axe around 300 jobs in a restructuring programme that cost it SEK700 million in its third quarter. The cuts were made across MTG’s operations in Sweden, Norway, Denmark and the UK.