TBI Tech & Analysis: Behind Viaplay’s cost-cutting measures

Furia

With Viaplay taking drastic measures to save its business earlier this month, Omdia’s Matthew Evenson explores where things went wrong for the Nordic firm.

In its 2Q23 results, Viaplay Group announced plans to downsize its operations following a loss of over one million Viaplay subscribers in the quarter.

The company, behind shows such as Danish crime drama Trom, Norwegian thriller Furia and Swedish drama Threesome, said that it would downsize or exit some of its international markets, cut more than 25% of its staff, and undertake a full strategic review.

Soon after this results release, it was announced that Canal+ had taken a 12% stake in Viaplay.

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Viaplay has enjoyed continued subscriber growth both in the Nordic countries and outside of its home region since its international expansion began in earnest in 3Q21, when the service launched in Poland, and continued through 2022 with launches in the Netherlands, the UK, and the US.

As is the case across the wider industry, many streamers are being forced to tackle their rising spend amid slowing subscriber growth and a cautious global economic outlook. As a comparatively smaller player in the field still seeking to expand globally, Viaplay was perhaps at the forefront of these challenges.

The company cited sports leagues’ off-season churn and the phasing out of poorer value partnership campaigns as reasons for the subscriber decline, while market expansion and both sport and non-sport content investments were said to be behind the rise in operating expenses.

Viaplay’s plan to use popular sports leagues and events to drive subscriber sign-ups looks to have worked. However, that strategy seemed at odds with its non-sports content, which primarily consists of Nordic scripted drama.

A service targeting two distinct and not obviously complementary audiences was always going to struggle to compete alongside the abundance of more generalist services that offer a broader range of content.

This piece was adapted from the impact brief ‘Viaplay downsizes to focus on main Nordic markets’, written by Omdia research analyst, media and entertainment, Matthew Evenson, which is available to read here (with a subscription).