Video entertainment in Northern Europe continues to go from strength to strength, with Denmark, Norway, Sweden and Finland enjoying combined revenues of $6.6 billion in 2022 across digital video entertainment. This figure shows an 11% YoY increase for the four countries, according to Futuresource Consulting’s latest research on the landscape.
By 2027, the total market is projected to reach heights of almost $8 billion, with Sweden responsible for 30% of that, and Denmark 29%.
“Despite SVoD driving the lion’s share of growth, Pay-TV remains the backbone of digital video entertainment in the Nordics,” says Anastasia Budash, Lead Market Analyst at Futuresource Consulting. “Pay-TV generated over half of the total market spend in 2022, and the flexibility operators demonstrate in adapting to the market’s new challenges suggests consumers won’t be abandoning the service anytime soon.”
An update on Futuresource’s previous estimates shows more stability for Pay-TV across the region. Bundling and aggregation ubiquitously adopted by telco and Pay-TV operators are redirecting consumers to IP-based delivery methods and are simultaneously stimulating SVoD uptake.
“By 2027, Pay-TV will remain the number one revenue generator in Norway and Finland with SVoD closing in. Across Sweden and Denmark, spend on subscription services will have just surpassed that of Pay-TV.” says Budash.
SVoD is the main growth driver of digital video entertainment in the Nordics, with double-digit growth witnessed across all four nations in 2022. The pandemic and the launch of new services over the past few years have catapulted SVoD to new heights. Price increases of some players, coupled with increased visibility and simplified adoption through telco bundles and aggregation apps, will continue contributing to this fertile landscape.
While the segment is forecast to grow steadily, with increasing market saturation and subscriber churn it will come at a slower pace than before. “CAGR estimates for 2023-2027 range from 5% in Norway to 7% in Denmark,” says Budash.
While Netflix remains the top SVoD provider in the region, local players are increasingly closing the gap. TV 2 Play and Viaplay now share the leading position with Netflix in Denmark and Norway respectively. Netflix has the edge for mass-market appeal, but Nordic players win out for local content and live sports. This is giving them a competitive advantage over the international providers.
“International players are beginning to understand the growing importance of local content, and in the near future, we expect to see an increase in both co-productions with local studios and acquisitions of ready-made titles for local and international distribution. But it’s also a significant part of local economies. 2022 in Denmark was marked by the ‘streaming conflict’, with the three major players – TV 2, Viaplay and Netflix – halting their productions in the country for almost the whole year, costing the industry over 200 million euros.” says Budash.
After a trying 2021, recovery is now in the grasp of the digital transactional segment – thanks primarily to an exceptionally rich new release slate. Growth currently remains tentative. Finland saw an incremental rise of 1% and Sweden topped this figure at 4%, but the welcomed comeback of transactional is reflecting a landscape with more space and buoyancy.
With the growth generated from movies in theatre and box office revenues heading back to familiar levels, the biggest new releases are retaining their transactional appeal, while smaller new releases are yet to find their place. Through tailoring their content and service offering, local retailers have enjoyed the most gains in consumer engagement.
At the recent Nordic Digital Entertainment Tradeshow, Futuresource Consulting’s Principal Analyst for Entertainment James Duvall spoke to an audience of US studios, local content distributors and retailers about the region’s outlook. In light of the event, Duvall said, “There’s evidently a wealth of opportunities available within the sector. The collaboration of industry figures plus the renewed consumer-led approach is helping drive a healthier and more flexible landscape.”
Futuresource’s latest round of research provides an eagle-eye view of video entertainment in the Nordic region. For more information, please contact Leon at leon.morris@futuresource-hq.com.
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