Nordic Video Markets Riding High, SVoD Accelerates and Transactional Video Returns to Growth

Video Entertainment Market Insights and Commentary

The Nordic video markets are some of the strongest and most progressive in the world. Sweden, Denmark, Norway and Finland enjoy high penetration of superfast broadband, wide adoption of the English language, a thirst for entertainment and a high level of disposable income. According to new reports from Futuresource Consulting, not only are consumers in the region subscribing to multiple SVoD services, but they are also driving a return to growth for the transactional video market.

Transactional Video Defies Downward Pressure

“To see transactional video shifting course and moving into a growth phase is something of a rarity,” says Tristan Veale, Market Analyst at Futuresource Consulting. “These countries are expected to be amongst the first markets to experience the reversal, a direct result of changing consumer behaviour in the face of COVID-19. We expect transactional video buying or renting across DVD, Blu-ray and digital to grow by 4% in 2020, the second consecutive year of growth. Whereas globally, DVD and Blu-ray declines typically tend to outweigh any digital growth. The biggest player in the digital transactional space remains Apple, though key growth service Viaplay is successfully upselling transactional video to its existing subscriber base and is a close second.”

SVoD Leads the Way

Despite the rise in transactional video, the market is dominated by SVoD, which accounted for 80% of Nordic home video spend in 2019, with Netflix, Viaplay and HBO Nordic the standout services.

“The Nordic love affair with SVoD continues to blossom,” says Veale. “In 2019, for every dollar spent on transactional video, four dollars were spent on SVoD. Yet, there is plenty more opportunity for growth. With three major established services in the shape of Netflix, HBO Nordic and Viaplay, and new entrant Apple TV +, which launched in Q3 2019, plus the upcoming Disney+ launch, we expect subscriptions and spend to be pushed to a whole new level.”

On Netflix subscriptions alone, consumers across Sweden, Norway, Denmark and Finland spent over half a billion dollars in 2019 and Netflix remains the leading SVoD provider, but it is slowly approaching saturation, as over half of all households across these four Nordics have a subscription.

NENT Group a Rising Force

“The one to watch is NENT Group,” says Veale, “which is building a media conglomerate across the Nordics. The group owns Viaplay, and Viasat, the satellite Pay-TV and IPTV provider. As of 30 April, NENT Group has also been given approval to merge Viasat operations with Telenor’s Canal Digital satellite operation in a new joint venture, Allente, with ownership shared equally between both parties. This is a significant market move, delivering a new entity with a commanding market position. Not only will this bring economies of scale into play and produce a raft of cost savings, it will also offer TV distribution via satellite, streaming services and IPTV services, as well as delivering fibre broadband to 1.2 million customers across Norway, Finland, Denmark and Sweden. What’s more, NENT group has entered into an agreement that Viaplay will be available to Allente subscribers and Canal Digital subscribers, boosting the reach of the SVoD and TVoD service even further.”

NENT Group’s move to join forces and reduce costs, as well as shore up OTT revenues, comes at a good time. Pay-TV services across the Nordics are expected to see a fall in subscription revenue and advertising revenue because of COVID-19 impacting the ability to air key content such as sports and delayed TV series. However, the long-term outlook for Pay-TV seems solid.

For further information on this Futuresource Consulting report, please contact Kailash Morjaria via kailash.morjaria@futuresource-hq.com.

About the author

Tristan Veale

Throughout Tristan’s career he has provided thought leading research and insights on the consumption of Motion Pictures, Film and TV series. Now positioned as a leading analyst within the TV and Video content research team at Futuresource Consulting, Tristan informs content creators, distributors and CE manufacturers on the shifting and fragmenting media landscape, helping Futuresource’s clients stay up to date in terms of what consumers want to watch, where they want to watch it, and on which devices.