Viaplay, the embattled Nordic streaming service, is undergoing significant changes as it withdraws from the U.S. and UK markets and considers a potential sale. The company’s Q2 results showed improvement compared to last year, but unfortunately, this progress comes at the cost of letting go of over 25% of its workforce. Jørgen Madsen Lindemann, the new CEO who recently replaced Anders Jensen, expressed his regret over this decision. The layoffs will affect approximately 450 employees and result in restructuring costs of around 45M Swedish Krona ($4M). Lindemann will address investors and journalists in the coming hours to provide further details. This announcement coincides with Germany’s ProSiebenSat.1’s announcement of cutting around 400 jobs.
Moving forward, Viaplay will discontinue its low-tier non-sports offerings in the U.S. and UK and shift its focus to the Nordic and Dutch markets. Additionally, the company plans to sell its content internationally through Viaplay Select. Viaplay will continue to prioritize Nordic originals, including upcoming series such as “Ronja the Robber’s Daughter,” Lasse Hallström’s “Hilma” biopic, and a three-season English-language TV series based on Camilla Läckberg and Henrik Fexeus’ bestselling crime novels. The company will also maintain its focus on sports rights.
Under Jensen’s leadership, Viaplay had expanded into the UK, U.S., and other markets, including Germany, with projects like the high-profile “Rebus” reboot. However, the company is now retrenching to concentrate on its core markets and distribution. Jensen acknowledged that international expansion plans, including profitability timelines, have been significantly delayed, and the company is working swiftly to address these challenges.
Lindemann has initiated a strategic review of the entire business, exploring all options, including equity injections or a potential sale of the entire group. Last month, an operating model restructure was implemented, with a team of Nordic-based executives assuming responsibility for local segments and optimizing their organizations. Lindemann stated, “We are today announcing a new strategy and plan, which includes, but is not limited to, focusing on our core Nordic, Netherlands, and Viaplay Select operations; implementing a new operational model; downsizing, partnering, or exiting our other international markets; rightsizing and pricing our product offering in the Nordics; and undertaking a major cost reduction program.”
Despite the difficult decision to downsize, Viaplay remains committed to securing the future of its business. In Q2, the company achieved sales of approximately 4.6BN Swedish Krona ($450M), a 16% increase compared to the previous year, driven by 42% organic sales growth. However, advertising revenues declined by 16%. Operating income decreased by 6.5B Swedish Krona ($630M), resulting in a net income of minus 5.8B Swedish Krona ($560M) for the period. Viaplay also experienced a loss of approximately 1 million subscribers, bringing the total to around 6.6 million, similar to Q3 2022.
Viaplay has revised its financial targets and recently published new financial goals for 2023 and 2024. The company anticipates an EBIT loss of approximately $90M this year, with the potential to return to profitability next year. Sales are projected to reach around $1.8B for both this year and next, while subscriber numbers are expected to surpass 7 million this year, although figures for 2024 have not been disclosed.
