Scandinavian streaming platform Viaplay has increased its subscriber base by 78% in the third quarter of the year to 6.4 million as the company continues its international expansion which is “performing ahead of plan.”
Viaplay added 879,000 new paying subscribers for the quarter and reported a 25% revenue growth of almost SEK4 million ($353,000), up 30% from the previous quarter.
This was driven by Viaplay revenues (47% of sales), which were up 64% on an organic basis.
For the nine-month period in 2022, the company has seen an 18% rise in revenue to SEK11 million.
At the end of the third quarter, Viaplay had 4.23 million customers in the Nordic region.
Viaplay said its 28% year-on-year (YoY) growth in subscribers in the Nordics was driven by its third-party B2B distribution partnerships, as well as lower churn levels.
However, the platform admitted its subscriber base in Norway is increasing “at a slower pace than anticipated” but is “building” following the inclusion of English soccer’s Premier League in August. Sales for Viaplay in the Nordics were up 27% on an organic basis.
The international Viaplay operations added 685,000 subscribers in the quarter, which was more than double the number of subscribers added in the previous quarter.
The addition of Premier League rights in Poland and the Netherlands contributed to the growth, together with the new distribution agreement in Poland.
Linear subscription and other revenues (32% of sales) were up 9% YoY on an organic basis. The growth in linear channel subscription sales followed the “upward price adjustments to reflect the addition of new content, as well as the extension of almost all distribution agreements in Norway to include Premier League coverage.”
Advertising revenues (21% of sales) were down 3% YoY on an organic basis, and “reflected the weaker development in the linear TV advertising market conditions, which was offset to an extent by the continued growth in the radio advertising markets.”
Notably, in the quarter, Viaplay completed its acquisition of Irish pay-TV operator Premier Sports earlier this month (October) and announced it will launch its streaming service in the UK on November 1.
The deal for Premier Sports, valued at £30 million on a cash and debt-free basis, received Irish media merger control clearance, and it sees Viaplay take on the various sporting rights held by the broadcaster, as well as the Dublin-based company’s 220,000 customers and 23 full-time employees.
Following the completion of the deal, Viaplay is raising its year-end international subscriber target from approximately 2.5 million to 2.7 million.
At the same time, the company is reducing its year-end Nordic target from 4.8 million to 4.6 million. Its group target is therefore unchanged at 7.3 million.
Viaplay has reported an adjusted operating profit of minus SEK 100 million for the third quarter of 2022.
Anders Jensen, Viaplay president and chief executive, said: “The international operations are performing ahead of plan, and we reached the important milestone of more than 1 million subscribers in both the Dutch and Polish markets.
“However, this international performance was offset by the rate of direct-to-consumer subscription and ARPU (average revenue per user) growth in the Nordics, which was lower than anticipated.”
“These adjustments to our short-term targets, and the addition of Premier Sports, also affect our long-term targets. Our international operations are now expected to be profitable on an annual basis in 2024 – one year ahead of schedule. This is due to a combination of higher sales growth than originally projected, and the prioritization of investments in Poland, the Netherlands, and the UK.
He continued: “Our Nordic operations are now expected to grow their revenues at a slower rate moving forward. We will embark on a substantial cost-saving program in 2023, in order to deliver these targets by offsetting some of the operating and currency headwinds that we face.
“We remain fully funded for our expansion and have full visibility over our forward content costs. We are also taking steps to accelerate our growth where momentum is strong.”