September 26, 2019 / 6:31 PM / 23 days ago

Sweden's NENT sees reasons to be cheerful about streaming war

STOCKHOLM (Reuters) - Sweden’s Nordic Entertainment Group (NENT) thinks it can benefit from the battle of the big global firms in the streaming market by building partnerships with the likes of Walt Disney rather than being exposed to tougher competition.

FILE PHOTO: Nordic Entertainment Group (NENT) sign is seen at their headquarters in Stockholm, Sweden October 1, 2018. REUTERS/Olof Swahnberg/File Photo

NENT aims to boost its already strong market share in the Nordics, while scaling back its reliance on the popular bleak Nordic Noir crime dramas in favour of more cheerful programmes.

The global market for video streaming, now dominated by Netflix Inc, is about to get more crowded with the Apple TV+ streaming service and Walt Disney Co’s Disney+ launching in November.

Rather than being crushed by the competition, NENT Chief Executive Anders Jensen sees potential for new or deeper relationships as a consequence.

“It’s more of a clash between giants,” he told Reuters in an interview, saying that Disney could be happy to do a deal with NENT that the U.S company would not permit with a global rival.

A new partnership would not necessarily focus on NENT buying content from Disney, as the Swedish company currently does under a long-term, non-exclusive, agreement, Jensen said.

“(It’s)..more maybe on how we take our respective services, Disney+ and Viaplay, and find a way to cooperate there. That would be completely new, we have not done that before,” he said, declining to elaborate further.

Analysts from DNB Markets said in a research note this month that NENT could strengthen ties with partners over the next year or so.

“To illustrate, NENT could provide Disney with a minimum guarantee deal where its Viaplay subscribers have the opportunity to buy Disney+ at a discount...,” it said.

SWEDISH SPIN OFF

Jensen said NENT, spun off from Swedish media group MTG in March, is also increasing the number of its studios in Britain to help it work with companies such as Comcast-owned Sky, on developing content.

“NBC said it will use Sky as its main vehicle to get content from Europe. Of course we would like to be on that bus,” he said, adding there are several potential partners in the UK. 

NENT offers free and pay TV, radio, advertising-based streaming service Viafree and subscriber-based streaming service Viaplay. Its hit shows include Swedish/Danish crime drama “The Lawyer”, and it also owns the local rights to UEFA Champions League and Premier League soccer.

Viaplay, NENT’s biggest growth-driver, has almost 2 million total subscribers and the firm expects to add at least 250,000 this year, versus 170,000 in 2018.

Local competitors include Bonnier Broadcasting’s C More, Discovery’s Dplay, and Swedish state-owned SVT.

NENT, whose shares have risen around 10% since its listing, estimates that it currently has a Nordic market share of 25-30%.

“Despite rising competition, NENT’s content leadership and growth initiatives should be sufficient for further market share gains,” DNB Markets said in the note. It has a “buy” recommendation.

TIME TO LIGHTEN UP

Nordic markets have the highest rates of subscription video-on-demand uptake in Europe but Netflix’s market share is only 47% versus an average of 70% in the rest of Western Europe, according to research firm Ampere Analysis.

Key to local producers, including NENT, are Nordic Noir crime stories set in Scandinavia with bleak landscapes and shocking violence - captured in dramas such as “The Bridge” and “The Girl with the Dragon Tattoo”.

But Jensen believes it is time to lighten up a little.

“There is a limit for how many depressed, drinking detectives people can take to heart,” Jensen said.

“I think all of us, in the world we live in, maybe want to see something not completely dark.”

Reporting by Helena Soderpalm; Editing by Keith Weir and Elaine Hardcastle

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