Viaplay’s CEO Ousted and Profits Warned
Viaplay, the European streaming service, has announced the departure of its CEO, Anders Jensen and warned of a significant decline in profits sending shares of the Swedish group down by over 50%. The company’s expectation of an operating loss of SKr400mn-SKr700mn and withdreawal of its long-term forecast for growth in sales, subscribers, and profits can be attributed to various factors including lower demand for streaming subscriptions, an “accelerated deterioration” in Nordic TV, and radio advertising, and a slowdown in cost-cutting programmes. This article explores the implications of Viaplay’s management changes and decline in profits, examines the current streaming services landscape in Europe, and offers potential recommendations for the company to improve their business.
Viaplay’s Management Change and Implications
Viaplay announced the departure of its CEO, Anders Jensen, who has been replaced by Jörgen Madsen Lindemann, the former head of MTG, the former parent company of Viaplay. The news of the change in management comes as a surprise to investors who viewed Jensen as essential in driving up subscriber growth and revenue. However, with declining profits, the company’s board of directors decided to make changes to its leadership. Lindemann brings to the helm of Viaplay a wealth of operational and strategic expertise in the media and streaming services industry.
The change in Viaplay’s CEO raises questions about the direction of the company’s business strategy and its ability to compete in the European streaming services market. Jensen was instrumental in driving up subscriber growth and revenue for Viaplay. Still, with the decline in profits, it seems that his strategy has failed to bear fruit in the current market context. Lindemann will need to assess the company’s current position and make strategic decisions on the direction of Viaplay’s growth and profitability.
Current Streaming Services in Europe
The streaming services market in Europe has been continuously growing in recent years. According to a report by Digital TV Research, the over-the-top (OTT) subscriptions in Western Europe is expected to double between 2019 and 2025, raising the region’s subscription revenue to $23 billion by 2025. Despite the market’s growth, the space is becoming increasingly crowded with companies such as Netflix, Amazon Prime Video, HBO Max, and Disney+ and other regional players competing for a share of the market.
Viaplay’s position in the European streaming market can be attributed to its focus on delivering Nordic content to its subscribers. The company has forged partnerships with broadcasters and content creators in the region to offer original programming such as ‘The Lawyer’ and ‘The Truth Will Out.’ With the increasing competition in the streaming space, it is unclear whether Viaplay’s focus on Nordic content would be enough to attract and retain subscribers.
Potential Recommendations for Viaplay
Viaplay’s decline in profits highlights the need for the company to reassess its business strategy. Here are some potential recommendations for the company:
1. Expand Content Library: As the streaming space becomes increasingly crowded, companies must offer a diverse library of content to attract and retain subscribers. Viaplay could consider expanding its content library beyond Nordic programming to include popular international content.
2. Focus on Original Programming: Viaplay has had success with its original programming such as ‘The Lawyer’ and ‘The Truth Will Out’, and the company could focus on producing more of such quality content. This would set the company apart from its competitors and give subscribers a reason to stick with Viaplay.
3. Invest in Marketing: Viaplay could invest in marketing efforts to raise brand awareness and attract new subscribers. This could include partnerships with influencers, targeted social media campaigns, and other promotional activities.
4. Optimize Cost-Cutting Strategies: Viaplay’s profit margins could be improved by optimizing their cost-cutting strategies. The company could explore innovative ways to reduce operational costs while maintaining the quality of its content and services.
Summary
Viaplay’s CEO was ousted and the company warned investors of declining profits. The company’s decline can be attributed to multiple factors, including lower demand for streaming subscriptions, an “accelerated deterioration” in Nordic TV and radio advertising, and cost-cutting programs. Viaplay’s focus on Nordic content is no longer enough to compete in the current streaming market of Europe, and the company needs to consider other strategies. This could include expanding the content library, focusing on original programming, investing in marketing and optimizing cost-cutting programs.
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European streaming service Viaplay ousted its chief executive and warned about profits, sending shares of the group known for Nordic dramas down more than 50%.
In a press release issued early Monday, Viaplay said that Anders Jensen will be replaced as chief executive officer by Jorgen Madsen Lindemann, the former head of MTG, the former parent company of Viaplay.
The Swedish group, which saw itself as a European rival to Netflix, said it now expects to report an operating loss of SKr400mn-SKr700mn ($37mn-$65mn) and withdrew its long-term forecast for growth in sales, subscribers and profits.
It blamed factors including lower demand for streaming subscriptions, an “accelerated deterioration” in Nordic TV and radio advertising, and a slowdown in its cost-cutting programme.
Shares of the company plunged nearly 60% in early trading on Monday.
https://www.ft.com/content/a899e14a-2961-4012-b657-69b961586f45
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