Scandinavian streamer Viaplay outlined plans on Thursday to focus on its core markets in the Nordics and Netherlands, including the end of streaming services launched in the U.S., Canada and the U.K., and lay off more than 25 percent of staff. The moves are part of broad-based cost-cutting measures amid various business challenges cited by Viaplay’s new CEO.
The company will also consider various strategic options, including a possible sale.
Jorgen Madsen Lindemann, who replaced Anders Jensen as CEO of the pan-Nordic streaming group in June, had recently warned that 2023 revenue and earnings would come in sharply below previous forecasts and that cost-cutting would be needed. His team at the time also pulled the firm’s previously unveiled full-year 2023 outlook after a review of its operations and performance.
Viaplay back then also said it would be taking “a broad range of actions to address the underlying deterioration in earnings,” including job and other cost cuts, the renegotiation of deals with distribution partners, as well as a “review of the international operations and non-core assets.”
The Viaplay CEO said in an update on Thursday: “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 (which make available a wide range of Viaplay series, films and documentaries through partners around the world); implementing a new operational model; downsizing, partnering or exiting our other international markets; rightsizing and pricing our product offering in the Nordics; undertaking a major cost reduction program; and conducting an immediate strategic review of the entire business to consider all options, including content sublicensing, asset disposals, equity injections or the sale of the whole group.”
Emphasizing that the firm was “moving quickly” to address various challenges, Lindemann said: “The content investments that have been made are not all paying off, and are committed in the short and medium term. Furthermore, the pursuit of subscriber volume growth has been at the cost of value, especially when it comes to our partner agreements. The weakness in the advertising markets and currency exchange rates are additional factors that we must live with. The international expansion assumptions, including the timelines to profitability, have also been pushed materially into the future since the expansion started.”
The streaming service had ended 2022 with more than 7.3 million subscribers, with 37 percent, or nearly 2.7 million, of them being outside the Nordics, namely the Baltic countries, the U.K., Poland and the Netherlands. Earlier this year, Viaplay debuted in the U.S., followed by a launch in Canada. But on Thursday, the company reported “higher quarter-over-quarter losses for the international operations due to the content investments that we have made, the consolidation of the U.K. operation and the launches in North America.”