The analyst points out that Netflix and Disney also previously had to issue a profit warning.
The financial difficulties of Viaplay, which has acquired the rights to several top sports series in Finland, are yet another indication of the rebellious spirit of TV viewers.
This is what the analyst thinks Tero Kuittinen. The Finn, who has lived in New York for two decades, has closely followed the development of Netflix and Disney, among others.
US streaming services are partly Viaplay’s competitors even if they don’t show live sports.
The future of Viaplay, which is listed on the Stockholm stock exchange, looked good in the eyes of investors before and the company aimed for strong growth, but the latest data from Monday were harsh. The result for the second quarter of this year is even 21.4–25.7 million euros in loss.
According to the most recent estimate, the operating result for the whole year is also about to remain in the red.
3 billion disappeared
The bigger ones in front, the smaller ones behind.
– The rosy future of streaming services has also hit a wall in America, says Kuittinen.
Disney’s stock price peaked in early March 2021 and Netflix’s in October 2021. Both fell sharply after that.
– Netflix and Disney were both forced into really blunt profit warnings when subscriber growth suddenly stopped. The interesting thing here is that both have typically been very accurate forecasters, says Kuittinen.
Viaplay’s announcement on Monday also came as a shock to investors and was, in hockey terms, like an open-ended tackle from a blind corner.
– The reactions to Viaplay’s events are some of the most brutal I have witnessed in the past 20 years in the media industry, editor-in-chief of the Norwegian magazine Kampanje Knut Kristian Hauger in turn said in Norwegian media.
– The share collapsed completely, and approximately 850 million euros disappeared from the market value in an instant, Hauger calculated.
If compared to the peaks of October 2021, the readings are even worse. Viaplay’s market value has dropped from around 3.5 billion euros to 500 million.
The cost of living has risen, and according to estimates, it is clearly more difficult for streaming services to acquire new customers than before.
Efforts have been made to correct this by sending existing customers larger invoices.
Viaplay monthly subscribers have two options. You can watch series and movies for 12.99 euros. The package containing the sports series is currently 44.99 euros per month.
In addition to the price of the sports package, consumers were outraged earlier this year that with the company’s recent change, the same live sports event can only be watched on one device at a time.
In practice, two people from the same household cannot watch, for example, the same Premier League match at home and on the way to work. On the other hand, illegal sharing of identifiers outside of one’s own economy has been a big problem for streaming services.
– Consumption behavior has changed quite sharply since the pandemic, and there are signs of a rebellion. When many households have 3–5 streaming services, the termination of one or two is very sensitive when the food bills grow, Kuittinen reflects.
– Customers are much less loyal than many assumed.