Viaplay’s Financial Recovery Plan via Workforce Reduction and Content Restructuring
Viaplay has decided to reduce its workforce by 25%, primarily affecting over 450 employees. Key company members, including the Nordic’s Chief Commercial Officer, Fillipa Wallestam, are expected to be let go.
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Viaplay’s Unfruitful International Attempt
Viaplay, a Swedish-based OTT platform, initially catered to the Nordic regions and gained significant traction with its original content. They decided to explore the international market, hoping to replicate the tremendous success in their home region.
ℹ️ The Nordic Regions are Denmark, Norway, Sweden, Finland, and Iceland, as well as the Faroe Islands, Greenland, and Åland
Viaplay launched its services in the US for a subscription fee of $5.99 last year but didn’t garner the attention from international audiences it had hoped for, owing to competition from other OTT contenders and an off-season in sports.
This resulted in significant losses for the company in the upcoming financial quarters, which has now led to the non-sports tier content in the US and UK.
In addition to launching internationally, Viaplay spent over €1.2 billion a year to produce its original content, but sales growth dropped by 16% to $448 million. As a result, the company’s annual operating losses are predicted to be around $80 – $100 million.
Viaplay’s stock price dropped by 60% during June due to the company’s poor financial performance. Financial results, published on July 20th, reported a loss of $575 million and a loss of 1 million subscribers from its user base.
Viaplay’s Way Forward
Viaplay is now reworking the company’s financial goals for 2023 and 2024.
Anders Jensen replaced Jorgen Madsen Lindemann as the company’s new CEO, and it was stated that certain preemptive actions would be taken based on the second quarter’s financial results.
Viaplay hopes to recover by
- reducing operational costs through layoffs,
- reducing international exposure,
- and slashing its original content’s volume from 40 series or movies to 10 for 2024.
CANAL+ and PPF Group Acquire Stakes in Viaplay
In what might appear as a silver lining, it was also announced that CANAL+ Group, France-based leading Pay TV network in Europe, Asia, and Africa, has acquired a 12% stake in Viaplay Group.
Canal+, which has over 25.5 million subscribers, acquired a 26% stake and invested $300M in one of Asia’s leading OTT platforms, Viu.
This announcement resulted in a 26% increase in Viaplay Group shares, providing relief for its shareholders.
In the latest update, Viaplay Group has closed another deal with the Czech-based investment company PPF Group, which bought a 6.3% stake for an undisclosed value.
Tough Times for Streaming Companies
The global financial meltdown has left no industry untouched, including the entertainment sector.
Earlier, in 2023, The Walt Disney Co. decided to lay off 7000 employees. The company stated that this move would help reduce expenses by $5.5 billion.
Disney’s platform experienced a significant loss of over 4 million subscribers in Q2. This downturn is primarily attributed to the loss of IPL rights to Jio. Despite a 13% rise in the company’s overall revenue, the average monthly revenue per user dropped from $0.74 to $0.59, indicating a challenging financial landscape for the entertainment giant.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
His career has been exclusively dedicated to the growth and development of startups, where he has played a pivotal role. His unique blend of technical knowledge and creative prowess has enabled him to drive innovation and success in every venture he has been a part of.