Shares in Swedish Netflix competitor Viaplay dropped by 60 percent this week.
Swedish streaming platform Viaplay is in big trouble. Reuters reports that Viaplay shares fell by a whopping 60 percent Monday, leading the company’s CEO to step down. The Netflix competitor was forced to lower its short-term organic sales growth projections for 2023, down from 24-26 percent to 16-17.5 percent, in the wake of its poor stock market performance.
Former CEO Anders Jensen is handing the reins over to Jorgen Madsen Lindemann, former CEO of gaming and esports group MTG, effective immediately. Jensen released a statement in which he claimed Viaplay would be best served without him in charge “in the light of current challenges.”
Viaplay operates in 33 markets, including the USA and Canada, as well as Austria and Germany. Rival Netflix might be the bigger name—at least in the US and Canada—but the company is rapidly expanding thanks to a mix of original programming and premium sports, such as the English Premier League and Formula 1 racing.
Unfortunately, that rapid expansion may be in danger of slowing down, as evidenced by Viaplay’s stock dropping. The company blames the rising cost of living and a lower demand for streaming, both in Nordic and international markets. The company also cites lower subscription sales and a sudden reduction in Scandinavian TV and radio advertising markets as reasons for declining business at home, although they insist that interest in foreign markets is still increasing.
Monday’s plummeting shares are a far cry from what Viaplay was predicting just a couple of months ago. The Swedish Netflix clone claimed back in April that the company was performing in line with its predictions and maintaining a strong momentum despite a shaky economy. Viaplay did, however, predict some dropoff in 2023, leading to a profit warning being issued to shareholders late last year.
Sadly, Monday’s drop still caught Viaplay by surprise, as they stated in a note to clients. The sheer size and scope of this week’s drop in stock value were far beyond what the company had prepared for. The streamer is now predicting an operating loss between $23 million-$27.6 million in the second quarter.
Competitors like Netflix and Disney+ won’t know just how badly Viaplay is suffering until the company releases its second-quarter results on July 20, but they can assume it’s not good. Viaplay is hoping to release a medium-term outlook of the brand’s future once those results drop. Currently, the company is expecting a second-quarter sales figure of between $411,774,390 million and $421,090,900 million and an increase in subscribers from 7.6 million to 7.7 million.
Viaplay is far from the only streamer experiencing financial difficulties. In April, Viaplay rival Netflix reported a loss of subscribers for the first time in more than a decade. Competitor Disney+ lost 4 million subscribers in the first quarter of 2023 and posted an operating loss of $659 million during its second quarter. Meanwhile, another major player in the streaming wars, Max—formally HBO Max, itself formally HBO Go—is pulling content left and right while suffering an identity crisis.
Could all of the streamers’ financial woes simply be a by-product of an overall suffering post-pandemic economy, or is there another more specific reason? Only time will tell.
In the meantime, Viaplay could always follow Disney, Discovery, Paramount, and Apple by putting a plus sign after their name. It won’t necessarily erase all of Viaplay’s money troubles, but rebranding as Viaplay+ certainly couldn’t hurt.