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Competitive SVoD Segment Driving 7% Value Growth in Denmark's Home Video Market

Video Research, Analysis and Commentary

17 Apr 2019 - The Denmark video market continues to progress strongly, with total spend growing by 7% in 2018 to DKK 10.21 billion (US$1.53 billion), with SVoD driving growth. This has been supported by steady growth in the transactional digital market and robust EST growth, according to the latest video insights market report from Futuresource Consulting.

Multiple Subscription Uptake Fuelling SVoD Growth

SVoD spend maintained over 30% growth in 2018 and is expected to push past the DKK 2 billion mark by the end of 2019, accounting for more than a fifth of total video entertainment consumer spend. “Subscriptions grew by 25% in 2018 to 2.1 million, with three services gaining 100,000 or more subscribers,” says Tanzim Rahman, Research Analyst at Futuresource Consulting. “The SVoD market stands out as a major driver of growth in the video entertainment market, with SVoD consumer spend nearly doubling between 2016 and 2018 and growing by DKK 852 million. Therefore, SVoD accounts for the majority of total growth in the entertainment market over the same period, which saw revenues rise by DKK 1.2 billion.

The SVoD market in Denmark continues to benefit from a competitive landscape, with an attractive range of services from the likes of global players Netflix and HBO to local offerings from Viaplay and TV2 Play, with Netflix leading the market with 39% of subscriptions in 2018. Furthermore, streaming services are supported by a strong broadband environment, with average speeds of 39 Mbps and household broadband penetration at 83%. This has fed into a rising multiple subscription ratio, with households taking more than one service, ultimately fuelling total SVoD subscription growth to a projected 11% per year from 2019-2023. Denmark saw a total of 1.2 million households taking at least one SVoD service, leading to household penetration of 46% in 2018, inline with the Nordic region average which is leading European penetration rates in 2018.

Pay-TV Showing Strength

Pay-TV consumer spend is more than triple SVoD spend in 2018 and saw growth of 2% in 2018 with spend rising to DKK 6.89 billion and the number of subscribers also growing 2% to 2.3 million. “The largest operator, TDC, has experienced significant reorganisation selling parts of its Nordic business and consolidating its core business in Denmark,” added Rahman. “TDC has not seen price rises translate to increasing profit margins due to higher content costs stemming from the inclusion of streaming services into its ‘Bland Selv’ TV package.”

Viaplay & Google Play Driving EST Growth to Rejuvenate Transactional Video from Decline

The transactional video market across both digital and physical formats is expected to decline by 2% in value terms to DKK 554 million, with the physical market declining DKK 57 million and driving the fall. However, from 2019 the transactional segment is expected to see a return to growth, propelled by a progressive EST sector, which will grow 31% to DDK 163 million.

Transactional digital video growth accelerated in 2018 to 16%, with total spend reaching DKK 349 million, although this is just a fifth of the SVoD market. A solid year of EST growth meant that revenues increased by 38% to DKK 124 million, doubling since 2016, and accounted for 35% of the 2018 transactional digital market. “Growth in EST has been driven by Viaplay and Google Play, although iTunes still dominates the market, taking a 57% share of spend,” commented Rahman. “Apple have signed agreements with major TV manufacturers and is expected to consolidate its position over the coming years and help further stimulate the market.”

iVoD continues to grow but at a slower place than EST, with spend growing 18% to DKK 96 million. However, it is driving rental spend and is expected to grow by an average of 16% a year from 2019-2023. Spend in the pay-TV VoD market is expected to gradually decline by an average of 3% a year over the forecast period (2019-2023), with iVoD spend reaching DKK 140 million, overtaking pay-TV VoD spend of DKK 126 million in 2020.

Notes: 

Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com 

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