OTT now represents one third of total TV subscriptions in the Nordics

In the Nordics, the pay TV landscape has changed considerably since the introduction of OTT services. The region was a testbed for some of the most popular streaming services when they first addressed the European market, with Netflix and HBO available there since 2012 already. Ten years later, one can easily see how the early adoption of streaming services and its impact on content viewing consumption gave a digital makeover to the local TV distribution industry.

The region historically counted as one of the most developed pay TV markets in Europe, with virtually every household subscribing to a paying TV service, and an average monthly revenue per household of €25 in 2015. But a growing number of households in the region have been pulling the plug on their traditional TV plans in favour of standalone OTT platforms, driving historical TV operators into diversifying their service portfolio and introducing more flexibility in their bundles in order to retain customers.

Due to their role as forerunners of the streaming market in Europe, the Nordics are among the countries where the largest number of OTT services are available. But this fragmentation comes with downsides, and started a long-lasting debate over how to not overwhelm viewers with choices and how to best facilitate their access to content. An important aspect of the answer that was found in the region is content aggregation on telcos' ecosystems. Operators have multiplied distribution deals with video-on-demand platforms to position themselves as super aggregators, thus leading innovation in the industry when it comes to third-party app integration and overarching features. Nordic telcos became the utmost privileged interlocutors for any new service that wishes to enter the market, as Paramount+ showed in 2021 when it decided to launch its service in the region only through partnerships with local distributors. Britbox, the UK-born platform focusing on British content, also launched in the Nordics in the first half of this year and chose local pure players C More (in Sweden, Denmark and Finland) and TV2 Sumo (in Norway) as its partner.

All the region's historical broadcasters have been operating their own OTT platforms for years. With cheaper and more flexible services, they have considerably disrupted the traditional TV distribution markets and now account for a significant share of TV subscribers. This is shown by the success story of actors like Viaplay, which passed the 2.5 million subscriber threshold last quarter in the Nordics, TV2 Play in Denmark, which reaches 800k households, or the Swedish platform C More which counts around one million paying subscribers across 3 markets.

OTT streamers now represent a third of the total pay TV subscriptions in the Nordics, against less than 18% in the rest of Western Europe. This proportion will nevertheless increase way slower in the upcoming years, as the market reaches saturation and a smaller number of services is expected to launch. In some markets, we already see signs of consolidation. In Finland, the leading paid OTT services, Viaplay and Elisa Entertainment, operated by local telco and content producer Elisa, have merged their portfolio into one bundled subscription at the end of last year.

Another aspect of the prevalence of OTT usage on the Nordic TV landscape is how average revenues per user are being driven down by the significantly lower prices of streaming packages. If streaming services are less expensive to operate than historical pay TV platforms like satellite, and thus can be sold through way cheaper plans, significant pressure is put on traditional telcos to take down their prices to be able to follow up with streamers' pricing and line of service. TV distribution revenues in the Nordics are expected to stagnate at around €2.8 billion despite a slow rise in terms of subscriptions as those will mostly count OTT plans, and more cord-cutters will switch off their expensive TV plans.

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