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Swedish streaming service Viaplay has ousted its chief executive, warned of a loss this quarter and scrapped its forecasts, sending shares in the group that bet heavily on a mix of football and Nordic noir drama down by more than 60 per cent.
The company, which had styled itself as a competitor to Netflix in Europe, shocked investors after disclosing the rapid deterioration in its business in a press release issued at 2am Swedish time on Monday.
Alongside the exit of Anders Jensen, who has had the top job since 2018, Viaplay also withdrew its long-term guidance for sales, subscriber and profit growth entirely.
Instead of reporting a profit of up to SKr350mn ($32mn) in the second quarter, the company said it expected to lose as much as SKr700mn. Its cost-cutting programme, meanwhile, has failed to keep pace with the slowdown in its business.
Jensen will be replaced with Jørgen Madsen Lindemann, former head of MTG, the ex-parent company of Viaplay.
Shares in Viaplay plunged by more than 60 per cent in early trading.
Its struggles are the latest sign of the slowdown hitting the broader streaming market, whose growth had been turbocharged by the pandemic. The group had touted its position as the second-largest streamer in the Nordics, but failed to expand profitably outside its home market.
It bought expensive sporting rights — something US streaming services such as Netflix and HBO Max have avoided — with the aim of sparking international growth.
“The outlook for the markets in which we are operating has shifted considerably and at a very rapid pace, and the execution of cost-savings programmes has not been mitigating the effects from these conditions to a sufficient extent,” said Pernille Erenbjerg, chair of Viaplay.
The company blamed the cost of living crisis for hurting subscription sales and “higher churn levels” of existing subscribers following recent price increases.
As recently as late April, Viaplay said the year had begun “in line with our guidance”.
Analysts said the shares could find a floor if the market valued Viaplay’s business outside its home market — where it has expanded into the Netherlands, Poland, UK, US and the Baltics in the expectation of big growth — at zero.
Erenbjerg added the “overall strategic direction” of Viaplay was “unchanged” but said the new chief executive would look into the “need for structural, operational, and capital allocation enhancements to the delivery of the strategy”.
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