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21 November 2019

Nordics latest to gang up against US streaming invasion

Another week and another region, this time the Nordics, is in the spotlight for local collaborations against the big streamers, as the likes of Disney, Comcast, AT&T and Apple join Netflix and Amazon in their sights. Such alliances can have two motives – to obtain scale for content investment and to aggregate enough compelling content to become more competitive for subscriptions. Local broadcasters or content providers can rarely match the big US players for global content investment and so inevitably have to set out their stall as leaders in local originals.

This is the case in the Nordics, but given the region’s pedigree for exporting series, especially crime dramas, local players have also been seeking scale through collaborations with international distributors as well as content creators. This makes sense in a region whose local market is limited in size even when aggregated between the four countries of Norway, Sweden, Denmark and Finland, which in any case have different languages so that it is not quite a single coherent region.

Unlike some other cases the Nordic reaction against Netflix is not really a recent eruption but has been developing some time in a region renowned for being an early adopter of streaming. It is now virtually a full decade since the Swedish Media Council at the start of 2010 drew attention to a notable shift among younger consumers away from broadcast viewing towards online. Netflix was the first foreign SVoD provider to take notice, launching in all four Nordic countries in October 2012 just nine months after its European debut in the UK and Ireland.

This made a lot of the early running and helped continue the streaming advance, with 60% of 15 to 24-year-olds regularly watching video online by the start of 2016. Average daily broadcast viewing totals among this young demographic have plummeted over the last decade as a whole, down 11 minutes a day in Norway and 134 minutes in Denmark, making it hard to make that traditional claim that linear TV is still king.

Given these early warnings, the region’s content producers have adapted sooner than in many other regions to the demand for series that can be binged online and what they believe is a corresponding need to ramp up local content production as a defensive measure. At pay TV operator C More Entertainment, formerly Canal+, almost half of all content now shown is locally produced, while Viaplay, owned by NENT which spun out of the Modern Times Group, is now the region’s biggest producer of local originals. To mark the general trend, in 2012, 49% of all non-sports content spend was dedicated to local originals, rising to 57% by 2018.

In tandem, spending on TV and film content acquired from overseas had dropped by almost the same amount, from 51% in 2012 to 43% in 2018. These trends were both driven by the Netflix invasion which also made international content more expensive to acquire, yet there is a sense now that Nordic content producers cannot succeed purely by focusing on local content as a defensive measure, because they risk being quashed by the foreign streamers with larger budgets.

Accordingly, the bigger players at any rate have been pursuing international collaborations for several years now, notably Viaplay, which embarked on this revised strategy while still under the Modern Times Group hat. It began in 2017 through a distribution and co-financing partnership with Red Arrow International on an eight-part political thriller Embassy Down, aiming both to share production costs and reach international markets.

Since then the strategy had had some further success reaching foreign audiences, Viaplay having sold productions to broadcast and streaming partners in Europe, Asia and the US. Examples include Veni Vidi Vici’ available on Hulu and the series ‘Honour’ sold to RTL in Germany and Belgium’s VRT.

The more international strategy has also extended to equity with NENT taking a minority stake in new US production company Picturestart. There have also been joint ventures, including one in the UK with independent studio FilmNation Entertainment to finance and produce scripted TV content for global audiences.

Netflix for its part has ramped up its Nordic production and increased its regional budget to around $50 million a year and is itself seeking co-production and exclusive distribution partnerships with local content producers. with partners from the Nordic region. It has just announced at the Stockholm Film Festival that Red Dot, produced by SF Studios in Sweden and Cadaver from Norway produced by Motion Blur, will premiere exclusively on Netflix. It also announced the acquisition of the Danish feature film Shadows In My Eyes, produced by Miso Film. The film will enjoy theatrical release in Denmark followed by global launch by Netflix.

We are seeing then strategies converging around content partnerships, with responses to Netflix as mixed in the Nordics as they are in other regions such as South Korea, where again some content producers are more willing to collaborate with the “enemy” than others.