Market Insight

Nordic pay TV players renew key movie deals

September 26, 2012

Tim Westcott Tim Westcott Director, Research and Analysis, Programming
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MTG and C More Group, competing pay TV operators in the Nordic region, have announced a string of movie rights deal renewals as they prepare to face the imminent launch of Netflix and HBO Nordic.

MTG, which operates the Viasat pay TV platform, said it has signed an agreement with NBC Universal for free-to-air and pay rights to new and library films and TV series earlier this month. The free TV rights were acquired in partnership with public service broadcasters, while the pay TV rights are exclusive and include subscription video-on-demand. MTG also signed a second pay TV window deal with Twentieth Century Fox and new agreements with local distributors AB Svensk Filmindustri and Nordisk Film. MTG has existing pay TV deals in place with Walt Disney and Sony Pictures. The first pay TV window typically lasts for 12-18 months in the Nordic region.

C More has, over the last week, renewed deals with MGM and Paramount, signed a first window pay TV deal with Fox and a second pay TV window deal with NBC Universal. Rights are for the linear pay TV channels operated by C More on satellite, cable, DTT and IPTV and for its on-demand service, C More Play. Through Paramount, C More will have rights to high-end family movies from DreamWorks Animation.

The only major Hollywood studio still unattached is Warner Bros, which has previously had agreements with C More. This may be because the studio's stablemate HBO is about to launch in the Nordic region in partnership with Parsifal International, a company owned by Swedish pay TV veteran Peter Ekelund. HBO Nordic is described as a 'multi-platform' service - which clearly does not rule out third party distribution on traditional networks although HBO Nordic has been widely (and possibly erroneously) reported as being over-the-top (OTT).

The US online DVD rental company Netflix is planning to launch a streaming-only service in the Nordic region this year (see our 16 August analyst commentary, Netflix to launch in the Nordic region), while C More and its parent Bonnier Group are planning an online service branded as Filmnet.se.

The Nordic region has held out against the prevaling trend in most of the rest of Europe by supporting two rival pay TV platforms. Viasat and C More - owned since 2010 by the privately-held Bonnier press group - have been rumoured to be negotiating a merger at times in the past, but have never seemed close to doing so. With both groups now part of multi-media conglomerates, they are not solely reliant on a small pay TV market (of just 11.7m TV households). However, the lack of growth in this market and a stubborn refusal of pay TV penetration to increase significantly have forced both companies on the defensive. The major threat comes from broadband, in markets where penetration (in Denmark and Norway) and download speeds (in Denmark, Norway and Sweden) are above the European norm.

MTG has been particularly aggressive in targeting subscribers outside the traditional DTH and cable market, launching premium content online as part of its Viaplay service last year. Viaplay is now available on a range of platforms, including games consoles, mobile phones, PCs and tablet computers. While the company has not released any detailed numbers on take-up by device, its quarterly figures do report a decline in DTH subscribers. There were 612,000 DTH subs at the end of the second quarter, 28,000 fewer than a year ago. C More also does not report any subscriber numbers, but we estimate that it had just over one million subscribers at the end of last year.

The new rights agreements are mostly a case of business as usual for the two pay TV players, with only the smallest of the Hollywood studios, MGM, changing partners and only one deal, with Warner Bros, still undecided. No information was given about the terms of the deals or their value. However, by tying up pay TV rights for the majority of Hollywood and local studios, MTG and C More are building strong defences against new entrants by denying them access to the kind of premium content which will be vital for them to make serious inroads into the market. In addition, thanks to the ubiquity of DVDs, movies are no longer as crucial a part of the pay TV offer as they were. Sports rights are far more crucial, and both MTG and C More have invested heavily to retain key football and ice hockey rights in the region.

 

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