Research from Futuresource Consulting has found that in 2018, subscription video-on-demand (SVOD) accounted for nearly a fifth of all consumer video entertainment spend in Norway which overall was up 6% year-on-year.
The analyst found that Norwegian viewers spent 2.5 billion NOK (US$289 million) on SVOD services and that despite it already being a mature market already, additional value in Norway is being driven by continued service price increases and multiple subscriptions per SVOD household.
In that, the SVOD market has been boosted by the highly competitive nature of its four main players — Netflix, HBO, TV2 Sumo and Viaplay — with other smaller players still active.
Futuresource noted that Netflix has dominated the market since it entered in 2012 and retained a market leading position in 2018, with subscriptions exceeding a million subscribers for the first time. In addition to Netflix, HBO has a strong presence and the quality of its library drove sales and the analyst had an estimated 20% market share at the end of 2018, despite no Game of Thrones season airing during the year, HBO’s most influential title worldwide. Viaplay also witnessed healthy growth, and although Norway is one of its weaker Nordic markets, revenues were boosted by raising prices in 2017.
“The 26-35 age group has proven to be the key age demographic for Netflix and has almost gained a utility status. As these consumers come of age, they have their own disposable income and convert from being Netflix users on someone else’s account, to account holders themselves,” said Tristan Veale, market analyst at Futuresource Consulting. “Multiple subscription trends are significant. However, in terms of revenue it is still dwarfed by pay-TV which maintained stable revenues in 2018, accounting for 70% of total video entertainment spend.”
Going forward to 2023, Futuresource Consulting goes on to predict that the market’s pay-TV subscriptions will decline, with household penetration going down from 97% to 94%, and as average revenue per user (ARPU) is increases, the revenues will appear to be mostly flat. Furthermore, by 2021 Futuresource expects an average of at least two services per SVOD household and by 2023 SVOD household saturation is trending to reach 79%.