The appetite in Scandinavia for on-screen entertainment is almost insatiable, even after lockdown

Documentaries, true crime, reality shows, political thrillers, action films, romantic comedies, historical dramas, concert specials, cartoons and Nordic Noir. If there is one thing that Scandinavians crave, it is on-screen entertainment.

To stay ahead of the game and satisfy the almost insatiable demand, streaming service providers and national broadcasters alike throughout the Nordics have implemented a variety of changes and competitive strategies in 2021 and 2022.

For example, HBO rebranded itself from Nordic to Max, offering a discounted lifetime subscription plan by the end of 2021 which resulted in a substantial subscription pick-up in the Scandinavian market (from 25 per cent in 2021 to 37 per cent in this year’s survey).¹ Disney+ also launched major campaigns for its subscription service, and its customer numbers globally now exceed those of Netflix.² Netflix has continued to develop new content and its Korean survival drama series Squid Game was a number one blockbuster to boost both new subscriptions and customer loyalty.³ Netflix continues to enjoy massive popularity in Scandinavia: 59 per cent of respondents in this year’s survey say that they have access to Netflix.

However, other providers continue to fight for market share. Paramount-owned free streaming service Pluto entered the Scandinavian market in May 2022, replacing Viafree with a new commercial model, an Advertising Video on Demand (AVOD) solution but with a linear twist. This is catering to a growing market, with 27 per cent of Scandinavian consumers in this year’s survey saying that they use free streaming services. Amazon Prime is still a relatively new player in the Scandinavian market, but with a different commercial model in markets such as Sweden where the streaming service is tied primarily to Amazon’s other services.⁴

The survey shows that regional and national players are appealing to the Scandinavian customers. TV2 Norway and TV2 Denmark both have relatively high market shares in their respective markets (35 per cent for TV2 Play in Norway, 42 per cent for TV2 Play in Denmark). In Sweden, the Telia-owned C More is the most preferred national player: 31 per cent of Swedish respondents in this year’s survey say that they have access to the service (once branded as Canal+).

The state-owned providers are also ramping up their digital content and streaming services. At the end of August 2022, for example, the Danish Broadcasting Corporation (known as DR in Denmark) announced layoffs of up to 70 employees to make room for new digital formats;⁵ and although a subsequent walk-out led to a reduction in the number of layoffs to close to 50 employees, DR is still insisting on re-organising staff and re-prioritising resources towards content that is suitable for broad digital consumption rather than a specific linear TV channel.

Attentiveness to customers has paid off

The competitive strategies employed by the various providers appear to have paid off. This year’s survey results show a big increase in the use of on-screen entertainment across Norway, Sweden and Denmark. 31 per cent of all respondents now stream films and/or TV series at least once a day, 19 per cent watch TV programmes on-demand via catch-up services daily, and 22 per cent watch live TV, figures which are all higher than last year.

Figure 1. Daily on-screen entertainment: Yearly development
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It is perhaps surprising that these numbers have continued to rise following the peak of the COVID-19 pandemic and related lockdowns and restrictions, which forced many people to stay at home. Today, when people can again move freely and engage in whatever physical and social activities they want to, the numbers watching on-screen entertainment have increased. This can be seen as a feather in the cap for the major entertainment providers, which have succeeded in catering to a quality-conscious audience in the mature Scandinavian market – even though many other forms of online entertainment and leisure activities are available.

More access, more subscriptions

The increased appetite for on-screen entertainment is clearly visible in the numbers for subscription video-on-demand (SVOD) services. 81 per cent of Scandinavians now saying that they have access to at least one SVOD service, compared to 68 per cent in last year’s survey, a massive increase that puts Scandinavia among the top regions when it comes to streaming services.

Among those who subscribe to at least one SVOD service, the number of subscriptions in Denmark and Norway has also increased, from 2.9 last year to 3.2 in this year’s survey. This indicates a desire to access whatever platform seems most attractive at the moment. 34 per cent of respondents in this year’s survey say that they are either new subscribers or re-subscribers to an SVOD service, up from 31 per cent last year.

Figure 2. Access to SVOD services: Yearly development
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Figure 3. Access to SVOD services: Country
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Figure 4. Number of SVOD services per person: Yearly development
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Figure 5. SVOD services subscribers and re-subscribers: Yearly development
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50 per cent of TV subscribers across Scandinavia now have streaming services included in their TV package. Whether or not these customers would have chosen streaming subscriptions otherwise is difficult to say. However almost all TV providers today design their packages with a choice of including streaming services (bundling), making it easier for customers to continue current subscriptions, try new subscriptions, or bundle old and new subscriptions into a customised plan that suits their personal preferences.

Figure 6. SVOD bundled with TV
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Netflix wears the crown (as well as showing it)

So, which streaming providers do Scandinavians prefer? Who has put together the content that keeps Nordic customers glued to their TVs or mobile devices? The short answer is Netflix.

While international media outlets have reported Netflix’s problems with retaining subscribers, citing as reasons hyper-competition, mediocre content or simply having busted the myth of limitless streaming,⁶ Scandinavian customers continue to put Netflix at the top of the pyramid with 59 per cent of all respondents saying that they have access to the service, significantly outperforming any other streaming service.

Figure 7. SVOD services: Country
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Netflix also released new blockbusters, in particular the Korean survival drama series Squid Game which quickly became a worldwide internet sensation, having, according to Netflix, “pierced the cultural zeitgeist” by amassing over 42 billion views (yes, billions!) of online videos and related memes in the first month after its broadcast.⁷

However, Netflix is not the only provider to enjoy growing success in the Scandinavian market. The numbers for HBO Max, Disney+ and Viaplay especially are also favourable, with subscriptions up significantly from last year’s survey. Prime Video, on the other hand, has still to achieve a breakthrough, and YouTube’s ad-free premium service seems to have reached a plateau at around 5 per cent market penetration across Scandinavia.

Figure 8. SVOD services: Yearly development
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Linear TV is back… for now

It is easy to get caught in the battle of the giants when it comes to entertainment streaming, but according to our survey linear TV is far from the 20th-century relic that some commentators have made it out to be. This year, more people than in last year’s survey say that they watch linear TV daily.

There is a significant age difference when it comes to entertainment habits, with older people being more likely to watch linear TV, and younger people more likely to use streaming services. Surprisingly, however, linear TV is on the rise for all age groups in this year’s survey results, compared to the previous year.

Figure 9. Usage of linear TV and video streaming: Age
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There are various possible explanations for this unexpected increase. One is the fact that linear TV played a bigger part in people’s lives during the COVID-19 pandemic, when press conferences, sing-alongs and other public service programmes were used to create a sense of unity at a time when people were forced to stay at home. These viewing habits have persisted even after the stay-at-home orders have been lifted.

Another plausible explanation is that linear TV broadcasters have become better at integrating linear TV with on-demand TV, blurring the border between content that is streamed and content that is shown live. For example, the Danish Broadcasting Corporation (DR) released the fourth season of its hit series ‘Borgen’ in 2022, but for the first time co-financed by Netflix. However, there are big regional differences between Norway, Sweden and Denmark, with numbers watching linear TV increasing a lot in Denmark, only a little in Norway, and unchanged in Sweden.

Figure 10. Usage of linear TV and video streaming: Country
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More people cancel

More streaming, more linear TV, more craving for entertainment. It may seem that the sky is the limit when it comes to providing content for Scandinavian consumers. But more people are cancelling subscriptions, for either short or longer periods.

Overall, 25 per cent of respondents in this year’s survey say that they had cancelled a subscription during the past 12 months. This is a 5 percentage point increase from 20 per cent in last year’s survey. The change has occurred mainly among consumers under 45 years old, with young people more likely to switch between providers when either content or price becomes more attractive elsewhere.

Figure 11. Cancelling subscriptions: Age
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Different providers are experiencing very different levels of churn. Brands with lower market penetration are seeing higher churn, while established providers have customers who are more loyal. However in the hyper-competitive and ever-changing market of streaming services, no company can rest on its laurels, even for a short time, without running the risk of customers turning to cheaper or more popular content. This can be seen in the increase in customers in 2022 considering cancelling Netflix, compared to 2021.

Figure 12. Brand-specific churn intention
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“I’ll be back”

We asked our survey respondents why they had cancelled subscriptions. The responses were not much different from last year’s survey. “Did not use it enough” was the most common answer, and “The subscription was too expensive” came next.

Figure 13. Reasons for customer churn
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Looking at the various answers to this question, we see that 54 per cent of the respondents mention price considerations in one way or another. This will obviously be an area of concern for streaming providers who will want to continue with their current pricing model, or even raise prices. Women are more cost-conscious than men: 25 per cent of female respondents (compared to only 14 per cent of men) say they needed to spend less on subscriptions because of rising costs in other areas of spending.

However, while content and price are the main drivers for cancelling subscriptions, they are also the main drivers for getting subscribers back. In particular, the release of a new season of a favourite show seems to be the easiest way to attract customers back, with over 40 per cent citing this as a factor in their decision. We are therefore likely to see streaming providers over the coming years put even more money and effort into developing multi-season content. Blockbusters such as Stranger Things and The Crown show that popular TV shows can continue to attract global audiences and run for years.

Figure 14. Reasons for resubscribing
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Trends in the coming year

Several findings from our 2022 survey indicate what we might expect in the coming year.

The global streaming providers are likely to invest further in TV and film production, while the market for audio-only subscriptions seems to have reached a plateau. In the US, monthly numbers for listening to podcasts, which rose sharply during the pandemic, are now falling for the first time in more than a decade.⁸ One explanation for the lack of growth in paid audio may be the extensive availability of free audio, whereas films and TV shows are still largely kept behind subscription walls.

Figure 15. Access to paid digital subscriptions
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According to our survey, almost one in five consumers are willing to increase their spending on video streaming and 13 per cent expect to spend less. But 61 per cent are planning to keep spending at current levels, which should encourage decision-makers in the entertainment industry to invest aggressively in developing new content. However, current inflationary pressures and the energy crisis could potentially affect demand, and we are yet to see whether these events will force people to cut down on subscriptions.

Figure 16. Spending in 2022
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The spending and subscription behaviour patterns of Scandinavian consumers could change if more SVOD providers were to offer an AVOD option (advertising-based video on demand). Netflix has recently rolled out an ad-supported service that as per November 2022 will be available in different countries such as the US, Canada, the UK, France and Germany.⁹ 42 per cent of respondents in this year’s survey say that they would prefer one of the AVOD models (no cost subscription or half price subscription in exchange for ads) as a payment option, signalling that there is a strong appetite for this type of low-cost or no-cost subscription option.

Figure 17. SVOD versus AVOD
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In 2023, there may be more competitive moves from the major providers. Warner Bros has already announced the merger of HBO Max and Discovery Plus, starting with the American market, then moving on to Latin America and eventually Europe in early 2024. In Denmark, major streaming providers such as Netflix announced in 2022 that they would not be producing any more local content due to a dispute with unions regarding rights payment to artists and content creators. In Norway on the other hand, the government is ready to demand that streaming providers should invest in local content, either directly or through contributions to the Norwegian Film Fund. There is a consultation period deadline in late 2022, and the proposal will be submitted to the Norwegian parliament in 2023,¹⁰ thereby aligning with the principles of EU’s Audio-Visual Media Services Directive, which is currently being implemented in various stages across Europe.¹¹

A further complication is that local content is not a significant driver of resubscription, with only 5 per cent of our respondents saying that (more) local content persuaded them to return to a service (Figure 14).

Whether or not the Norwegian parliament chooses to enforce the co-financing obligation – and whether a new agreement is reached in Denmark – it is clear that the authorities, unions and streaming providers have not yet settled on a reasonable level of funding for local content, and that 2023 will likely see more disputes about the local responsibilities of global providers.

Finally, 2023 could be the year when major streaming providers finally unravel the Gordian knot of people using each other’s subscriptions, which accounts for significant losses in revenue across the globe. In Scandinavia alone, according to this year’s survey, 52 per cent of people streaming use other people’s login information, and 12 per cent do so daily. Among young people aged 18-24, a staggering 75 per cent uses other people’s login information, something to alarm any subscription provider.

Figure 18. Usage of other people’s streaming subscription
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Figure 19. Usage of other people’s streaming subscription: Age
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However, although the problem is difficult to resolve, companies are not necessarily without methods to reduce sharing: some are already being tested in different markets.¹² Due to the high incidence of sharing, 2023 will probably see more security measures around account management and possible increases in prices for those accounts that are shared across multiple users or households. Netflix has already tested the option of letting primary account holders pay an additional fee for users outside their households.¹³ Others might follow in their footstep to reduce the number of freeloaders and allow sharing in an easy and secure way.

_{¹ Numbers do not include Sweden.
² https://www.knowyourmobile.com/news/disney-is-now-bigger-than-netflix-heres-why/
³ https://www.bbc.com/news/business-58976204
⁴ https://www.aboutamazon.eu/news/amazon-prime/amazon-prime-is-now-in-sweden
⁵ https://www.berlingske.dk/aok/fyringsrunde-paa-dr-nu-har-medarbejderne-faaet-besked
⁶ https://variety.com/2022/film/columns/netflix-lost-subscribers-questions-1235255088/
⁷ https://en.wikipedia.org/wiki/Squid_Game#Accolades
⁸ https://www.marketingbrew.com/stories/2022/03/28/monthly-podcast-listening-is-down-for-the-first-time-in-almost-a-decade-according-to-study
⁹ https://edition.cnn.com/2022/10/13/media/netflix-ads-plan-cost/index.html
¹⁰ https://norway.postsen.com/trends/47555/The-government-requires-streaming-services-to-invest-in-Norwegian-films-and-series.html
¹¹ https://variety.com/2021/digital/news/europe-avms-streamers-1234915013/
¹² https://nerdist.com/article/netflix-stopping-password-sharing-with-price-increases/
¹³ https://variety.com/2022/digital/news/netflix-subscribers-pay-users-outside-households-1235206575/}