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Nordic TV group Viaplay released its Q1 financial results this week, posting year-on-year organic growth in both advertising and subscription revenues. While overall sales were mixed, with a significant drop in overall revenues, the fact that the broadcaster\u2019s primary revenue streams saw organic growth is a significant positive.<\/span><\/p>\n Licensing fall counters ad and subscription growth<\/b><\/p>\n It\u2019s over a year now since Viaplay announced a major recapitalisation programme, which itself was part of a massive strategic overhaul. Having pursued an ambitious international expansion plan which failed to deliver revenues as fast as hoped, the company found itself in dire financial straits, and has since then set about streamlining operations and righting the ship.<\/span><\/p>\n Given that this process has involved shutting down certain operations, the group expected net sales to fall for a period. But net sales from core operations, which Viaplay started reporting at the start of last year, have generally risen.<\/span><\/p>\n In Q1 this year, that wasn\u2019t the case. Total net sales fell to SEK 4.37 billion from SEK 4.76 billion last year. Net sales for core operations meanwhile were down 4.8 percent on an organic basis, and 6 percent on a reported basis.<\/span><\/p>\n This fall was entirely attributable to a sharp drop in sublicensing sales. Viaplay\u2019s \u2018sublicensing and other\u2019 category was down by over 53 percent on an organic basis, which is partly due to a shift in focus from the company. Sublicensing revenues were boosted last year by large scripted content deals, but the broadcaster is putting less focus nowadays on making these sorts of sales, turning instead to sports sublicensing and creative partnerships.<\/span><\/p>\n Viaplay\u2019s primary revenues streams, advertising and subscriptions, were up on an organic basis. Viaplay streaming subscription revenues saw organic growth of 0.7 percent, linear channel subscriptions were up by 1.8 percent, and advertising grew 0.7 percent. On the advertising front, Viaplay said that digital and radio ad revenues outweighed structural declines in linear TV advertising.<\/span><\/p>\n Still much to do<\/b><\/p>\n While Viaplay\u2019s organic ad growth might look like a positive for the wider European market (with Viaplay the first of the big broadcasters to post Q1 earnings), the group said the wider TV advertising market is estimated to have declined in Norway, Denmark, and Sweden in Q1.<\/span><\/p>\n The results also demonstrate further challenges for Viaplay itself. Operating income before associated company income and items affecting comparability (Viaplay\u2019s key metric to measure underlying profitability) sat at SEK -227 million in Q1. This was an improvement on the previous year\u2019s SEK -317 million, but a big swing from Q4 last year, when this figure was firmly in the positive at SEK 174 million.<\/span><\/p>\n J\u00f8rgen Madsen Lindemann, Viaplay\u2019s president and CEO, acknowledged there is \u201cstill much to do for the company\u201d, but maintained that steps taken over the last year have put the broadcaster on the right track.\u00a0<\/span><\/p>\n