April 17, 2019
Consumer spending in Denmark’s home entertainment market grew 7% in 2018 to DKK 10.21 billion ($1.53 billion) — driven by over-the-top video, transactional VOD and EST growth, according to new data from Futuresource Consulting.
SVOD (i.e. Netflix) spending grew more than 30% and is expected to DKK 2 billion mark by the end of 2019, accounting for more than 20% of total video entertainment consumer spend.
“Subscriptions grew 25% in 2018 to 2.1 million, with three services gaining 100,000 or more subscribers,” analyst Tanzim Rahman said in a statement. “SVOD consumer spend nearly doubl[ed] between 2016 and 2018 … growing by DKK 852 million. SVOD accounts for the majority of total growth in the entertainment market over the same period, which saw revenue rise by DKK 1.2 billion.”
Futuresource said SVOD in Denmark continues to benefit from a competitive landscape, with an attractive range of services from global players Netflix and HBO to local offerings from Viaplay and TV2 Play, with Netflix leading the market with 39% of subscriptions in 2018.
Streaming services are supported by a strong broadband environment, with average speeds of 39 Mbps and household broadband penetration at 83%.
As a result, Denmark saw a total of 1.2 million households subscribing to at least one SVOD service, leading to household penetration of 46% in 2018 — on par with the Nordic region average, which led European penetration rates in 2018.
Futuresource contends the transactional video market across both digital and physical formats is expected to decline by 2% to DKK 554 million, with the physical market declining DKK 57 million. However, from 2019 the transactional segment is expected to see a return to growth, propelled by a progressive EST sector, which will grow 31% to DDK 163 million.
Transactional digital video growth accelerated in 2018 to 16%, with total spend reaching DKK 349 million, although this is just 20% of the SVOD market.
A solid year of EST growth meant that revenue increased 38% to DKK 124 million, doubling since 2016, and accounted for 35% of the 2018 transactional digital market.
“Growth in EST has been driven by Viaplay and Google Play, although iTunes still dominates the market, taking a 57% share of spend,” Rahman said. “Apple have signed agreements with major TV manufacturers and is expected to consolidate its position over the coming years and help further stimulate the market.”
Transactional VOD continues to grow, but at a slower pace than EST, with spend increasing 18% to DKK 96 million in 2019 — and an average of 16% annually through 2023.