With a 97% household penetration in 2019, the pay-TV market in Sweden is highly saturated and is expected to decline slightly in total revenue in local currency terms, from SEK10.3bn (US$1.1bn) in 2018 to SEK9.5bn (US$1.15bn) by 2024.
The growing competition between pay-TV providers and the proliferation of global and regional over-the-top (OTT) players delivering content through broadband connectivity is leading to a greater choice of content for customers but shrinking revenue margins for pay-TV providers.
Traditional technologies of delivering pay-TV services via satellite (DTH) or analogue cable TV (CATV) are being increasingly replaced by internet protocol television (IPTV), especially due to the growth of high-speed fibre-optic broadband.
The operators that have traditional CATV platforms in their portfolios (i.e. AB Sappa, ComHem, Telenor, Telia) have been investing in new access technologies such as IPTV and have been looking for partnerships with OTT players such as Netflix, to develop their digital TV offerings. For instance, as part of Telenor’s media strategy, the firm formed a strategic partnership to promote its IPTV services and to expand its content portfolio.
Additionally, ComHem is investing in fibre upgrades to gear its pay-TV service offering towards IPTV. As shown below, the ongoing technological shift is leading to the decline of traditional pay-TV networks.
With over 50% market share, CATV is the most popular pay-TV technology but is expected to shrink to 45% by 2024. In contrast, the share of IPTV subscriptions is expected to grow from 30% in 2019 to 42% by 2024.
Nordic Entertainment Group is gaining a market share in IPTV as it is strongly positioned in the broadcasting segment in Sweden and it has 3 studios in the country. Both Telenor and Nordic Entertainment Group’s have altered their strategies towards growing digital TV subscriptions.
These firms provide insights as to how the pay-TV providers not only need technologically sound networks but also rely on providing original content offerings to become more competitive.