In a shocking turn of events, Swedish streaming service Viaplay has ousted its chief executive, announced a projected loss for the current quarter, and abandoned its financial forecasts. As a result, the company’s shares, which were once seen as a formidable competitor to Netflix in Europe, plummeted by over 60 percent.
In an unexpected press release issued at 2 a.m. Swedish time on Monday, Viaplay revealed the rapid deterioration of its business, catching investors off guard. Alongside the departure of CEO Anders Jensen, who had held the position since 2018, the company completely withdrew its long-term guidance for sales, subscriber growth, and profit.
Instead of the anticipated profit of up to SKr350mn ($32mn) in the second quarter, Viaplay now anticipates a loss of as much as SKr700mn. Furthermore, its cost-cutting measures have failed to keep pace with the slowdown in business, exacerbating the challenges faced by the company.
Jensen will be succeeded by Jørgen Madsen Lindemann, the former head of MTG, Viaplay’s previous parent company. The sudden leadership change adds to the uncertainty surrounding the company’s future.
The steep decline in Viaplay’s shares reflects the broader challenges faced by the streaming market, which has experienced a significant slowdown following the pandemic-induced surge. Despite its position as the second-largest streaming service in the Nordics, Viaplay has struggled to expand profitably beyond its domestic market.
Pernille Erenbjerg, chair of Viaplay, acknowledged the changing market conditions and the insufficient impact of cost-saving initiatives in mitigating these challenges. The company attributed the decline in subscription sales and higher churn rates to the cost of living crisis and recent price increases.
Analysts believe that Viaplay’s shares may find stability if the market values the company’s business outside its home market at zero, indicating a need for a reassessment of the company’s growth prospects.