Netflix's Nordic rival Viaplay logs much slower Q1 growth, shares slide

By Marta Frackowiak

(Reuters) -Swedish video streaming company Viaplay said sales growth at its core operations slowed markedly in the first quarter due to price hikes, knocking its shares 7% lower.

The group, grappling with waning demand as consumers struggle with the high costs of living, has lost more than half of its market value since the start of the year.

After replacing its CEO and laying off 30% of its workforce last year, Viaplay unveiled a turnaround plan in December that included raising equity, restructuring debt, and focusing on its core Nordic, Dutch and Viaplay Select operations.

The group, which competes with Netflix Inc and Walt Disney Co's Disney+, said sales from those operations grew 5.6% organically to 4.46 billion Swedish crowns ($410 million), far below 27.3% growth a year earlier.

Viaplay also blamed user account sharing for the muted growth, estimating that about a third of its premium subscribers share their account details with other people.

"Obviously that is not fair that you are buying a cinema ticket, and on the way out you're giving that to another person, who then watched the movie and on the way out he gives it to another person," CEO Jorgen Madsen Lindemann told Reuters.

Lindemann said Viaplay has some short-term measures it uses to stop account sharing outside a household that work well and is also working on some "more sophisticated" long-term measures to address the issue. Those measures are due to be introduced in the summer.

Viaplay completed a 4 billion crown recapitalisation drive in February, including a cash injection from main stakeholders that it says should be sufficient as it seeks to stabilise its business.

($1 = 10.8845 Swedish crowns)

(Reporting by Marta Frąckowiak in Gdansk; editing by Milla Nissi and Edwina Gibbs)