Hello. A warm welcome to Nordic Entertainment Group's Capital Markets Day 2021. My name is Mia Suazo Eriksson, and I'm Chief Marketing Officer here at NENT. Today marks our third CMD, and so much have happened in the past three years. It almost seems impossible that it was only one year ago, we were standing here presenting our five-year plan and our international expansion strategy to you. We had hoped to be face-to-face with you today, but as that's not possible, this event will be live-streamed around the world. Luckily, digital entertainment is what we do, so we're excited to give you 200 minutes jam-packed full of information and insight. I hope you haven't missed this morning's announcement regarding our next five expansion markets, along with our updated financial targets.
You can find all of today's presentations in the virtual lobby that you logged into right before joining us here. We will have plenty of time for Q&A sessions, which will be hosted by my colleague and NENT Group's Chief Corporate Affairs Officer, Matthew Hooper.
Thank you, Mia, and hi, everyone. Welcome today. Great to have so many of you with us, albeit virtually on this occasion. We're really looking forward to all of your questions. It's been a very busy year, as Mia said, and we've got a lot of things to get through. To ask a question today could not be easier. Bottom left of your screen, just click on the Submit Question button, fill in your name and your question, and I'll bring those to the presenters for you. Really looking forward to seeing you later, and please do send in your questions at any stage. Now back to you, Mia.
Thank you, Matthew. Right. Let's get straight into it and welcome our first speaker, NENT Group's President and CEO, Anders Jensen.
Hello, Mia.
Hi, Anders. It's been quite the year.
It has been an extraordinary year, indeed.
Do you want to tell us a little bit about your feelings, what's happened in the last year, as well as what we have to look forward to today?
Well, if we start with the last part of your question, there's a lot to look forward to. We had a quite busy announcement this morning.
Yeah.
With a lot of information. We want to address that in additional facts and flavors. There's a lot more to look forward to during the day. The past year has been extraordinary, in so many ways. It has been a year of reflection and almost soul-searching. Things that I believe profoundly at the end of the day will make us a better company.
Yeah. Absolutely. Well, we have a lot to look forward to. You're first up to present the strategic overview.
Thank you so much.
Take it away .
Thank you. A very good afternoon, everybody, and thank you very much for taking time out of your busy schedules to spend this afternoon with us. Like Mia said, we would have loved to have you all here today and get the energy of a full room, of interested participants. Now we have to convey that energy to you, and I hope and think that we will. You can look forward to a lot of information, as I mentioned, some flavors that are not necessarily that clear in this morning's press release, and you will get deep dives from my super talented colleagues into various parts of our operation. I thought it would be good to do a little bit of a recap and an overview on who we are as a company.
An intro for those of you who don't know us very well, and of course, a brush-up for those of you who have been following us for a while. We call this the strategic overview. I want to start by talking about the company that we are building. We find ourselves in an industry that is changing at a pace and in a way that it probably never has before. It is a massive opportunity, and it has a few challenges joining that opportunity. We see it touching all elements of our industry, whether it's cinemas, production companies, broadcasters, TV broadcasters, streaming companies, talent, everything is changing. One thing that I would like to say upfront, I believe that this change that we're going through is for the better. It will be better for consumers and for the viewers.
It will be better for creators, it will be better for all the stories that we want to convey in new, different ways. It will create a new foundation for how to monetize our industry. Such a journey comes with a lot of changes, some of them pretty painful. To paint the picture of the company that you want to become is immensely important. We are in a race for subscribers, viewers, market share. To be able to achieve that, first and foremost, we find ourselves in a race for talent. The talents of today and the talent of tomorrow will not join a company who is not crystal clear on where they are going, what they stand for, and what they want to achieve. The purpose of the company is more important than ever.
As I mentioned before, I think this last 18 months of soul-searching and finding new perspectives on your professional lives, in that perspective, this is even more important than ever before. Nordic Entertainment Group is a young company sprang out of a company with a long and successful heritage. A successful heritage does not constitute a bright future. We have to create that for ourselves. That makes us a construction site, and we want to remain a construction site for many years to come so we can self-reflect, reinvent, and transform as we go along. I believe that our vision to tell stories, to touch lives, and to expand worlds, that vision will not change. Our purpose will not change. It is in that essence, we can create something absolutely extraordinary.
Once we are successful with that, we are well on our way to achieve our vision to be the international streaming challenger. A company residing on shared values is a strong company. Our values are not just values, they're actually an ambition as well. For us to be equal and brave means that we have to set some really audacious targets, and we have taken one of the values into those ambitions. We want to be the most equal, diverse, and inclusive entertainment company in the world. That is an ambition and a promise that we tell everybody who is in the company, who joins the company, and who wants to join us on our journey. This is a recipe for success that is not easy to replicate.
Being successful in this allows us to basically compete with anybody, because we are the only ones who can be the best at who we are. As we move along the journey that we have ahead of ourselves, we can be a true force for good. We can be sustainable for the long run, and we can create tangible impact. We have set a number of targets for ourselves. We have achieved good recognition on the journey. We have received good recognition on the achievements so far. There is much more to come from. I believe that one of the really important parts of the transformation of our industry is the new perspective on how we create, produce, and distribute magic content. You will hear a lot more about this during the day.
It is a fantastic opportunity because never before have any of us who love content been so open to new perspectives, new ways of getting entertained and enlightened. This success factor will be a true force for good moving forward. I would like to move in to give you an update on how we are performing as a company. We'll go into a couple of deep dives before we go into the rest of the material of the day. The first recap is, of course, the CMD 2021 targets. Like Mia said, in November last year, we presented a complete new strategy for the group, moving from our successful history into a true growth company with a sustainable platform for future opportunities. All of these targets that you see here on the slide, they are known to you from before.
What we will demonstrate today is that we have either improved the target or created more foundation and a stronger foundation on how to achieve that target. Much has happened since CMD 2020 until where we are today, and that you will get a lot of details on. Every single element has moved in the right direction. We are performing in line, and we will be focusing, of course, almost exclusively on Viaplay today. I will touch upon, very briefly, the other parts of our business as well, but it will be about Viaplay for obvious reasons. If you look at the numbers last year, and they are, of course, influenced last year up till now. They are, of course, influenced by the pandemic. If you net out the positives and the negatives of the pandemic, we have had a successful year.
Our sales up 20%, impacted by some push to streaming because of the pandemic, decreased because of some impacts in the early parts of the pandemic. Net-net, we are still delivering on our target. Our EBIT has improved significantly. Net-net of the positives and the negatives, the most important factor in this is that we have continued to drive our strategy, and we have dealt in a very focused way with the negatives of the pandemic, taking out cost where it was necessary to be able to continue to fund the journey going forward. This would not have been achieved if we wouldn't have been so clear on how we want to do things and what our strategy is. We have grown our customer base significantly, in line with or slightly better than the market, maintaining market share and moving forward.
Viaplay is now established as our number one source of revenues. If you look at this number for the second quarter this year, 35% share of revenues. If I just elaborate a little bit on what that means, it actually means that we are transforming the source of revenue to be more future-proof for every single day that this grows. Our other subscription bucket is a significant one, but that one wouldn't have been as big or as successful if we weren't investing in Viaplay. Those two are extremely interlinked and very important for our success. We expect other subscriptions to continue to grow at a healthy rate in the strategy period. It is a way of both funding and driving revenues out of the investments that we're doing in Viaplay.
Advertising. This is actually the only part of my presentations during the day that I will really touch upon advertising. It is now a significantly smaller part of our business. It's not that long ago that actually represented almost 50% of the revenues. It has been stable. Yes, there was some pandemic effect. It is pandemic effect. It is bouncing back and in a good way. I am extremely encouraged to see how the market is ready and willing to invest their way back from the pandemic. I think the linear TV and radio as reach medias has actually extended the future outlook in a positive way as a consequence of the return and the need for investment post-pandemic.
Advertising will continue to be a decreasing part of our business as Viaplay grows, but a continuous important part on how we drive value into the group. We have been moving fast, and I will by no means go through this busy slide. At CMD in 2020, we presented ambitions dependent on a number of boxes that we needed to tick. On this picture, you see all those boxes ticked and actually a few more new boxes added. We know now what we have, not just what we want. We know what we have, we know the value of it, and we know the cost of it. This is extremely important for the credibility of the numbers that you will hear a number of times today. Our industry is changing, as I said before. That leads to a lot of turbulence around us.
Mergers, JVs, whether it's companies that need scale or companies that need to do in-market consolidation to put themselves in a stronger position. We have not seen a single thing around us that changes how we see ourselves and the likeliness of success for Viaplay. This is very important to say. We are not, of course, deaf to what happens around us. Nothing has happened that has made our belief in our strategy weaker or less relevant in our way to execute going forward. We have accelerated, you will hear a lot about this in the various presentations. From today, we will launch in seven more markets up till 2023. We will be present in 16 markets when we hit 2023. We have added more sports rights and big sports rights for Poland and Netherlands. We have significantly increased our ambitions on Viaplay Originals.
You can say that we have doubled down on becoming the home for original content. Let me go to the updated 2025 targets. You will hear it in more detail from Gabriel later, but I want to mention some flavors that you should have in the back of your heads as you go through the CMD. The organic sales growth, same number as you saw in 2020. We are now hitting the upper range of those numbers. If you do the math on a move from a range of 2% and a CAGR over five years, that is actually quite significant. We're upgrading our subscriber targets with 1.5 million subs to 12 million. That one sits completely in our international segment. We'll get back to that later.
The Nordic organic sales growth also moves to the upper end, we are adding a very important new KPI, which is the Viaplay Nordic organic sales growth, to give you a like-for-like comparison with international, where we have only Viaplay. Here we're looking at 23%-25% CAGR up till 2025. The two important elements in what we have achieved since last CMD are all the underlying drivers to allow us to move to attractive margins over time. For Nordic, we can say now that we are well in line with our expectation to hit a 15% margin in 2025. With the extrapolation that we're now able to do on everything that we know, we are aiming for a 20% margin in the Nordics. For international, we haven't changed what we said last year.
We will hit break even in 2025, and international will be EBIT accretive to the group from 2025. The operational leverage in international, given everything that we have achieved in terms of proposition, rights, new content, and the longevity of the contracts that we have, allows us to target a margin on 15%, same as in the Nordics, already in 2026. That operational leverage, if you do the math on that is significant. Leverage policy, we have not changed. To make this more tangible, we are also adding now the short-term outlook, meaning what are we actually looking for in 2022. The organic sales growth for the group in 2022 will hit roughly 28%, a significant growth year already next year, of which we expect to grow around 20% in the Nordics.
Viaplay's subscriber growth, if it would have been a hockey stick coming at the end of the strategy period could, of course, be questioned. It would be high risk in a very competitive environment. We have decided very deliberately to make sure that a lot of the growth comes early in the first part of the strategy period. Next year, we will move from this year's roughly 4 million subscribers at the end of this year to 6.5 million subscribers at the end of next year. It is truly a growth year that we have ahead of us. In Nordics, we will continue on our original ambition to deliver profitable growth in our Nordic core businesses, rising profits, and stable margins, with additional positive effect coming in 2023.
We have invested more to achieve this position, and we want to take a significant part of those investments, meaning the losses that international incurs already in 2022, and you will hear more about that from Gabriel later. We are, of course, spending more capital. At the end of the day, what this tells you is that we're doing what we said when we raised capital earlier this year. We will invest in a sustainable future, and we will double down where we see opportunities if and when they yield significant upside. That, I think, is exactly what we have achieved with this outlook. The key takeaways of this summary of where we stand ahead of the rest of today is that we remain extremely proud of the unique platform and product that we have created in a very focused way over the years.
We have a track record of delivering. We will deliver. We will find ways to deal with the bumps if and when we hit them. They come. Something will always go in a slightly different direction than you anticipated. It's the strength of the organization that sets you in the right mode to adopt and change for that. We have raised our ambitions, we have raised our targets. You will hear this next statement a number of times today, we are fully funded for the journey that we now embark on. We are investing in what is actually a true sustainable future for our company.
Thank you, Anders, for such a great overview of who we are and where we're headed. We're going to take questions at the end of this session, but just a quick one from me. The pandemic has raised a lot of questions.
Yes.
What's the key takeaway for you?
I think the pandemic, if anything, has shown that you should not take anything for granted.
Yes.
You have to be ready to adapt quickly. It's been tough, but it's also been an eye-opener in many areas for us as a company, for us as human beings, basically.
If we boil all that down into a cocktail blender, what comes out is actually a very interesting mix of new opportunities. Not take anything for granted. That is definitely the key takeaway.
That's very clear. Well, now you're going to take us through an update on our development, both in the Nordics as well as international. That's super exciting.
Yeah.
Back to you.
Thank you. Coming back to the rest of the journey that we have ahead of us, it will be today, you will hear a lot about international, the new countries, the new opportunities, the way we're going to create value in these new countries. It is extremely important for us to convey a clear message on how important the Nordics continue to be. One thing that I, as a CEO, have always been concerned with when you start to elaborate your strategy, is that you run the risk of losing track of where you come from. You lose the sight of the ball that is actually taking you to where you are. We will, of course, not do that. The Nordics is a significant part of the growth journey that we have ahead of us.
Viaplay has grown handsomely and taken market share over the last year and a half . We have grown subs slightly ahead of sales. That is a very conscious decision to gain market share, get penetration, and then allow us to work with pricing and proliferation of packages to create additional sales growth on top. As we saw in the second quarter results, that is now gradually coming into play. We remain firm on the ambition to double the subs in the Nordics by 2025. The market growth, and I will come back to each and every 1 of these in some detail, as we see it, supported by external parties, supports that notion. Customer engagement, and I will probably dwell most on that in this presentation, because that is maybe the most important element.
In this enormously crowded area where we find ourselves, there is no lack of content to choose from. The more we can engage with our customers, the more time they want to spend with Viaplay, the stronger we get, the more courage we have to invest more in content that our subscribers love. We are doubling down, as I said, on originals, and it touches both movies and series. That is a major driver, of course, for this growth. The sports rights that are coming to play in all of our markets, and especially in Norway and Finland, we are upping our game already next year. We are a real believer in partnerships, working with the infrastructure around us, working with the ecosystem that has been built in the distribution of content over many, many years.
Those partnerships have done good for us. We will continue to seek new ways of partnering up with interested parties. The market in the Nordics, we expect it to go from the current penetration that is now hitting roughly 60% up to around 80% in 2025. That is driven by interest in additional households. It's also driven by, of course, the number of services that are available, and those number of services will drive what is generally now called stacking. More SVOD subscriptions per household from the current, roughly two to three in 2025. Here we have an interesting discussion of course, how many subscriptions are any of us ready to have? Well, I think there will be continued proliferation before there is consolidation. At some point in this journey, there is definitely an aggregator role that is quite interesting for somebody to develop.
In the meantime, we as consumers, with all these fantastic things happening around us, our curiosity will drive penetration and it will drive more stacking. To be relevant in that context is of course extremely important. All of this means that we are more than doubling the number of available subs in the Nordics. 124% subs growth means that when we say we want to double, it's actually us taking our fair share of the growth, maintaining a solid market share. The user engagement, as I mentioned, extremely important. You want your consumers, your subscribers, to start more streams, to spend more time on your platform every single day. We have seen, and we've used 2016 as a starting point, because that's when our journey really started with Viaplay as the number one direction for us as a company.
The starter streams per user per month has increased over this time period with 36%. You should think about that number in the context of all the new content that we've added, of course, but you should also think about it in the context of all the new propositions available out there. We have strengthened the relationship with our subscribers. The share of users that spend time with Viaplay every day of the month, almost every day of the month, is now close to 20%. You go to Viaplay every day, every day of the month. That is a quite extraordinary achievement considering the availability of content out there. We have broad reach, both when it comes to the demographics and the various platforms of which you can access Viaplay. What we saw in 2020 was that streams by device was driven very much by the big screen.
That is probably down to the fact that we spent more time at home in 2020. That's also good because it educates all of us the benefits of streaming as opposed to zapping around for traditional channels. The user experience has been explored to a greater extent by the use of the big screen as the driver for Viaplay in the past year. The customer age profile is of course driven by who pays the bill, and there is much more detail behind these numbers, but we are set very firmly in the 31 to 50 range, sorry. We have seen growth, and this is also a pandemic effect. We have seen growth in especially the 50+ segment. We have reached more of the longer tail of the market, if you will, earlier than we anticipated. That I think is a clear pandemic effect.
What we see today is that that is continuing. That move over to streaming as the main platform to start sourcing content from when you get going, when you want to watch something during the day, that drive is something that we can continue to build from. We're building a loyal base. Both our TV series and movies package and our sports packages that includes everything has reduced churn quite significantly. In our industry, churn and return is a very, very common theme. To get as many as possible to return as quickly as possible is important. We have seen churned customers returning within the year increasing by 20%. All of this has driven the value of Viaplay and building the lifetime value into a stronger position.
We see equal development in our two main packages, TV series and Movies, and Total, around 45% up in the value generated from those subscribers. That is an important number to have in the back of your head when you think about the value that we can create growing the revenues in the Nordics the coming years. We are ramping up Viaplay Originals. When we started this journey, we had various discussions, of course, and a lot of iterations on how to get to the right level. We said, "Oh, getting to 20 per year, that's going to be a stretch. It's going to be tough." Success feeds success. Then you have to be audacious to reinvest and double down. We've done that now a number of times, starting in 2018 with around 15 to 50 originals on stream this year.
This number will continue to grow. You will hear much more about that from Filippa later. We have also continued to invest in sports rights. I mentioned Norway and Finland. In Norway, we add the Premier League next year, and in Finland, we add Formula 1. Both AAA, very important rights for those markets. No. We will not remain happy with just moving the subscribers that the current rights holders have over to us. We want to find new ways of creating packages and ways of interacting with the subscribers and creating value for money proposition that drive real growth into and over to streaming. The smallest common denominator in traditional TV and paid TV is that it has gotten massively more expensive. That has been the antidote versus the loss in customer interest. We think there are other ways to create value.
Then I'm really excited about, of course, moving over the winter sports, who have never been truly commercialized and never really streamed over to Viaplay. This, of course, means a lot for Sweden, Norway, and Finland as we go on stream with the FIS winter sports rights later this year. Last but certainly not least, I'm extremely proud that we have continued to invest in women's football. Peter will talk more about that later. In 2023, we are the proud home of the FIFA Women's World Cup 2023 in Denmark, Norway, and Sweden, and we have much more to come in that area. Partnerships is what Kim will talk about later. We believe in partnerships on various levels. We believe there is value to be created rather than just disrupting what has been taken for granted by many. We can now move that into new ways of creating value.
It's not always easy, and sometimes interests collide, but at the end of the day, you manage to massage something new and interesting, and that is good for multiple parties in the ecosystem where we find ourselves. Our growth accelerates significantly in 2022 and 2023. These illustrative graphs are there to show you that we're not on a linear journey, and we're not waiting for a pot of gold at the end of the rainbow in 2025. 2022 really drives the beginning of the journey that we're set on. Then, of course, things slow down and mellow out over time as penetration and growth more normalizes. For us, this is very, very important to get going early so that we can establish the relationship with the customers as soon as possible in this growth phase that we find ourselves in. Our updated Nordic targets.
We remain with the 6 million subscribers perspective in 2025. The number to keep in the back of our heads now is that we will hit 4.3 million subs at the end of 2022 already. The growth remains 13%-15%. In 2022, you should expect 20% growth. The EBIT margin, still targeted at 15% in 2025, we have now a firm and confirmed, in many ways, ambition to hit 20% in the near years after 2025. Moving over to our international expansion story so far. This is, of course, a lot of the theme of the day, and you will hear more about the future ambitions and the new markets. Let me update you on where we are with the markets that we have gone into so far. The international streaming challenger.
That is what we have now decided as our vision for the coming years. We don't want to talk about just European, and we don't want to talk about just Nordic. International says something about what we want to achieve, says something about who we are, a company with more than 45 nationalities employed. We are the international streaming challenger. We have the capabilities to succeed. If I start with the first one, streaming is the future, you think that is really to break in an already wide-open door. Yes, streaming is the future, streaming is the present, but there are various ways to think about streaming as an opportunity. It is, of course, a consumer opportunity. From a broadcaster perspective, and we are in the midst of transforming ourselves, streaming is a matter of cost efficiency.
It's a way to move yourselves into new ways of distributing your content and to scale up and down when necessary in ways that with previous technologies took time and costed a lot more money. If you are a broadcaster and you do not move over to streaming in the coming years, you will have a cost issue. We have invested heavily in a best-in-class platform and product, and we will continue to invest heavily in that product together with our partners. We have long-term content and distribution partnerships, both in development of exclusive content and with the acquisition of content that can travel across our footprint. We have only just begun, as I think we have demonstrated over the last year that we are always on the move. We started our journey expanding Viaplay in April 2020, in the midst of a pandemic.
We completed our footprint in the Nordics by launching Viaplay in Iceland. That has been a success, both from a launch point of view, a market growth point of view, and a subs growth point of view, and we see a lot of positive feedback coming from our Icelandic customers. This year, we launched in the three Baltic countries, Estonia, Latvia, and Lithuania in March. I'll come back to that and give you some more flavors on how that has gone. In August, we went to Poland and launched in a big way in Poland. Some more facts shortly on that. U.S. later this year, Netherlands in the beginning of next year, and so on. This is a journey that we see up till 2023. This will take us to 16 markets at least.
In March, we launched in the Baltics with a very, very attractive customer offer, a rich portfolio of movies and series, a lot of it driven by continued acquired content that we wanted to put on the ground in these countries. The driver to go into the Baltics was sports. A strong portfolio of sports rights that is now growing in the coming years. One package, all content, EUR 9.99. We quite immediately after launch signed two very attractive distribution agreements with Tet and Elisa, and we expect more of those to come as we go along. The story so far, launching in a new country is always a challenge. We have done well in all three Baltic countries.
It was also a good pressure test for us as a company because we launched in three countries the same day, three local languages, and a fourth one on top. Four languages, three countries. The growth has come gradually, as per our expectation, and is now going stronger as we've added Champions League. Most watched sports has been driven by the two tops that we expected, Formula 1 and NHL, and then gradually we will see more football the coming years. On the top title selection, as you would expect, there is a number of Hollywood blockbuster series, well-knowns in there. What I take away from this is that we have three Viaplay Originals in Nordic languages in the three Baltic countries hitting the top title selection. That says something about both demand for and opportunity in Nordic storytelling.
We continue to up our game in the Baltics. We're adding the Premier League next year. We're adding the local men's football national teams the coming years, leading up to the Euros 2024 and 2028. Viaplay becomes the go-to destination for all key and premium sports in the three Baltic countries. More originals coming. We have also announced our first Estonian original going into production very soon. We continue to work with the studios. One thing that you will definitely take away from Filippa's presentation later is that all the changes around us does not mean that all the studio content disappears from various platforms. There are just new ways of creating value together, but it's the originals that will do the differentiation job for us in the Baltics as it will in all of our markets.
In August, we launched in Poland in a big way. Poland is a significant market. Just to recap, the five Nordic markets, slightly more than 12 million households, the Baltics, slightly more than 2.3 million households, Poland, more than 14 million households. With fairly low penetration on streaming, it is a massive opportunity. It is a sports-driven market, as numbers will show. We have a strong movies and series package. We have acquired the most prominent sports rights in Poland, the Bundesliga. We've added more additional rights, and next year we up our game even more. 34 złote per month, one package, all content. That equals EUR 7.50. An affordable, very attractive product that has resonated very well so far with the Polish audience.
We have already been recognized for our innovative, new-thinking approach to producing and distributing content, especially sports, of course. Three significant distribution agreements, UPC, Vectra, and Play, give us a direct pipeline to millions of households in Poland on top of our own direct-to-consumer offering. This is the direct-to-consumer balance illustrative, but it shows how quickly we have ramped up. I think I can proudly say today that the launch in Poland is for sure a success, driven by sports, something that will expand over time. Bundesliga is doing a fantastic job for us, but also when we see local participation in the Europa League, we see very attractive sales coming out of that. Again, we see three Viaplay Originals in the top title list. Extremely important for us for the continued journey. We will produce local content in Poland as well.
Already, we have one first non-scripted Polish production on air. We will continue to develop into scripted productions for Poland. We want more. It is 14 million households. One of the reasons why we are investing more next year is that we've decided to take the next step in Poland by adding the Premier League from next year until 2028, sitting very nicely with the Bundesliga that we have until 2029. Later this year, we add NHL, and 2023, we add Formula 1, probably the strongest sports package ever in Poland. Originals and Studios will continue to grow, and we will become more local as we go along. United States, mid-December, well in time for Christmas and the Christmas present of the year, Viaplay launches in U.S.
It is the largest streaming market in the world, with the highest penetration of SVOD per household, highest number of services per household, and an enormous number of subs. It is a crowded market, to say the least. In a crowded market, you really need to stand out. We have a humble expectation for the U.S., an expectation of a very clear proposition that will find its audience in a very good way. There is demand for what we represent, Nordic storytelling. If the market is big enough, that niche will also be big enough. We bring the best of Nordic storytelling. More than 400 hours of exclusive, not seen before Viaplay Originals at launch. More than 1,000 hours of third-party content, all focused on Nordic storytelling, coming from partners, public broadcasters, various ways of sourcing content into one destination in the U.S.
Some of it exclusive, some of it has been seen on some other platforms, but not collected in the way that we do it. We embark on our journey in the U.S. with distribution partners. Our direct-to-consumer app will follow a little bit later. That is a very conscious decision that we have taken. This is a good way to get our feet on the ground, work with some of the biggest and the best, and then gradually grow from there to start to attract direct-to-consumer offers. Kim will talk more about it later, but we're very happy to say that we have already now Comcast on board as a distribution partner for the U.S.
Of course, we bring an attractive price point for this very targeted, specialized offering of $499 recommended retail price per month. Netherlands, the market that we announced after last year's Capital Markets Day in the midst before this year's Capital Markets Day, the reason for that announcement was, of course, that we saw an opportunity to go in and go in heavy. It's a very attractive market. 8 million households, roughly twice the size of Sweden, as an example. Penetration, slightly shy of the 60 that we see in the Nordics, just below 50 today. It will grow. We expect it to grow a little bit slower if you look at all the data that we have now. I believe that number can be higher, because this data is built on assumptions before Viaplay comes to the market. Of course, we are market makers.
We come to drive streaming penetration in the Netherlands. I do believe that those 66% in 2025 can certainly be higher. The stacking will also continue to take place in the Netherlands, and the number of subs addressable, if you believe in the 66%, is around 10 million subs at the end of this strategy period. We will drive more the growth than that. Like Poland, we have decided to invest in probably the strongest sports package ever in the Netherlands. The Premier League, Bundesliga, Formula 1, and Matchroom, which is the ever so popular darts in Netherlands. We will also bring almost 6,000 hours of series, movies, kids content, and Viaplay Originals, and we will produce local Dutch originals, because that is one of the elements in choosing the Netherlands. It is a vibrant, creative community, super attractive to develop content that can travel from.
The key takeaways from where we are right now, we have launched five countries since we met last time, at a Capital Markets Day. They have been successful. I definitely want to point to Poland, as a way to quickly build up in a large market, which has, to some extent, influenced the choice of going for more large-scale markets, albeit different, for the coming years. We're on track for the U.S. later this year, the Netherlands in the beginning of next year. We have guided for 500,000 paying subscribers by the end of 2021. Our international expansion is well on track.
Thank you, Anders. Please join Matthew in the Q&A area. I'll be the first to tell you that we've had a really busy year. Obviously, we have a busy year ahead of us as well. Very exciting. Now it's time for our first Q&A session. Over to you, Matthew.
Thank you, Mia, and welcome, Anders.
Thank you so much.
That was quite a session. How are you feeling?
It was. Well, you're still awake, so that's probably a positive, yes.
Absolutely. Lots of energy, which is great to see. Exciting times.
Indeed.
I want to say thank you everyone for your questions. We’ve got quite a few rolling in. Again, just to remind you, if you want to ask a question, just click on the Submit Question button to the bottom left of your screen, put your question, your name in, and then I’ll ask Anders and the other presenters your questions. I think first up, we have an interesting one here, which comes from Omar Sheikh at Morgan Stanley, which is: Long term, why limit yourselves to 16 markets?
That's a very good question. Omar, maybe you heard. Omar, I said at least 16 markets. There is definitely room for more, but we are disciplined, and we want to be focused. We will evaluate every opportunity on its own merits. Scale feeds scale, and this will definitely support that. This is a five-year strategy period, 2020-2025, and we have now talked about what's going to happen up till 2023.
Great. Second question we have here: What enables you to compete with large, well-funded technology companies when you are sourcing ideas and talent for your originals?
It's a matter of being able to compete with anybody, really, and to be very clear about what you can provide in that dialogue. It's not just a bidding war of who can pay the most. It's a matter of actually being willing to go in, own, and love the content that you produce. We have many examples of that, where I'm pretty sure that some of the larger scale technology companies or platforms would have loved to get the content that we're doing, but the producers decided to do it with us. It is definitely a possibility to compete with anybody.
There's something very specific about this Nordic storytelling that has worked around the world.
Yeah.
It's more than that, isn't it? Because we're bringing not just Nordic storytelling, but potentially other international content with that as well.
Yeah, you're onto something very important there, because Nordic storytelling is not about a language. It's about a perspective on how you tell the stories. You can do that in Swedish or Dutch or Polish or German or English. You create something that is quite unique, and that is a craftsmanship. We've built it up, and others can also build it up, but we have a head start, and this is what we do. We focus so much on it. I think that is something that will feed a lot of interest from creators, writers, talent out there to say, "God, we want to work with that company because this is what they do."
Yeah. Okay, just shifting gear a little, one question here. You raised the Viaplay international subs target by 1.5 million.
Yes.
Is that mainly new subs from partnerships, i.e., B2B or direct to consumer as well?
It's a combination that reflects our expectation that the launch in any given country will be, depending on the approach, will be driven in the first part by D2C, then quickly, we add distribution agreements, and then that tips over to the other side, and then it normalizes over time. I think the Nordics is a good pointer on how it will look. I think any given market where you are ready to work with distribution partners, it will be a 50/50 or 60/40 to D2C's advantage split that we're looking at in all of these markets.
Okay. No, great. I think moving on, a quick question on the short term. Could you help us with a breakdown of the 2022 Nordic organic growth drivers by segment? How much in Viaplay is driven by volume versus price?
2022 is a volume year. Let's start by establishing that, because some of the new rights come into play in the second half of the year. We want to work with the price. As I also alluded to, it's not just a matter of taking over the Premier League in Norway, as an example, and then let the price shoot through the roof because that's what the current incumbent is doing. That's not our approach. We want to get penetration, we want to get happy subscribers. Use our pricing power, as we have done recently in some other examples, without significant churn. You want to own the good relationship first, so it's subs driven. It will be price driven in a gradual way going forward.
Okay. We have a skiing fan here. Isn't the Nordic skiing in Norway a huge mover of subscribers in our planning?
It is a huge mover. It hasn't been tested before. The winter sports has been with public broadcasters since the dawn of television. This is a new way to capitalize on that, it's almost a religion in Norway and to some extent in Sweden. Fantastic, and we take it on with great humility and great respect for what we can do with it. We will start with putting a lot of the content on linear TV, and that is also a way to take the potential future subscribers by the hand and show them the benefits of Viaplay, because it is a slightly different segment and it's a slightly different viewing pattern, and we want to take this step by step. We have five years at least with these fantastic rights, and that will yield a lot of opportunity for Viaplay, no doubt.
We will take it step by step.
Okay. On the same theme, if you try and aggregate all those sports changes that we'll see next year in particular, what level of subscriber opportunity do you think that collectively represents?
If you just look at current numbers that we see with the incumbents, and again, we are there to beat those, we are looking at north of 400,000 subs coming from those sports rights alone.
Right.
In my view, the number is higher.
Great. Then we have a couple of quick questions on the non-Viaplay businesses, if you don't mind. One is, there was some discussion that an Allente-style approach might work for the linear TV channels. Obviously, we've seen some of the moves in Europe now, potential combinations of free TV channels.
Yep.
How's that evolved, and is that something you're actively considering now, or is it more of an industry trend, or how do you think about that?
It is an industry trend that can potentially become interesting, over time. I think the very honest answer is that we haven't spent that much time on it now. Allente is there now to deliver on the agreements that we have on the distribution of Viaplay and the synergies that we and Telenor agreed on when we created the joint venture. It's about creating a sustainable future also for Allente and the employees. There are other ways to think about monetizing that opportunity along the way. For now, we are happy with where we are.
Great. Okay. We have another question. Could you provide some more flavor around the churn development? What has been the key enabler behind the churn decline that you mentioned earlier? What churn have you assumed throughout the strategy period through till 2025?
Well, if I take the latter part first, for simplicity reasons and not to build in one sort of lucky pill in the business case, we have assumed that churn will stay pretty stable. We're not betting on declining churn, which is a great way to create an interesting case with high risk. We're not doing that. We're expecting stable churn. The main driver, there is no silver bullet to driving down churn other than making sure that your product works and you add more and more interesting things to watch. That's exactly what we have done. The customer engagement numbers that I showed earlier, they are there to prove that that model is working.
Yeah.
It is a step-by-step approach. More sports rights, better studio productions around those, more engagement, more original content. We have now almost one new original coming every week. Let's increase that, shall we?
All right, great. Thank you all very much for your questions. We're up to 50 questions in here, so I'm trying to get through them as quickly as possible. Another one we have is, in your existing markets, would you say the data so far shows that the pandemic boost in engagement is not temporary?
It is not temporary. I can confirm that, without any doubt. Yes, there was some pull forward in some segments that probably would have committed to streaming a bit later. The continued engagement is there and the willingness to use streaming as the first point of destination when you want to watch something, that has not changed. That change has happened. Yes, there was a little bit of an extra boost in some segments during the pandemic, but they were not temporary. The change has happened.
Okay. We have a question from Nicolo, who's doing his master's degree in Copenhagen.
Oh.
Yeah. Here we go. What are the core values that NENT wants to make worldwide customers be aware of? What is the long-term goal of Viaplay related to Nordic content?
It's a brilliant question.
Great question.
A very great question. Storytelling is about opening new perspectives and creating room and a stage for new voices. That is a promise that we want to bring to the world, that we want to move away from stereotypes. We want to open doors and opportunities for those who have not had those opportunities before. We want more stories to be told. We want more diversity. We want more perspectives on the world around us. That is something we should be known for as we travel the world. Big shows, small shows, niche shows, blockbusters, more artsy stuff. There is room for voices in our ecosystem, and that is something that we want to bring to the world. Very good question.
No, great question. Are there any advertising possibilities around your sports content and F1 content in the Netherlands in particular?
There are some opportunities. There are some free-to-view obligations around Formula 1, and there are some outside platform opportunities around F1. I want to be very clear that the customer promise of no advertising when you subscribe to Viaplay, that one we will not tamper with. There are other ways around the right that you can create value for ourselves and for the other partners that Formula 1 has. Our promise is that when you subscribe to Viaplay, you get everything and you don't get any advertising.
Okay. I think this is probably going to be a one-word answer, but what growth pace should one assume for other subscription and advertising over the next two to three years? Is it the same as last year?
It is a healthy one single-digit number.
Okay. Same as last year.
Yes.
Sort of market.
That's a repeat.
Okay. This is more a kind of philosophical question, which is, why is it so important for you to communicate a large set of detailed targets? How do you view the risk that it reduces your flexibility in a rapidly changing market going forward?
Yeah, also a very good question. We are embarking on a journey where a lot of the upside and the belief in what we're doing sits in the future. If you want to invest in NENT, you need to trust what we have done, and you need to believe that we can achieve what we have ahead of ourselves. If you hold too much back in that journey, you either demonstrate that you're unsure about what you're doing or you simply don't have the numbers to fully support. We work in a very detailed way, and we're proud about that. I don't think the flexibility of holding back trumps the value of actually sharing what we see ahead of ourselves. If we don't deliver, we don't deliver. That flexibility is worth nothing.
It's better to take anybody who has an interest in NENT with us on the journey and share as much as we can without jeopardizing our competitiveness in the market. That's why we hold back some stuff, because we don't want our competitors to know.
Yeah.
When it comes to how we monetize, how we create value for a shareholder, I think transparency is a benefit.
For sure. A very key question in the context of that journey, do you see international investments losses peaking in 2022 based on the current ambitions?
We see a significant peak in 2022. As I said before, that is a very, very conscious decision to double down early in the strategy period and get the benefits of that, because there are multiple layers of benefits to get those subs in early. Yes, out of the SEK 3.8 million in accumulated losses, SEK 1.5 million sits in 2022. That is a significant part, yes.
Okay.
I would prefer to see it as investments rather than losses.
No, absolutely.
Right should be right.
Absolutely. Another question. What has changed to drive the increase in the Nordic revenue target when the subs target has not increased? We've increased the upper end of the range.
Comfort in pricing power. Last time we said we were going to do price increases. We've done some price increases with less churn than anticipated and with probably more elasticity in pricing than previously anticipated. We're also learning more as we go along, thinking about how we can create new packaging opportunities and values. It is the power of pricing that lies behind that.
Okay, great. Another question. When it comes to Comcast, can you elaborate on how Comcast will distribute Viaplay and your subscriber expectations in the U.S. as a result of that?
Kim will talk about that a bit later, but they have a platform called Xfinity, which is a brilliant platform, with a deep reach in the U.S., and Viaplay will be on that platform. Kim will say more about that later.
Okay. spoiler, coming later.
Coming later.
Okay.
Cliffhanger.
In terms of the competitive landscape again, how is it that we can communicate 25% Viaplay international margin targets without knowing exactly what our peers and global tech companies are planning to do over the same period?
Well, we see the value of the content that we hold. If we get the subs who love our content, we know the cost of getting to that point. That is indifferent of what the others are doing. If we get beaten on our proposition, all of this goes out the window anyway. Of course, we can communicate a very clear ambition based on everything that we know. This is the opportunity.
Yeah.
I, of course, believe that we will be able to hold our own, so to say, if we stay very focused. This is not a matter of becoming bigger or competing at the same side of the pitch that you find the global giants on. This is a way of gradually build something that is long-term sustainable and actually very attractive for the consumers. We will remain very focused.
Okay. Then a question about the price point in the Netherlands. We've announced the U.S. now.
Yep.
When does the Netherlands price point come out?
Well, I don't want to say. The Netherlands is a very competitive market, and there has been a lot of speculation and rumors around price, of course. We want to say as late as possible for simple competitive reasons. It's going to be very affordable. It's going to be a positive surprise for the Dutch audiences. Also, I think a positive surprise when you see the richness of the content that we bring and the quality of the studios that we are now building in the Netherlands. One thing that I want to say, and I know there's been speculation in the Netherlands, "Oh, it will cost like in Sweden, EUR 40." It will not.
Very clear. Thank you. On the same note, actually, when it comes to B2B deals in the international markets versus the Nordics, are we looking at revenue shares of a sort of equivalent level, or would it be different?
No, we have a model that I think is proven and that we will sort of stay firm to. We will do like we've done in Poland with Play, as an example. It is very attractive to get deep penetration quickly. There is a split between what we call soft bundle, meaning opt-in for the subscribers, also called hard bundles. The hard bundles, if you have an attractive proposition, it means you get quick penetration faster, and then you can sacrifice some of that rev share for the benefit of the distributor, because the value back is so significant for us.
Okay. A broader question, why did you decide to go after Western European markets versus heading east, where maybe some of the penetration levels could be lower, for instance?
It is a risk and reward call. We want to do both, and we're doing both. We also see the benefit of a penetrated market that are ready to commit. We want to build in some markets like Poland, which is a significant market. In some markets, we want to get penetration more quickly, like the Netherlands. It's a trade-off. Coming back to Omar's earlier question, why only bet on these markets in the strategy period? There could be more.
Okay. For the markets that we are launching in, what possibility is there of seeing sports content in those markets in the not too distant future?
Buying sports rights in Germany or U.K. can give anybody a heart condition. We want to go about this in a very focused and disciplined way. It is about getting our boots on the ground. It is about building credibility, and if and when we do sports in any of these markets, we don't necessarily need to do the big triple A rights from the beginning. The beauty of a versatile, agile, fast-moving streaming platform is that we can build also on some smaller sports and build up credibility. Touching Bundesliga in Germany or Premier League in the U.K., the credibility need to be enormously high. You want to deliver something that blows the minds away of those watching that this is really good.
Yeah.
We want to build something, but sports is always in scope for us in Europe, not in North America.
Yeah. Another bit of a teasing question is, how tempted have you been to raise the subscriber target for the Nordics for this year?
I'm always tempted. I have more neutralizing factors around me to say that we should balance things out, and then we do it when we feel 100% comfortable with everything. There is always opportunity. Jokes aside, it is very competitive markets. While I believe in the power of the content and the pricing power that we have ahead of ourselves, let's make sure we can take this step by step.
Okay. I've never been called a neutralizing factor before. You mentioned consolidation in the future. In that context, who's a good partner for NENT? Is it one company or is it many companies? How do you think about that?
The way I see it now, it is many companies. It is not necessarily consolidation the way people are thinking about somebody buys somebody. There are JV opportunities, as we have proven with Allente. There are partnerships that we have in many of our markets now that has nothing to do with a legal marriage, if you will. It is a pure commercial relationship. All of those should be explored before we think about anything else.
Yeah. For the U.S., going with partners rather than D2C, is D2C something one waits with or what's the timing there? How do you think about that?
There are a number of components in that. It's a large market, Mia will talk later about marketing and using the power of partners in the U.S. It's a good way to get started without breaking our back, so to say, if we would go full monty direct to consumer from day one. That's one reason. The other reason is that if you look at the rollout that we're doing now, we have specific language markets like Poland, Netherlands. You look at the new markets together with the U.S., we're actually clustering them around English and German. You have U.S. and English-speaking Canada. That's one cluster that allows us to develop our platform in an efficient way. Then you have Germany, Austria, and German-speaking parts of Switzerland. That's one cluster.
There is some portfolio management when it comes to rolling out our platform and building our platform that lies behind these choices as well.
Okay. Thank you. The forecasts for sub numbers for next year are very encouraging. How do you come to these figures? Is it top-down modeling or do you have bottom-up studies that support this?
We have bottom-up studies supporting everything. At the end of the day, nobody can believe in sort of external elements only. You have to have an ambition that you add as the spicing on top of all the simulations that you've done, all the sensitivity that you've done, we've arrived at these numbers. They are encouraging, they are ambitious, and they are realistic.
Okay. Again, on the M&A front, press reports suggest BT Sport in the U.K. is for sale.
Yep.
Would you be interested in owning that asset in whole or in part or at all?
Well, I think my negotiation position would probably not be strengthened if I said that I'm super interested in this forum. No, M&A is not on the top of our list right now. Customer bases are relevant, but it would still be a journey where we would have to transform into streaming, which is what we're doing. Sports-wise, you can achieve in other ways. Lukewarm, I would say, on that one.
Okay. For the international side, again, 500,000 subs by the end of 2021. What revenue number could be attached to that, do you think, given the fact it's relatively early days still?
Yeah, it is early days, and it's fairly back-end loaded given the growth that we have, and also driven to some extent by the fact that we're going for penetration. I would urge everybody not to put too much emphasis on the revenue that we will present for Q3 and Q4, but the ramp-up that that then yields in 2022 is, of course, attractive.
Okay. I think we've got time for one more question here. If I look at the household penetration for Viaplay in Poland and the Netherlands, where you have exclusive sports rights, how far do you think that penetration can go?
As I mentioned, we didn't show any outlook for penetration in Poland. There was 66% penetration by 2025 in the Netherlands. I think we can beat that by driving more in the markets. The sports rights will do part of that job, and there is established fan base and a lot of numbers that we can use to model that penetration. What if you package things differently? What if you find new ways of reaching new target groups over this long period that we have with these sports rights, the majority until the end of the decade? That will do a great job for us, and that's also why it's so interesting for many of the sports rights owners to partner with us, because we don't just want to put our boots on the pitch and broadcast the sports rights. We want to develop them.
There is further potential. Let me finish this one off just with some numbers. Take Netherlands, more than 2 million viewers at the latest Grand Prix in Formula 1. More than 800,000 viewers on the darts broadcast over the weekend. There is potential.
Yeah, absolutely. Good, Anders. Well, listen, thank you very much. We've a lot of questions there. I don't think I've done entirely all of them, but hopefully most of them. Any that we haven't addressed, obviously, we'll come back and.
Come back later.
separately about or take later in the sessions. Many thanks for that. That concludes this initial session. What we will do in the next session, in episode two, is have deep dives into various parts of the business to give you more information and insight into what's driving Viaplay and the tremendous growth that we're seeing. For now, we're going to take a five-minute break. I know we have very few breaks. I know it's a long day, but there's a lot to say and really hope you enjoy a quick break now. See you soon.
[Presentation]
Welcome back, everyone. Now we get into the deep dives. These are intended to give you insight into specific areas that are key to the success of Viaplay. First up, we will hear from our Chief Commercial Officer, Kim Poder. Kim is going to talk to us about Viaplay and partners. Welcome, Kim, and over to you.
Thank you so much, Mia, and how happy I am to be here with you all. I am going to talk about how we grow Viaplay, in particular, how we can grow Viaplay with partners. Growing with partners is not a prerequisite for us to succeed in our markets, but it is a way for us to find mutual interest with our partners to grow even faster, to grow even more with the right models. What I will try to do today is to give you a few examples of what we have done in the Nordics and in our new markets, building new ways of partnerships with those partners, enabling us to grow faster and enabling our partners to create even more and relevant products in our markets. L et me start asking myself a question before we get to the actual Q&A session.
The first question is, why even bother about partners? Viaplay is using a technology just one click away. Viaplay has a high awareness, is very attractive for customers to join. Entry barriers are low, the content we present and offer is very attractive in a very attractive, user-friendly way. Why do we, so to speak, need to discuss even using a middleman or a gatekeeper to get out to our customers? That's a good question and a question I'll try to answer in just a bit. Let's start our journey in the Nordics, where it all started a few years back. Nordic is well known to all of us, to all of you. It's a very interesting pay TV market. If you look at the market, which excludes streaming, it has a value of SEK 33 billion annually.
The players in the markets, they represent probably 90% of all households in the Nordics, and they offer them connectivity, they offer them TV packages, and they offer them a lot of linear channels. It has changed over the past years. It has changed a lot, actually, over the past years. What we see in this market is that the trend is shifting. There's an increasing demand for streaming services and a less and declining demand for linear channels. That obviously puts some pressure on those players in the market. They realize and have realized that in order to stay relevant and give the audience of the customer something interesting, they need to adapt to the new ways of enjoying content. They need to consider how to, so to speak, replace linear channels with more relevant streaming services.
That's an opportunity for us as it is a very interesting demand from most of our partners. If we start focusing on what is in it for them, why do they consider streaming being important for their future business? Obviously, it starts with the customers. As just mentioned, since the consumers, they tend to watch less linear channels and some channels they watch, they don't really watch anymore. They prefer watching some linear channels and some streaming services. That creates this interesting demand in the market, which, of course, creates an interest from the gatekeepers, from the telcos, which creates interesting opportunities for us. That's about staying relevant, it's about increasing their ARPU, and also about making sure that they can reduce churn levels to create a sustainable and healthy business. What's in it for us?
I think the most important what is in it for us is that we are interested in growing Viaplay faster. You can argue there is a natural high market share for us in the market, something we can reach with our D2C proposition. There are also segments where partners can help us to grow faster and reach more customers, and that is always the starting point for us when we discuss potential partnerships with telcos, with TV operators in our Nordic markets and in our new markets. How can they find segments? How can these partners find, present to us interesting tiers or packages to customers that could be even more interested in Viaplay, maybe even without knowing it, because they, for some reason, haven't signed up and subscribed to Viaplay yet. Secondly, it is also about synergies. Can we actually do things cheaper together.
Two parties will have synergies in terms of lower sales and acquisition costs. That's also an advantage in teaming up together. Last but not least, what we have seen in some of our partnerships is that churn levels are actually quite interesting, and lifetime is longer when we find and structure the deals in an interesting way. That's a way of creating mutual interest for us and our partners. Let me try and give you a few examples. I'll continue talking about examples in the Nordics before we talk about our new markets. The first one is a well-known partner of ours. It is Nuuday. Nuuday is the mother company of nine brands, nine strong brands in the Danish market. You're probably familiar with Telmore, which is a very strong, interesting mobile and streaming provider.
They do different type of bundles, and Viaplay is bundled into most of the mobile products with other streaming services, but that's a very interesting proposition for Telmore and is very interesting for us to be a part of those different types of bundles. That has led to significant volume uptake over the past years. You can also, if you are a YouTV customer, and YouTV is a linear proposition but over the top. Here you can easily add Viaplay. If you want to add Viaplay, it's only one click away, and you can add Viaplay to the YouTV over-the-top product. YouSee, which is probably the most well-known brand from Nuuday, is the very established cable TV operator offered to almost 50% of the Danish households. They have slowly started to shift linear channels with streaming services.
In the old days, the highest tier you can offer included maybe 60 channels at a fixed price. Today, you see the more slim versions of TV channels and actually proactively suggesting customers that they do exchange TV channels with streaming services. If you sit with a TV package which maybe contains 40 channels, and if you consider maybe six out of those channels you don't really watch as a family, one click and then you can exchange six channels with Viaplay, which quite a lot of number have actually done. That's an interesting opportunity for us to be able to reach more customers with YouSee. We have recently prolonged our already very established and strong relationship with YouSee. Today we can announce that we will be able to reach even more households with the future deal. We are very soon able to inform exactly how.
Unfortunately, I cannot give you all the information today, it's very promising for us and also for our relationship with Nuuday. The next example is Allente. I have to admit, I am slightly biased when talking about Allente. I used to work for Viasat for quite a few years. They merged with Canal Digital last year. You're familiar with that. Obviously that was a synergy case, merging two strong satellite providers, but it's also about finding a new proposition for that company. I don't think I'm offending anyone by saying that satellite is not necessarily the first-mover technology. That said, the way they have been able to reposition and build a strong proposition around Allente is doing many things, also including Viaplay.
Actually, if you look at the tiers they offer at Allente, in most tiers, Viaplay is always included, which means that recently we have passed 67% of their customer base, meaning that two out of three of Allente customers have direct access to Viaplay. Even with our very ambitious brand, I think it's fair to say that 62%-66% penetration within a quite huge customer segment, that is a fantastic achievement. It has strengthened their proposition. It has strengthened our reach, our subscriber volumes. This is a very attractive way of us being able to increase our volume. If we go outside the Nordics, it's interesting to see our new markets. This is the footprint of the markets we had announced until today. It is Baltics, Poland, Netherlands, and it is the U.S.
Interesting markets for us, given their size and given the appetite for streaming services. We focus on Baltics and Poland, where we have already launched Baltics in March and Poland just six weeks ago. I'll try to give you a bit more details about the deals we have structured in those two markets, but mainly when it comes to Poland. In Poland, we have signed three agreements, two of them which were the first to be signed before we launched in Poland, which was the two leading cable TV operators, UPC and Vectra. Very established players in the market. They have a reach of 3.2 million households. They are complementary, they are in different regions, which, of course, is really interesting for us to be able to work with them. They offer Viaplay in different shapes and forms. They do soft bundles.
They give access to customers with broadband, and more important, they offer it in interesting tiers to their TV customers, which is a way for us, of course, to attract those 3.2 million households in Poland, which is a fantastic start. The way we see they are engaged as a partner, pushing and promoting Viaplay is simply fantastic. That's very promising, I must say. What is also interesting is what we have done with Play. Play are an amazing story. They have basically in no time, they have reached 15 million mobile subscribers in Poland, which is an amazing number for us to be able to work with. We are excited to be able to have a partnership with Play, enabling us to reach those 15 million customers. They push for promotion of Viaplay.
They do a lot of different bundles, so you can buy mobile subscriptions with short commitments or longer commitments, depending what type of customer you are. Very interesting opportunities they use Viaplay in their retail stores. We are very visible in that type of partnership. They have appetite for more. Play, they are the challenger in the TV market, and they have decided that Viaplay will play a very important role for their ability to take market shares in Poland. They decided to add Viaplay as a hardware bundle into their premium TV package. A package which is mainly linear TV channels, but now includes Viaplay always. At launch, Viaplay was offered not as an option, but included in all their current subscribers' packages.
Everyone with a package already, they get access to Viaplay, and all renewed and new customers will automatically be able to use and enjoy Viaplay, our service. Which means that on their journey, where they are to grow, of course, we will be a part of that journey, which is a fantastic opportunity for us in that market. If we talk a bit about our new markets, which we are launching just around the corner, I think what is interesting here is that although they're not yet familiar with our brand, so the Dutch population or the U.S. population, they haven't learned to pronounce Viaplay yet.
What is a great opportunity for us in those markets is that if we take U.S., we actually today can announce that we have just agreed with Comcast, the U.S. company, that we will continue our long-term partnership in the U.S., enabling Viaplay to offer its Nordic content with Comcast on their technology, which is amazing. Comcast will offer our content on the Xfinity X1 box and on their Xfinity Flex platforms, which actually give us access to potentially 30 million households and homes in the U.S. That is an amazing opportunity for us to be able to work with Comcast at launch end of this year. Netherlands is a fantastic opportunity for us. As said, they haven't learned to pronounce Viaplay yet, but the interesting thing is that they use our content.
As from launch, the content will only move home, we will start enjoying customers being able to use our content. That is mainly about sports, because there's a lot of appetite for especially Formula 1. Peter will talk a bit later about our sports content, there is so much interest around Premier League and Formula 1 in that market. They just have to learn where to go and find Formula 1 and Premier League and all the fantastic content that we'll bring to that service. That's going to be so exciting. If I am to conclude on my 15 minutes, the few takeaways, why we think that the growing with partners is interesting and what it takes to find a mutual interest in those partnerships. First of all, it's about unique content.
As we are able to create a unique B2C proposition with unique content, we will create interest from B2B partners because they have a demand for more streaming. This partnership will drive more growth because that's our focus, and that's what they can do for us, activating large customer bases in those markets. It's also a major opportunity for them because they will see in those markets that linear will shift into streaming. Using Viaplay as a vehicle for protecting ARPU and protecting customer bases, but also to attract new customer bases segments, that's of course, interesting for them. Last but not least, we will have a head start in those new markets. We have Nordic content where there's a big appetite to consume our content, and we have interesting sports, which is well-known and established in these markets.
That concludes my 15 minutes, and I'm happy to take questions later on. Over to you, Mia, again.
Thank you, Kim. Please join Matthew ahead of the upcoming Q&A session. Next up is a presentation about all the amazing content that you can find on Viaplay. From your favorite Hollywood series and movies to our very own Viaplay Originals. Please join me in welcoming our Chief Content Officer, Filippa Wallestam.
Thank you, Mia, and thanks so much to all of you for listening in this afternoon. When we met last year, I talked about what it is that makes Viaplay's content offering so attractive. I explained that it's the combination of our own produced content, our strong sports rights, and all of the acquired content we gain through our partners that makes our offering truly unique. This strategy has a proven track record and is continuing to drive our offering. What has happened in the last year is that our own produced content is becoming even more important. Today, I'm going to focus on our own produced content. I will explain why it is so important, what we are doing to further strengthen our offering, and share some insights into our future plans and ambitions.
Before we dive deeper into our own produced content, I would also like to share some light on how our partnerships are evolving. Streaming means that our whole industry is going through the biggest shift ever. As you know, many of the U.S. studios are now going directly to consumers. I know that many of you are asking, how is this impacting Viaplay, and more specifically, our ability to secure content. The truth is that we've been planning for this for many years. This is the main reason to why we started to invest so aggressively in Viaplay Originals seven years ago. We moved early, and we're gaining the rewards from that move today. It's also important to remember that acquired content is not what makes customers sign up to Viaplay. It is the volume that is important, since the volume drives retention.
We are, for sure, making sure that we are securing this volume in a number of different ways. Firstly, we are still very much working closely with some of our long-standing partners: Sony, NBCUniversal, Viacom, and Warner, just to name a few. The changing market dynamics is also opening up for new opportunities and new options for us to work with new partners. It's fair to say that today we have many more partners than we had five years ago. It's not only the number of partners that is changing, it's also the models in how we work with them. This, I think, is particularly interesting. A good example of this is the deal that we have with Starzplay. Starzplay is very much a strong streaming service of its own, with a strong presence, especially in the U.S.
In the Nordics, our Viaplay customers will be able to access all of the Starzplay content ingested onto Viaplay from the beginning of next year. I think this is a great example of how two streaming players are actually working together, finding new ways of elaborating, much to the benefit of the consumers. To conclude, I am not worried about the fierce D2C competition or about our ability to secure strong content. This is what we've been planning for a very long time, and it's even opening up new opportunities. We still very much value our partners, it's just that we're working with them in slightly new ways. Even if partners are very important, the key differentiator and our main priority is the content that we produce ourselves. Let me start with our Viaplay Originals.
We produced our first Viaplay Original in 2016, very early on we were ambitious and said that we wanted to premiere at least 20 Viaplay Originals in the Nordics per year. At this time, I think that many people didn't just think we were ambitious, probably borderline crazy. It didn't take us that many years to actually deliver on that promise. Last year, despite the challenges with the pandemic, we actually premiered 40 Viaplay Originals, this year we are set for 50. We are now starting to reach a healthy balance in the Nordics with a strong number of shows, next year you will see an increase and especially in Norway and Denmark. Our target number of premiered Viaplay Originals for next year is 60. It's not until 2023 when you will start to see a real ramp-up from our new markets.
We are already working on a number of very interesting projects in our new markets, to produce quality takes time, that is why you should expect to see the shift from our new markets from 2023 onwards. We are clearly ambitious when it comes to our Viaplay Originals. An important question to answer is, of course, why? I have been talking a lot about quantity, everyone working with content knows that it is, of course, all about the quality. Here I am proud to say that our shows are very good. Our Viaplay Originals have really started to go from strength to strength in the last few years, we can now clearly see that in the performance. If we look at the first half of this year, six out of the top 10 most watched programs on Viaplay, excluding sports, were Viaplay Originals.
The same number for sales is as high as eight out of the top 10 sales driver were our own Viaplay Originals. Our shows have also won awards and prizes, not only in the Nordics, but also internationally. This drives up interest, and maybe even more importantly, gives us the ability to attract and retain even more talents, both internally and to work on our shows. This is proof that our strategy is working, and that original storytelling is what our Viaplay customers want to see. Our fast ramp-up of Originals also means that we are starting to build a strong catalog of shows. We have now premiered 135 Viaplay Originals, and this number will increase to 150 by the end of this year. A large part of these shows are controlled by us.
For the majority of the new shows that we commission, we make sure to control the global rights to give us the ability to be flexible in our international expansion plans. We are doing this because we believe that our Viaplay Originals will be the cornerstone for our content offering in our international expansion. When it comes to the catalog, success drives success. When we create a successful show and premier sequels, the value of each season increases. Sequels tend to perform better for two main reasons. We are benefiting from an already existing fan base, and we are also driving up the consumption on previous seasons.
As you can see here is an example from our Swedish show, "Love Me." The pink line is showing the viewing on the first season where the blue dotted line crosses, you can see the graph is illustrating when we launch the second season. You can see the rapid increase on consumption on the first season when we launched the second. This is exactly what we want and what we have been planning for, again, a proof that our original strategy is working. Now when we see that our original content really is working, I wanted to share some of the new areas where we are increasing our ambitions and investing even further. Arguably, the most brand-defining area of focus is our Nordic stories for the global audiences.
Operating in such competitive markets as we are, it is important to ask yourself the question, what is our right to play? When we did that, we figured out relatively early that Nordic stories and Nordic storytelling is what we should be focusing on. There are so many relevant and inspiring stories from our region that will also gain interest from global audiences. I'll give a few examples here. This spring, we announced that we are going to produce two international movies per year originating from the Nordics. First one out is the movie about the Swedish artist Hilma af Klint, that is created and directed by the double Oscar nominee Lasse Hallström. Will for sure drive international attention.
Only a couple of weeks ago, we also announced that we are working on a two-season live action series about one of Astrid Lindgren's most loved characters, "Ronja, the Robber's Daughter." This again, is a very high-profile production created by Hans Rosenfeldt, who also created "The Bridge." This will have global relevance. Documentaries is also going to be a very important part of our Nordic storytelling. Here, just as an example, we are working on a very interesting documentary about the Swedish Academy and the Nobel Prize. It's called "The Prize of Silence," and it's premiering in all our markets later this fall. Last but definitely not least, we will also be doing reportage shows about well-known Nordic people. First one out here is no one less than the very famous Danish tennis player Caroline Wozniacki, and this fantastic show will premiere in all of our markets next year.
As you can see, all of these shows are very different, and they are ranging from different genres. They have one thing in common. They will not only be relevant for our Nordic markets, but also be brand building for all of our international markets and drive attention from global audiences. Besides our large Nordic brand-building shows, we are also ramping up our investments into international Viaplay Originals. Here we are teaming up with some of the world's best talents to produce the global hits for tomorrow. This can also be done in a number of different ways. It can be an English language show that we're funding ourselves, like the upcoming thriller, "The Box", that is created by Adi Hasak, who previously created "Shades of Blue" for NBC in the U.S.
This show is starring Anna Friel and Peter Stormare will premiere in all of our markets later this year. A good example of this is the story we're working on about Billy the Kid. This show we are co-producing together with MGM, and the creator of this show is actually Michael Hirst, who previously created "Vikings". We definitely think that this show is going to drive global attention and be brand building in all of our markets. Documentaries is also going to be an important part of our international shows, and here we want to make sure that we secure the most interesting global stories for our audiences in the Nordics and beyond. An example of that is the show that we premiered earlier this year about Ghislaine Maxwell.
In addition to our Viaplay Originals, we are also producing more than 40 Viaplay Productions this year. Our definition of a Viaplay Production is a show that is unscripted. This is an area where we are clearly differentiating ourselves from global competition. Even though some of our competitors are just starting to enter this field, here we are well ahead of the curve. We've been producing these type of shows for more than 30 years. We know that they're working, and more importantly, we know what's working. The main strength of these shows is really their local angle. We have local talents, it drives local engagement, and builds strong brand awareness. The locality of these shows is also one of the main reasons to why we have decided to also produce Viaplay Productions in our new markets.
Moving over to our new markets, we are of course extremely excited to start to produce original shows also in the new markets. The plan is to have a mix of our own Viaplay Originals, both scripted and documentaries, as well as Viaplay productions. We are already in early productions of our first original in the Baltics, currently shooting in Estonia. We have premiered our first Viaplay production in Poland, "Fort Boyard," and we are working on three scripted shows in development. In the Netherlands, we are going through pitches and making our selections now, and we are very excited about what the market has to offer. The ambition for these markets is to ramp up the number of shows to at least five shows per market and year, starting from around 2023, as I mentioned earlier.
Combining our Viaplay Originals with our Viaplay productions, it is clear that no one is producing more content than us in the Nordics. As exciting as that is, that also comes with a large responsibility. Responsible production is something that we've always taken very seriously. Our values and what we stand for is reflected in our content and in how we produce our content. We work hard to promote diversity and EDI, and we have been successful in developing new talent, both in front of and behind the camera. The truth is that some of our most successful shows are actually created by new talents. There is no better way of getting the passion that can really make a difference to a show than by working with new talents.
We have some very recent success stories of this with "Thunder in My Heart" that we premiered in Sweden this spring, and "Pørni" premiered in Norway this spring, both created by new female creators. We want to be the home for everyone who has a unique story to tell, no matter who they are. To sum up where we are going, we are Nordic at heart and global in mind. This strategy shines through all of the content investments that we make and all of the stories that we tell. We are very innovative when it comes to partnerships, and you should expect to see more in this field in the future. Our main priority is our own produced content. Now when we see how extremely well it’s working, we are increasing our ambitions and going into new categories, which is of course hugely exciting.
This combination of an innovative mindset and a Nordic focus is what makes us who we are. This is what's made us successful in the Nordics. It is also what is going to make us successful in our new markets and enable us to tell our unique stories to the world.
Thank you, Filippa. Please take a seat with Matthew and Kim for the upcoming Q&A session. There's of course another crucial part of Viaplay's content offer that Filippa did not cover, sports. We show more than 50,000 hours of live sports every year, and that's quite something to deliver on a streaming platform. Here to talk us through Viaplay's world of sports is our Chief Sports Officer, Peter Nørrelund.
Thank you very much, Mia. I will start with the acquisitions done since last Capital Markets Day. We have done approximately 75 sports rights deals. 25 of them is behind me now. I will dive into a couple of those. Anders shortly mentioned women's football. We have acquired World Cup 2023 in Denmark, Norway, Sweden and Poland. We have acquired the national women's leagues of Italy, Spain, Germany and U.K. We see a huge potential in women's football, and so do FIFA, actually. FIFA is going to spend more than $1 billion into women's football over the next four years. We have seen Women's Super League doing deals with Sky and BBC in U.K., this will be a huge area for us going forward, I'm sure of that.
The next dive is into our historic Bundesliga agreement, which we announced in April and May. Two cycles, 2021 to 2028 in 10 countries. We were pushing for a long deal. It is the first time ever that Bundesliga have done a two-cycle deal domestically nor internationally. Why are we doing that? We have had a tough upbringing when it comes to acquisition of sports. Nordics has been the toughest market in Europe in terms of competition around sports rights. We have had strong public service players. We have had other strong local players. We have had telcos. We have had foreign companies. We have had pan broadcasters. We know the value of long contracts if it is the right content, and Bundesliga is the right content.
It is a neighboring league, and if you look at the macroeconomics in football as of today, Bundesliga is in a very strong position. Strong financials in the clubs. We have seen that the Southern European leagues are drifting away, is having challenges that we don't foresee with the Bundesliga. An eight -year acquisition of Bundesliga, hugely important. The last thing I will mention is probably the deal I'm proudest of. That is Formula 1 in Netherlands. Formula 1 is the biggest sport in Netherlands. Netherlands is delivering the biggest sponsor to Formula 1, and Netherlands have probably the most talented driver since Ayrton Senna. Sorry to the Schumacher and Hamilton fans, Max Verstappen is a future world champion. We actually succeeded in acquiring Formula 1 rights in this country without even having launched.
That's a testament to NENT's expertise, to NENT's experience, and to 20 years' relationship with Formula 1. Super important. If we look at the Nordic sports portfolio we have, I would say it is about long-term agreements with the important IPs. We have Premier League until 2028. We have Bundesliga until 2029. We have NHL until 2025. We have World Championships Ice Hockey until 2030. We have some very interesting upcoming rights. Anders mentioned FIS skiing starting in November, huge property in Norway, Sweden, and Finland. We have Premier League in Norway. We are very well set. We are also then in Iceland now. We are having Champions League, Bundesliga, Formula 1, and in 2022, we will also have the Iceland national team. Actually, the national team in Europe with the highest share of viewing.
We move on and look at how is the Sports performing. I have taken three of our big premium international rights, and we can see good increases. Formula 1, 70% up over the last three years, Bundesliga 51%, and Premier League 42%. Wise to do long-term investment with these IP owners. Next year, we will of course see a dramatic increase here when we add Premier League in Norway and Formula 1 in Finland. Speak a little bit about portfolio building and how to do a Sports portfolio. That is very much about timing because these properties are popular, so they are not just available at any time. We need to find out when are they available, and then it is also crucial when are they tendered, when are they for sale, and how is it in combination.
We are thinking years ahead when we are planning the portfolio. That is the timing issue. On the content, a recipe to success is to have football. Football is the biggest sport globally. It's seasonal, week in, week out, very good for subscription. In every European country, you can build a subscription sports business with the right football. We have Premier League until 2028 and Bundesliga until 2029. We also see motorsport in general and Formula 1 as the pinnacle to be quite important for sports subscription business. It's a bit different viewers, subscribers than the football. Formula 1 attracts more, also very important to have. We are having what I call local specialist. That is sports, which is perhaps not so big on a global basis, but popular in the countries we are in. That could be winter sports in Nordics, handball in Norway.
For the international expansion, of course, we have used the same recipe, the same principle applies. As you can see, we have secured the football we need in all our expansion markets. We have Formula 1, and then we need to work on the local specialist sports. There in Netherlands, we have darts, which is huge. The guy on the picture, Michael van Gerwen, won as late as Saturday, a tournament in darts. He's number one in the world. In the Baltic countries, we have NHL, huge in Latvia. We have acquired local national team football until 2028 as a local specialty in these countries. For Poland, we announced a week ago NHL, which is also a very solid sport in that country. How can we do this?
How can we, without even having launched in countries, end up with some of the best sports rights in those countries? That comes through long-term, multi-territorial partnerships we have had. We were the first one in Europe to do a six-year deal with Premier League in Nordics. We did, as I spoke about, the first Bundesliga deal for eight years. That we've done in 10 markets. We have Formula 1 in 10 markets. We have NHL in 10 markets, and we have UEFA deals in 10 markets. On top of this, our relationships with these IP owners goes 25 years back, so they know what they're getting when they're doing deals with NENT, and that is crucial. Production of sports. There we have 30 years experience since we in 1989 started with the world championships in ice hockey on TV3 in Sweden.
That is, of course, very important when we are launching in a country like we did in Poland in August, that we are able to deliver first-class coverage of the sports, which is attracting so many subscribers. That we do with a mix of strong local talent supported by people from the Nordic countries. That is one thing with the production, that we have a knowledge we can share when we expand into new markets. Another thing are the synergies we can get by having sports in multiple markets. I have made an example with Formula 1. Formula 1, quite easy understandable sport, even though it's super complicated. 10 teams, 20 drivers, 23 circuits. A sport which has a common language, English. What we are going to do is we will have studios, local studios, in all our countries where we are broadcasting Formula 1.
At the tracks, example here being Monza, we will have a studio in the paddock, we will have a grid reporter, and we will have local commentators. That means that we can deliver lots of live content from the race to all our markets. Things which would have been impossible, if we were only broadcasting in one country. Reason for us being able to have a studio in the paddock and be on the grid is that we now are the second biggest partner to Formula 1 after Sky. That gives some preferences when asking for space in a narrow paddock.
Normally, when we talk about sports production, then we are talking about how to conduct the live broadcast, how to create a pre-match program, pre-race program, where we give insights which create knowledge, which creates further interest for the products, or we are talking about how do we analyze a sports event afterwards. Recent years have shown that there's also a huge market and demand for sports originals. Some of our colleagues have done a tremendous job, "Drive to Survive," "Sunderland 'Til I Die." We are coming with a sports original series in 2023 about the Swedish ice hockey legend, Börje Salming. This is an area we will investigate further going forward. We have the production capabilities. We have the storytelling capabilities. We have the relationships with the IP owners, so there's more to come. Takeaways.
What should you think of when you hit the pillow tonight from this presentation? We have an unmatched portfolio in the Nordics with long-term contracts. We have already now key rights secured in international markets. We have long-term, multi-territorial relationships with IP owners, giving us every opportunity to get the rights we want in any given country on the planet. We have the production expertise so we can ramp up, be able to do productions first class, and we can create synergies with the sports rights we have in multiple territories. Thank you.
Thank you very much, Peter, and please come over here and join me in the Q&A corner for the session that will take place shortly. It's quite clear that we've really upped the game over the last few years when it comes to the sports rights. Buying many different assets from many different markets over many different years, and that's very exciting to see. It's also been remarkable of late to see fans back in the stadiums again, which has been wonderful to see across a number of different sports, and we're looking forward to even more of that in the coming weeks and months. We're going to have a Q&A session at the end of these deep dives, so I would remind you again, please, to use the button at the bottom left of your screen. Fill in your name, ask the questions.
We had many in the last session, hope to have even more this time. Then I will address them to the presenters. Before we get to that, long before Peter or anyone else's head hits the pillow, we are going to have our final deep dive, which is a really exciting area for us. It's all about how we differentiate what we do, how we attract customers, and how we keep them. To present this will be our host for today, Mia. Welcome back on stage, Mia.
Thank you, Matthew. Yes. I'm switching gears a little bit here, and now I'm going to talk about marketing. I'm going to talk about Nordic growth and our international approach. To understand how we work and how we see the future, it's important to understand who we are and where we come from. Anders has mentioned this a little bit today, this really lays the foundation for how we approach the international and the Nordic growth. The Nordics is a fairly cluttered market, we have always had a cross-country footprint. When sitting outside the Nordics, I think it's easy and fairly common to think that all these countries are pretty much all the same. I can vouch for that they're not. There are quite substantial differences in terms of culture, media consumption, and creative preference.
We have always had a central strategy and local marketing and communications executions. I believe that this is one of the things that sets us apart from the global giants. If you know us, you know that we're a hungry player. We have that challenger DNA running through our veins, and that comes both from our heritage, but also our people who thrive on pushing the boundaries. We have never had the biggest marketing budget nor the big global brand to fall back on. We have had to be hungry and be smart and find new ways to take ground. The combination of these things is what makes us dare to stand out, push the boundaries, and be a whole lot more creative than some of our global competition. Let's start with the Nordics.
We have talked about this a little bit earlier today, how we're going to grow from 3 to 6 million. From a marketing perspective, this is all about broadening our target audience. We have a strong established brand awareness today in the Nordics, and we're a clear number two. Our core target audience is families 20 to 49. As streaming is maturing, we see real potential into adding more segments. The segments we're going after are single households, silver surfers, as well as seniors. That sounds great, but how are we going to do this? First up, sports. Sports hold the lowest SAC with Viaplay, and it's my job to ensure that we draw and attract these older segments when we have winter sports in Norway, Sweden and Finland.
We have also mentioned today that we have big major sports rights coming in with Premier League and Formula 1. We know that these have very big loyal fan bases, but we are going for more, and all these sports rights sit very well with our extended target audience. When we're looking at attracting the single households, we've already had great success this year with content like "A Class Apart," "Thunder in My Heart," "Two Sisters," and "Threesome." We're well on our way. Last, but certainly not least, partners. Kim has talked about this today. What partners really do is give us direct access to these extended target audience for us to really show them that we have the best product out there. Let's talk about international. We are not a global giant, and we are not a local only player. We offer something different and new.
Therefore, our marketing and communication also have to be something different and new. Whether broad or specialized market entry approach, teaming up with the right player allows us to join the reach or segmentation needed in order to build a successful business. Let's start with specialized markets. We have announced five today. For these markets, the key metric will be targeted marketing. We need to segment and target our potential new customers in markets which are often very large. For example, if we look at our target audience in the U.S., we know that they're liberal and well-educated. They're urban-centered, where L.A. and N.Y. stand out. They're mainly males, 25 to 56. We also see a secondary demographic in women in their mid-40s with a drama interest.
A good measure of success for these markets is, unless you're in the direct target audience, you shouldn't see too much of us. We should, of course, and will, of course, always deliver on the business plans. We have the U.S. coming up first, for me personally, who's worked in this industry in the U.S. for 14 years, this is, of course, something I'm very excited about. Let's move on to our broad markets. When looking at our broad markets, reach and impact are key. We go for an impactful launch, both direct to consumer as well as together with partners. I think for Poland, we have managed to do exactly that. Our extensive research for markets like Poland, of course, include mapping of our competition. We look at what's their media spend, their media mix, and also what does their marketing look like.
One thing that really stood out when we looked at Poland was that all of our competition really focused on content campaigns. That means the content they carry with their brand as a sender. We knew we had to stand out. We worked with a local ad agency to develop our concept. We took the consumer's approach. We might not be Polish, but we know the streaming audience, and we combine this with local insight to build recognition. Our campaign was based around locally sourced and vetted truths. For example, for parents with young children, it sounded like, "My life is like a fairy tale," repeating over and over and over and over again. We also dared to play with stereotypes, referring to our Originals being just as good as those meatballs from a very well-known Swedish furniture chain.
Our aim was to get people to chuckle while really explaining how broad our offer was. We just got the initial campaign results back, and I am happy to say that we have the highest sender recall from all of our competition in the Baltics, and this is after our first campaign. Creative is one thing, but reach and impact are our key metrics. When buying media in Poland, we had one very clear goal. Nobody should be able to miss that we had arrived. We bought TV for reach, out of home for impact, and of course, a very strong and comprehensive digital campaign, both above and below the line. We were everywhere. Our PR was comprehensive, and through press releases, events, influencers, and native advertising, we managed to dominate the media. What are our key takeaways for marketing? We have a unique proposition.
We are broadening our target audience in the Nordics. We are tactical, tailored, and targeted, and we are partnering up to achieve impact.
Thank you, Mia. Please do come over and join us in the Q&A stage, please now. Just a reminder to you again, please do use the button at the bottom left of your screen to register for questions. Remember to put your name there and any questions you have, and I will then address those to the presenters. It's quite clear from Mia's presentation that the impact that we're having in these new markets is already quite substantial, and that we're doing that in a variety of different ways that's really creating meaningful and sustainable impact for Viaplay and the content that we are putting onto the service. Welcome. What a panel. All my favorite people. So great to have you all here.
We have got a lot of questions for you, but I can't really help myself but to ask the first question to you, Kim, which is Comcast. Tell us a bit more about that. That's the big deal.
That's great news for us, and for them as well, I hope. Being able to be on a platform which reaches 30 million+ households in that market is, of course, a fantastic opportunity for us. If I could, I would be happy to share numbers with you, but I can't, unfortunately.
Okay, that won't be the last partnership we do in the U.S., I take it.
I hope not.
Okay, good. Great. All right, then, moving on, I think Filippa, if we could move to you then. A great presentation, a lot of things to talk about there. I think one question that we've had from a number of people is when we look at the ambition for the Originals, how many of those are going to come from the new markets, both in the short term and then in the longer term?
Yeah, it's a very good question, and an exciting one. I think when we state the ambition for next year with 60 Viaplay Originals, that is primarily from our Nordic markets and international productions. It is from 2023, where you should really see the increase from our new markets. When it comes to scripted productions, we will do a few next year as well, but from 2023 onwards, you can expect at least five local productions per market in the broad markets such as Netherlands and Poland.
Okay, great. Thank you. One for you, Peter. Men's and women's football. Can you just tell us a little bit, the audiences for the two, how that's developing? Obviously we're investing in both of those areas substantially. How do you see the profile of those sports developing?
Of course, we have much more viewers to the men's football, but the development of women's football will be much, much greater than we have seen with the men's football. We can actually go back to 1993, when Premier League was established, made their first really commercial deal with Sky. That is 30 years ago. Imagine the media world at that time. Now we have this season, Sky and BBC doing a deal with Women's Super League, it won't take them 30 years with the media picture we have today, because they will push the content. We have international broadcasters who will broadcast from day one. We will see a very, very rapid development in women's football, also because of the SEK 1 billion that FIFA is going to inject into this. Super interesting and nice to have those rights.
Great. I think we saw last weekend with the darts final that it's not just football where we're seeing.
No, that's right.
participation growing very quickly.
That's right. Fallon Sherrock was in the final in the Nordic Darts Masters, actually organized by Viaplay in Copenhagen. She lost to Michael van Gerwen, a very good Dutch dart player.
Okay. Moving to you, Mia. I think when we look at what you talked about in the Nordic markets in particular, you can see that there is clearly segments of the population that are not as conversant yet with streaming and are moving into that space. When you think about the effects of the pandemic, how much do you feel that's accelerated that shift in people who wouldn't necessarily normally have been streaming to actually suddenly start doing that?
I would say a lot. I think that the pandemic as a whole has really fast-forwarded us quite substantially, and I think that this new target audience, a little bit older, are definitely more curious, and starting to really use streaming. It's time. It's time for us to really see them as our core as well and really reach out to them. Of course, we'll do that in some different ways, but we definitely have all the tools in our toolbox to do so.
Great. Thank you. We've got many questions coming in now, so thank you everyone for those, and keep them coming. I think the next one will go to you, Kim. When we're thinking about Poland now, are we done on the distribution deals, or could there be more to come? Is that a model for what we're going to see for the Netherlands next year as well?
On Poland, I don't rule it out to have more participation in that market. It's not necessary to us. We are very happy with the partners we have found so far, the two cable TV operators, UPC and Vectra, and also the last agreement we have with Play. I don't rule it out. I don't rule it out at all.
Okay. Yes, because one of our investors has made some suggestions for you.
Yeah.
KPN, Vodafone, T-Mobile, Polsat, Orange, Canal+, quite a few there to be talking to.
Yeah. Quite a few interesting, and they all are very excited about our offering and we will definitely have dialogues.
Okay. The Netherlands, a good model for what we should expect there, do you think, or when you look at the experience in Poland?
I think so. We have learned a lot in Poland. We have learned a lot in the Nordics. In one way you can say that it is appealing to launch with a direct-to-consumer product only because we know there's a huge interest in the sports rights we bring to the market.
To build a long-term plan and a sustainable model, it's very interesting to speak to these partners, and thanks for bringing the names.
Okay. I'm sure they're well known to you.
They are.
Okay. Filippa, moving to you. The question has come, when you look at the cost of originals, and we look at that per episode or per series, what sort of range should people be thinking about here in terms of how you are investing? Per series, say.
We look at it mostly per episode since it's, of course, very different, depending on if it's two or eight or 10 episodes. To give you just one kind of guiding principle for how much they can cost, it's really hard. Documentaries tend to be cheaper. If you look at the scripted shows, they start maybe the full production around maybe SEK 15 million upwards. What's important to say, it's not necessarily that the more expensive shows are the better ones. It is very dependent on the show and the story that we want to tell. For obvious reasons, period is very expensive. Crime is also more expensive than drama. There are many factors that you need to think about when you look at the cost for the originals.
It's really hard to say an average range or this is what a good show should cost. We've also seen that some of our most successful shows that we've produced completely on our own are actually at very reasonable prices. Doesn't mean that we are not doing the very big shows as well. I think the beauty of our offering, also with producing 60 Viaplay Originals next year, is that we need to be able to do it all. From the very efficient drama productions that we sometimes also shoot back-to-back several seasons to the real big tentpoles that can be period, that can have the biggest actors, that can include all the extras. We need to be able to have the full breadth, and that is what makes it unique, I think.
Okay. For the international shows.
Yeah.
The bigger productions you've talked about, would one assume there that the cost is shared more with other people and therefore your percentage take of that is somewhat lower?
For sure. For the vast majority of our Nordic shows, we sort of pay the majority of the bill. For the international shows, we also do some international shows that we also fund completely on our own. I mentioned "The Box" in my presentation, also our English/Swedish production, "Threesome," that we recently premiered we are completely funding on our own. We do also the international shows on our own, the very big ones, like I mentioned "Billy the Kid" in my presentation, we have another very big production coming up, it is called "The Swarm." For those big productions, we cooperate with large other international players so that we can share the cost. Our proportion of the total production budget will then be reflecting the rights that we secure.
Great. Very clear. Thank you. Peter.
Pleasure.
You've been in this business for a long time, and suddenly you wake up one morning and start doing six and eight-year deals.
Yeah.
What changed? More importantly, why is it that the rights holders are now entertaining doing deals like that?
We have pushed a lot for that, and we have pushed for that for the last many years. Because as I touched upon on stage, we come from a very competitive market, and we know the better we do it, the higher the rental will be next time. That is the thing with sports rights. To be able to get long-term rights with the right content is, for me, key. We have, if we are talking about our expansion markets, Poland and Netherlands, it is fair to say that they have not been subject for the same competition that we have seen in Nordics. Actually, we have had very affordable entry levels, also making it a really good idea to do long-term deals.
Okay. Because that's an interesting point, because I've also got that question here. Is it the case that you've always paid the most to get these deals? I hear from that the answer to that is no.
No. I think actually, I can say that in this cozy environment, I think if it had been only three-year deals for Premier League, then we would probably have lost.
Okay.
A couple of places.
Great. Just amongst us friends.
Yeah.
With other people watching.
Oh.
Okay. Great. Thank you. Then I think, Mia, when we think about the development overall, clearly the way you approach marketing in the Nordics and internationally, as you mentioned, is different.
Yep.
The cross-promotional element that we have available to us in the Nordics, how much do we miss that in the international markets, and how much does that change the way we think about things?
Of course, we miss something that's something that we love in the Nordics. I would have loved to have a big cross-promotional window in these markets, I think we're totally fine without it, I think that because it also comes with a price. It comes with a price that Viaplay is very much attached to our own old channels in the Nordics, et cetera. I think that as long as we have the budgets we need, which we do, we're fine. I would actually say that the only thing that looks a little bit different is when you look at our media mix, yes, there's a little bit more if you look at the full investment level going to TV in the Nordics because we have cross-promo. No, I think it's actually totally fine.
Okay. Great. A question which I think, Filippa, you really dealt with very well in your presentation, but I want to bring it back again because it's coming through here loud and clear, which is when you look forward to now the Hollywood relationship, how do you see that playing out now? It's quite clear the content investment now is being weighted towards the originals. How do you see the relationship with Hollywood, and I suppose the broader independent sector, developing over the coming years?
Yeah. I think just first one remark there is just I don't think it's fair to say that our investments are shifting towards originals. We are still investing in acquired content, but we are increasing a lot more on the original side. That's where the increase is coming from. Of course, we are acquiring more because we are entering new markets. That also makes us a more interesting partner. Today, we have as much content from Hollywood as we had two years ago, but as I mentioned in my presentation, the number of partners has significantly increased, and we are also more and more looking at new partners to work with, not necessarily just from the U.S. As I also mentioned, it is opening up new opportunities to work also with the U.S. players.
The deal we have with Starzplay is again, a good example of strong content that we are going to be able to offer to all of our Viaplay customers ingested on Viaplay. It is changing a bit, but it's still a lot of very strong acquired content.
Great. Some new names and faces, but the same amount overall.
Yes.
Yeah. Okay. Kim, the length of these contracts, the distribution contracts, the B2B deals that are being done, what are we talking about here? Three to five-year deals? More or less? What do they look like?
Three to five-year deals, yeah, it's quite common. I think it's very rare you see shorter duration of these types of deals, one to two year. It's not in our interest, it's definitely not in the interest of the partners. The point is that it takes quite a lot to invest in these types of partnership to get to understand each other, to build a strong business together. Quite often, threes or so. You have to believe in it, like in a marriage, maybe with less emotions. Not always.
What a great analogy. Good. Okay. I think then, Peter, if we could just dwell a little bit on the sports rights center themselves. We know that with F1, for instance, they have an OTT offering that they've gone direct with. How do you see that? Is this a competitor situation or is it an opportunity for us or how should we think about that?
I would see that an opportunity, a complement. I think if we go four years back when Formula 1 was acquired, then I think there was an idea for Liberty that they could do this huge direct-to-consumer thing and the broadcast partners were not so important because they wanted to go direct to the consumer. They have found out that there are better models, and that's the one they're exploiting now in full. It's definitely not a competitor to our coverage of Formula 1. It's a great supplement for some of the hardcore fans.
Okay. I suppose we can't really leave this conversation without discussing the arrival of the new potential league that came and went very quickly, the European Super League. What are your reflections on that? What should we take away from what happened with the clubs, with the fans, the supporters, the organizations themselves, and how should we think about that?
First of all, and that is easy to say today, I was not surprised at all that it only lived for 48 hours because from a sporting perspective, the European system is based on relegation, promotion, winners, losers, that there is a connection between the football people like you and I play and the very best in the cup tournament there is from the field to the big stadium. There is a storyline that you can't change. That is the whole dynamics of European sports culture that they try to change. We also saw, and I think commercialization on sports and monetization is super important and very good, but it can also have a little bit of an ugly face. That was what we saw there.
I think that the leagues and the football system is in a much better position now than they were before this attempt to make a European Super League. I was happy to see that Bundesliga didn't have any clubs participating in that, and the U.K. clubs were quickly out of it again.
Okay, thank you. I love the thought that you think there is some connection between the football you and I play and what happens in club football.
There's a storyline. It is thin, but there is a storyline, yeah.
Okay. Filippa, coming back to you, question here. Of the 135 plus originals you have launched in the last seven years, for how many of those do you own the international rights? How will you think about that moving forward as you launch new originals?
Yeah. Good question. One question that I have been focusing on a lot over the last years. When we started producing originals, we were very focused on the Nordics. For some of the old shows, we only secured Nordic rights, and that was our focus then. Actually good for us now when we are expanding into new markets. A lot of our good shows sold internationally and have been available in some of our markets, which gives us good brand awareness and ability to further work on the Nordic storytelling. When it comes to the new shows, we are securing pretty much global rights for all of the Nordic shows that we produce. When it comes to the international shows, it is like we discussed before.
Some of them we will do on our own, and others we will just be part of Our broad markets, if that makes sense. We differentiate between the markets where we're going in with the focus on the Nordics and the broad markets, where we have pretty much the same offering as we have in the Nordics, like Baltics, Poland, and the Netherlands. For the future, it's definitely the majority of the shows, and also for the historic ones, we have been going back, renegotiated, and been able to secure a lot of rights for our priority shows also for the very early ones.
Okay, thank you. Peter, another one for you, which I already know the answer to, but we'll bring it to you anyway. How much more are you paying for sports rights like Formula 1, Premier League, and Bundesliga in Holland and Poland versus the incumbents? How can you be confident you aren't overpaying?
As you know, Matthew, you are setting the rules. We are not commenting on prices in that respect. I want to touch a little bit on value, though, because what is the value? Is the value what a market specifically finds a value of a property, or is the value what can actually be attracted out of that property? It's not. I know for some of our rights we have bought that other players in the market have tried to buy them for higher amounts after we acquired. I said a little bit anyway.
Yeah, no.
Is that okay?
It's your answer.
Yeah.
I sound like I'm saying.
You said you could answer it yourself. I was wondering why you were putting the question anyway.
Well, I'm not taking credit for these questions. They're coming from our audience.
Okay.
Just to keep on running through these then. Another one for Filippa. How many local languages shows do you plan in Poland and the Netherlands next year, which we dealt with to some extent. When you think about the mix between scripted and non-scripted documentaries and the other types, does that change depending on which market you're in or is the mix going to be pretty much constant?
It is relatively constant. We have said for both the Netherlands and Poland that we want to make at least two scripted shows per year from 2023. You can play with the rest. We said at least five, so it is most likely going to be two unscripted and one to two documentaries. Of course, that will slightly depend on ideas. We have guidelines, but if the perfect story comes in, we will of course, be flexible. Those are the rough guidelines around the five.
Great. Well, I think that's a great way to finish, looking for the perfect storytelling. Thank you all very much. Great answers to other people's questions, Peter.
Yep.
Thank you very much. We're now going to take the second of our breaks. Only five minutes, I'm afraid, and we're looking forward to welcoming you back for the last session of the day. As usual, we have saved the best for last. Please take your time now, and we'll see you back very soon.
[Presentation]
Welcome back, everyone. It's time to move into our final session of today. Anders will join us once more to present the news from this morning, the next five markets for Viaplay. This is going to be exciting. Welcome back, Anders.
Thank you very much, Mia . I think a lot of what I'm going to talk about now, you've heard throughout the day. I would like to wrap it up for you to make sure that you have everything in summary and in perspective, what does this next chapter of our international expansion actually mean? Well, first and foremost, it is a matter of execution. We want to develop ourselves to become the international streaming challenger, we've made some really good and strong mileage already. Now we are very focused in how we want to move forward. There are, as always, some nuances around this. To address this in a little bit more color, I would like to share some perspectives with you for this final bit of our journey today.
From where we stand today, we are launching seven new markets before the end of 2023. We are launching the U.S. as the next stop, mid-December this year. We're launching with partners as you have heard from Kim earlier. We can mention already now a fantastic cooperation with Comcast, where we will be reaching into at least 30 million households with our content and see how we can get them excited about Viaplay. In the first quarter of next year, we're launching in the Netherlands with a broad proposition. I'll come back to the difference again between a broad and specialized proposition. In the Netherlands, we have decided to invest in a top position when it comes to market share and streaming in that country.
We're not there yet, where we want to share the exact price point and the exact launch date for competitive reasons, but I'm pretty sure that we will, you know, bring something new, exciting, affordable for the Dutch audience. Next year, next stop is the U.K., second half of 2022. The smallest common denominator when I discuss or describe the markets in this way, is that when we say next stop, it is, in this case, also a direct-to-consumer offering. U.K., we will go maybe with partners, but definitely direct to consumer in the second half of next year. Germany, Austria, Switzerland and Canada will follow in 2023. Without saying too much about timing, I can say that it's not gonna be the latter part of 2023.
There are rooms for movement in this. There are different ways of going to market, as you heard from the team earlier. We're looking at all those options. How can we maximize our unique offering at the time of launch? How can we quickly establish category leadership, whether it's broad or specialized? How do we make sure that we stay disciplined and sustainable in our investments so we can take gradual step to achieve more growth? The two models, and again, to explain those, the broad model is what you have seen us doing in the Nordics for quite some time now. A very broad offering of acquired content, well-known franchises, combined with a fast-growing Viaplay Originals slate and usually a lot of sports. The specialized markets are more niched in character. They are centered around our Nordic storytelling.
Again, you also heard Filippa talk about it earlier, Nordic storytelling doesn't necessarily mean Nordic language. It means building on who we are, where we come from, how we share perspectives in our stories, in our views, in our dialogue, everything that we do. Nordic storytelling is a phenomenon, and we want to be the best in the world at it, simple as that. Currently, we categorize the U.S., Canada, U.K., Germany, Switzerland, and Austria as specialized markets. The benefit of our model is that we can scale up and scale down as we see fit. If a market doesn't work where we have decided to do a broad investment, we can, of course, decide to cut our losses and scale down and go for the specialized model. In the specialized countries, we definitely have ambition to grow with the relevance of our proposition in that market.
Fair to say that sports in North America, U.S. and Canada, is not in scope. It is very different, and you have heard Peter talking extensively about playing on our strengths when it comes to sports in Europe, and that's where we're going to stay to play. We have ambitions for sports in these new markets as well. It's a question of timing, it's a question of availability, and it's a question of capital allocation. Our success factors can be quite easily summarized. Bringing the best of Nordic storytelling, we've talked extensively about that. There are clear synergies with our Nordic business. Investing in an original for the Nordics and then increasing markets means that the cost doesn't increase at the same pace as the number of markets.
If we just make sure that we pick and choose the new markets carefully, think about how we allocate the investments, the synergies, and the operational leverage in those productions, that is significant and something to keep in the back of your heads. We are, as you heard, believers in powerful local partnerships, whether it's distributors, broadcasters, content developers, there are very many ways to create value for multiple parties. As long as it fits in our model, we are eager to discuss with everybody who has a proposition for something that can create a stronger content proposition for us and for them. As I mentioned, there is the option to add sports and other content categories also in the new markets.
There's a lot to be said about our ambitions for these new five markets, and you should probably expect us staying true to our guns and probably announce new things along the way. We will remain very disciplined. As we've said a number of times, and you will soon hear from Gabriel about the whole financial framework, we are fully funded and we will remain fully funded for whatever you hear us saying about these new markets. Bringing the best of Nordic storytelling means investing in Nordic Viaplay Originals, thinking about third-party Nordic content partnerships with public broadcasters and other content developers, and then, as Filippa also talked about, move into international content partnerships.
Whether that is with somebody like MGM for Billy the Kid or a local broadcaster in one of the new markets, the content quality and relevance for our portfolio will decide whether we go into that or not. The core is who we are and where we come from. Summarizing, H2 2022, U.K., 2023, and not the later parts of 2023, Canada, Germany, Austria, and Switzerland. These new markets have very interesting profiles. One question that we have battled with internally, and there has been questions, why not go for more underdeveloped market when it comes to streaming penetration? One doesn't exclude the other. There is an opportunity to come in and grow and make a market, and there is an opportunity to come in in fairly competitive but highly penetrated markets where we don't have to make the market.
People are more likely to interact with a more niche service, more likely to commit to something that is different from what is currently existing in those markets. If you look at the profiles for the markets that we are presenting today, they're all fairly highly penetrated. There is still growth to continue. There is a reasonable amount of stacking, number of SVOD services per household, and people will be scanning for more opportunities the coming years. That proliferation of services is an opportunity for us coming with a very focused proposition. Scale is important here, and to be a small player in a large market can financially be equally interesting as being a large player in a smaller market.
If you put all of these things together in the model that we have created between countries like Poland, Netherlands, and the new, more specialized markets, the value contribution from a margin perspective is not that dissimilar. It creates multiple pricing opportunities as we go forward. Scale up, scale down, pricing models, package proliferation, all of that are tactical tools that we have in our toolbox, all of them not necessarily already built into the base case that we are presenting today. There is a significant opportunity in broad distribution. I cannot emphasize that enough. Again, you heard us talk about it earlier, Comcast Corporation, what we are doing in Poland and what we will be seeking to do in Netherlands, it is a significant opportunity. 11 international markets by end of 2023. Netherlands and U.K. first up after the U.S.
Six million subscribers by end of 2025, whereof 2.2 is set to come on stream for us during 2022. We have remained firm on our commitment to reach break even and get international EBIT accretive from 2025. With everything we know now that we didn't know at CMD last year, actually allows us to model a margin uplift to 15% already in 2026. This is a growth journey that is disciplined, opportunistic, and very, very, very attractive for everybody who's working with us, because we can scale quickly and create value for a lot of people in the value chain where we will be operating the coming years. Our international expansion is about creating a sustainable future for our company, our employees, and our shareholders. We are, of course, as you hopefully have gathered by now, super excited about all these opportunities.
We are very humble for the challenges that we take on. I rely a lot on the quality of the team that you have seen today. As I mentioned in my opening statement, the race for talent and to develop new perspectives for talent is absolutely essential. I think we are in a really good place. We are very eager to continue our international expansion with the new markets announced today.
Thank you, Anders. Please join Matthew ahead of the final Q&A session. Before we get to that, last but by no means least, we will hear from our Chief Financial Officer, Gabriel Catrina.
Thank you, Mia. Hi, everyone. I am super excited about the opportunity that we have ahead of us, especially when it comes to the expansion for which we have now more visibility, compared to the plans that we presented last year. I will focus my presentation on three things. First, show you how we see our growth and our profitability evolving over time. Second, give you an update on our financial position. Third, provide you with some targets and some guidance, both for the long term, but also for the short term. Let me start with a brief recap of our 2021 performance. We had a very strong Viaplay performance this year, and grew the subscriber base with 21% at the end of Q2, ending with almost 3.3 million subscribers.
We grew across all of the business areas, especially since we still had the impacts of COVID-19 this year. Viaplay was a big driver of the sales growth. If you look at our group sales growth, like for like for our continuing operations, we grew more than 20%, with Viaplay growing almost 24% in H1 and 36% organic growth in Q2, becoming the largest revenue contributor in the group with 35% of revenues, which is a big milestone that we have achieved. Other subscriptions also grew with 30% organic growth in Q2. We also saw a recovery in advertising with 15% growth in H1 and approximately 28% organic growth in Q2. If you look at our profits, they're up more than 65%. That is including SEK 86 million negative impact of our international expansion.
In summary, we had a very strong recovery from the crisis, both in terms of sales and also profitability, despite the additional costs that we had at the beginning of the year due to the international expansion. If you look forward, we are now becoming even more a growth company, and we have raised our growth ambitions for the long term until 2025. You can see in the chart that most of the growth is going to come on 2022 and 2023, and you can see the progression as well in the illustration on the slide. The major driver of the growth will be Viaplay, and this is primarily driven by the subscriber growth, going from the 3.3 million subscribers that we have now to the 12 million by 2025.
Of which SEK 6 million will come from international. Poland and the Netherlands will be the major contributors to that growth. If you look at the Nordics, we expect continued sales growth and now to be on the upper end of the range of approximately 13%-15% growth until 2025. There's three main drivers for this. The first one is the Viaplay sales growth, which we expect to be in the range of 23%-25%, with most of the growth coming in 2022 and 2023. This is driven obviously by the increase in the subscriber base with more household penetration, stacking increasing in the Nordics, but also new households coming into our platform on the back of the sports rights, especially skiing, and the Premier League, and Formula 1, especially now in 2022.
If you look at our other subscriptions, we expect that business to continue to grow at a high single-digit percentage over the forecast period. The third element is advertising, which will be quite stable, but still growing on a low to mid-single digit percentage until 2025. With this trajectory, we expect already 20% growth in the Nordics next year, then a bit lower in 2023, and then lower in 2024 and 2025. We look at international, of course, the growth will be driven by the scale in terms of number of subscribers. Also we expect some ARPU growth towards the end of the period, as we are also planning to increase some prices once we have been established in those markets.
There will be a strong uptick in 2022, especially with the launch of the new markets in the Netherlands and the U.K., and the scale-up on the markets that we have already launched. Especially when it comes to the launch of the sports seasons after the summer, with Premier League specifically. For the Group, including the international expansion, we see now that we're going to be on the upper end of the range of approximately 18%-20% CAGR until 2025. When it comes to our long-term margin opportunity, if we start with the Nordics, we can see that the margin expansion will come partly in the short term, but primarily in the long term, as we are focusing on volume growth as we scale the subscriber base, because we're focusing on the volume to drive more long-term value. There's a few drivers of the Nordic margin.
I talked about the sales growth of Viaplay, both in terms of subs, but also the ARPU. The other subscription revenues will contribute to the profitability, but most importantly, the profitability will be driven by operational leverage, especially when it comes to our content cost, but also when it comes to our tech investments and our G&A costs. As we scale the subscriber further, we will drive operational leverage, and that will impact the margins. The operational leverage on content costs will come primarily in 2023 and 2024. As you've heard, we're doing a lot of investments now in the short term, especially when it comes to the sports rights. Margin will be slightly up this year from the 7.7% that we had last year, stable next year, and then increasing in 2023 and 2024 towards our 15% target in 2025.
That will continue to grow towards our 20% long-term margin ambition. If we switch to international, here we expect a positive EBIT contribution in 2025. We have already seen based on the plans that in 2026 we will be at the 15% margin for this segment. That will continue towards the 25% long-term ambition that we have discussed earlier. We foresee that we will have approximately SEK 3.8 billion of accumulated losses to break even until we reach the positive contribution. The increase versus last year is primarily driven by the additional investments that we're doing in sports, especially in the Netherlands, where we're going for the leadership position with a strong portfolio of assets when it comes to sports. It's also driven by the increased ambition when it comes to the originals productions that Filippa talked about.
The acceleration of the launch in the new markets that Anders just described, and the addition of one more market. We have guided for approximately SEK 500 million of losses this year. We will have approximately SEK 1.5 billion next year. That will be peak losses in 2022, and then gradually going up until 2025, when we get a positive EBIT contribution. If you put these two things together for the Group, that means that margins will come down in the short term, but then will increase towards the end of the period, especially when we get to 2025. Allente, our joint venture with Telenor, is also contributing to our journey, especially when it comes to the short term.
The company is performing well according to plan, has delivered slightly higher sales the last three quarters, with an EBITA margin quite stable of approximately 20%. They're also managing the decline on the satellite subscriber base. They're on track to deliver on the SEK 650 million of cost synergies by next year. They're also focusing on upselling Viaplay to the Canal Digital subscriber base. The migration of the satellite customers is going to be completed this year. It's ramping up. They will be done before the end of the year. The full integration of the JV will be completed next year. The contribution to earnings, as a consequence, this year will be quite limited, as the company has roughly SEK 700 million of integration costs that they're dealing with during 2021.
Going forward, we expect approximately SEK 350 million of associated company contribution already in 2022, and in 2023, and going forwards. For us, what is important is the cash flow generation of Allente and their ability to pay dividends. We will now receive this year SEK 500 million of dividends. That's up from the SEK 400 million that we guided for earlier, and we expect approximately SEK 400 million of dividends to come already in 2022- 2023, and also going forward. As we discussed last year, we are applying a clear capital allocation strategy and investment focus. We are focusing our investments in three areas. It's content, primarily. It's also product and tech, but also distribution. If you look at our content investments, they will increase significantly for the approximately SEK 7.5 billion that we are spending today towards the forecast period.
That is both driven by the Nordic investments, but also when it comes to the international expansions across all categories. Sports, driven by new rights, but also inflation in the Nordics, and then the broad investments that we're making in Poland, in the Netherlands, and in the Baltics. We will increase investments in Originals and also in acquired content. Acquired content still is a key component of our Nordic offering, but also for the international markets. The share of cost of acquired in our total spend will decrease over time. Product and tech spend will increase as well, but we will drive operational leverage as we scale the subscriber base further. We will invest in marketing, as we heard from Mia, and also in B2B distribution, which is a way for us to drive volume growth and capture market share quite rapidly.
The second element is the portfolio and business optimization. We are looking for efficiencies as we scale with the operating model and looking at synergies with the Nordic operations. When it comes to our portfolio, we will continue to review the portfolio, but as you have seen, we have sold now all of our studio businesses, and we have repurposed the few remaining studios that are doing scripted productions exclusively for Viaplay. Now we can focus our attention and our efforts in the Nordics and to drive the expansion. Obviously, as always, we follow a disciplined approach on how and where we allocate our capital. We are increasing our investments in Originals, both in terms of volume, but also in terms of size of the productions. Originals are a key to our differentiation because they drive customer acquisitions into the platform, but also they make our offering unique.
We will do more productions, higher budget productions, like for example, the Ronja, the Robber's Daughter and The Swarm. We will increase the share of our investments as we take on more markets and global rights. As again, as we're doing with the project with Ronja and also The Box. As we expand into more markets, we're able to amortize this cost over a larger customer base, and that improves the return on our investments into these productions. We will also have more ownership and control over our content, but also our destiny, because over time we will become less and less dependent on U.S.-acquired content. We expect to more than double the investments that we're making in original content to up to SEK 2 billion per year by 2025.
Please remember that we amortize these productions over six years, so the impact on the P&L is more gradual. Of course, we have an impact on our working capitals as we need to finance and fund these productions in the short term. All of these investments that we have discussed today, especially when it comes to the content, Viaplay Originals, sports, and the international expansion, have an impact on our working capital. Based on the plans that we have outlined today, we expect a negative contribution of SEK 1.3 billion already this year. That is up from the SEK -850 million that we guided for earlier. The driver of this increase is both the higher ambition when it comes to the original volume and the increase in the level of productions, but especially around as well the new sports rights that we have secured.
The change in working capital will peak next year with a negative impact of SEK 3.2 billion, going down to SEK 1.5 billion in 2023, then with a much lower impact after that as the changes become smaller. Even with all these investments and the increased ambition and now the accelerated plans that we have for expansion, we are fully funded to drive this journey. We can manage this within our current capital structure and our current means, both based on the equity raise that we did in February this year of SEK 4.35 billion, but also the Nordic cash flows, which we expect to increase towards the end of the forecast period.
That will include as well the contribution from the dividends from Allente. We anticipate that the international segment will be profitable in 2025, and then expect that the margins will rise after that, and the profits will rise after that. From a cash flow generation perspective, and as a group, we expect a positive cash flow generation already in 2024. Remember that we ended the Q2 with a positive net cash position of SEK 2.2 billion, with SEK 5.4 billion in cash and equivalents, and a net debt to EBITDA ratio of -1.2 times. We are fully funded for the expansion. Our starting point is from a very strong financial position, and we are putting the money that we have raised to work. If we move to our targets, which Anders presented at the beginning of the session.
We have upgraded across all the targets that I have introduced, and new targets. This is based on the investments that we're making, and then also the higher visibility that we have when it comes to the plans, both for the Nordics, but also especially when it comes to the international expansion. We are convinced about our ability to deliver on these targets based on the track record that we have, the strategy that we are applying, but also the team and our culture. Our targets for the future are, when it comes to the organic growth for the group, approximately 18%-20% CAGR until 2025, and we will be on the upper end of that range. 12 million subs by 2025, of which 6 million will come from international. Again, with a big contribution from Poland and the Netherlands to this growth.
When it comes to the organic sales growth, for the Nordics, we expect that to be on the upper range of approximately 13%-15%. The new target around Viaplay Nordic organic sales growth of approximately 23%-25%, with the majority of the growth coming in 2022 and 2023. When it comes to the margin, as I described earlier, on the Nordics, we will have a trajectory that is nonlinear, with a big increase in 2023- 2024, up to the 15% margin in 2025, and a 20% long-term ambition. International EBIT accretive in 2025, with 15% margin already in 2026, and a 25% long-term ambition. We're not changing our leverage policy. We still expect to be below 2.5 times net debt to EBITDA, including leases.
As we're going into a growth phase, we may go up from time to time, especially now in the short term. Speaking about the short term, looking at the outlook, 2022 will be a year of acceleration, both in terms of subscriber growth, but especially when it comes to organic sales growth. For the group, we expect approximately 28% in 2022, and for Nordics, approximately 20%. The Viaplay subscribers will reach approximately 6.5 million by the end of the year, of which 2.2 million will come from international. It's very important to remember that this growth will be progressive and will come primarily in Q3 and Q4, especially since we have the launch of the sports seasons after summer, both in the Nordics but also in Baltics, Poland, and the Netherlands, especially around Premier League next year.
Nordic EBIT with stable margins next year, rise in profits compared to 2021. Again, peak losses when it comes to international of approximately SEK 1.5 billion next year, peak change in working capital as well next year with SEK -3.2 billion. Summing up, we have a proven scalable business model to drive continuous sales growth and improving earnings in the future. We have a track record of delivering growth and results. We have raised our subscribers sales and margin targets. We are fully funded for the accelerated expansion, starting from a very strong financial position. We have a substantial value creation opportunity and investment proposition for investors. That's it for me. Thank you very much for your attention.
Thank you, Gabriel. Please join Matthew and Anders ahead of the final Q&A session. It's so fantastic to hear about our acceleration of the expansion of Viaplay, and for us to really take advantage of the opportunities we see in front of us. Matthew, over to you.
Thank you very much, Mia . Welcome to the third and final Q&A session of the day. You know the routine by now. If you want to submit a question, bottom left of the screen, submit a question, name and question, please, then I'll present those to the presenters. Welcome, gentlemen. The end of a long afternoon, but a great afternoon. Lots of wonderful storytelling. We do have a lot of questions coming in. I'm going to start by clearing out a few things that just came up in this last presentation, just to ask you a few very direct questions. First of all, is the Allente P&L contribution including or excluding PPA charges?
That is including PPA charges.
Great. Another one, was the SEK 400 million of dividends from Allente in both 2022 and 2023?
It's SEK 400 million per year.
Each year.
Each year.
Exactly. The same question came about the approximately SEK 350 million of associated company income, but again, that's each year.
It is each year, yes.
Yeah, exactly. That's great. While we're on the subject of Allente, the question has come: Does it make sense to hold that stake longer term, or could that be a good way to finance even more growth in Viaplay?
I think short to midterm, it's a good holding for us, for the reasons that we just described. That there is good money coming in. They have to deliver on the agreement that we have to upsell Viaplay and upsell the V channels and to get deeper penetration on basically all of our products, which they're doing in a great way. I think for those reasons, we have no hurry to change our perspective on Allente's future. Of course, as we are evolving and becoming a different kind of company, being a conglomerate of different holdings is, of course, just adding to confusion around our equity story. As we've done with studios, which by definition is something that, well, studios, isn't that great to have because they provide content.
Well, if they sell the majority of the content outside the group and are stuck in long-term contracts and they have fairly low margins, then it's actually not really a good idea, and that's easy to explain. I think we will, at some point, be able to explain why Allente is better off elsewhere as well.
Okay.
Not now.
Okay, thank you, Anders. One again for you, Gabriel. The working capital movements are quite large. Is this one-off and you expect the working capital moves to reverse longer term, or is it a permanent move to a more capital-intensive model?
Yes. Long term, we expect them to reverse. Remember that we are investing a lot in sports and ramping up both in the Nordics. We have launched in Poland, Netherlands. We are launching in the U.K. next year, U.S. It is primarily driven by sports, but also by the Viaplay Originals ambition. We don't expect that to become the norm. Based on the markets that we have announced today, this is how we see the plan.
Absolutely. There's one question just about the raise on the working capital for this year. Is that primarily driven by the sports rights that have come in now, or is it more the originals ambition, or is it, again, a combination of the two?
It's a combination of the two. I would say that the originals has a larger impact than the sports when it comes to the upgrade.
Okay, great. We have questions around the phasing of the international EBIT progression through the 3.8.
Yes.
Just how people should think about when the peak comes and then how that plays out over the four-year period.
I know, as I mentioned in the presentation, we guided for SEK 500 million this year. Next year is approximately SEK 1.5 billion. Following year, one can think that it's probably going to be lower as you saw in the presentation of maybe approximately SEK 1.2 billion [inaudible].
Yes, absolutely.
To get to 25.
Some very helpful line charts.
Very helpful line chart. Although it hurts the chin, yeah.
Okay, great. Another one. Can you elaborate more on the raise of long-term Nordic margin from 15%-20%? Shouldn't that upside potential depend largely on external assumptions like further content deals and consumer trends? Just a question there in terms of h ow that develops from the 15%-20%, what's motivating that, I suppose?
No, I think it's very much residing on the longevity of the contracts that we talked about before and the likeliness of continued working with pricing. Pricing increases proliferation of package structures and the return that you get. The investments are fixed, and we basically have a long list of alternatives to work with those assets to create more value. There is one thing that we really haven't touched upon all that much during the day, and that is cost efficiency in operations.
Since we're moving from a traditional broadcasting model that was quite overhead intense to a platform-based business where all of the investments are moved into the front end, means that some of that efficiency will be reinvested in content and tech, but some of it goes straight to margin.
That is something that we haven't touched that much upon, but that's the beauty of this model that we are gradually migrating to, right?
It's the operational leverage point that I made in my presentation, that as you continue to scale, and then we keep G&A and take investments with a fairly fixed content base, then that should continue to drive the margin up beyond 25%.
Great. Very clear. Thank you. One for you, Anders.
Yep.
How many of the 6 million international Viaplay subscribers in 2025 do you expect will come from broad versus specialized markets?
Well, I think if you look at the ramp-up that we talked about already next year, it is very Poland and the Netherlands driven. They will continue to grow after that, obviously at a slightly lower pace. If you just sum all that up, the majority will come from the broad markets.
Yeah.
If everything sums up. As I mentioned in both in my early and my final remarks, we have the ability to scale up also in what is today a specialized market, and it can become broad or semi-broad, depending on the opportunity. These are large markets, where a small share can equal a large share in Poland. It's more a matter of the value contribution that they bring to the ecosystem that we're building. For pure numbers terms right now, it is broad market driven to the greater extent.
Great. Thank you. Then a question coming from both Tom at Citi, but also from Nicolo, our master's graduate.
Yeah. Great.
Is, why don't you rebrand NENT as Viaplay? Keep it simple.
The whole group?
The whole group.
Well, of course, that's a good question, and it would be easier if our share was called Viaplay, given what we're presenting today, and the group was called Viaplay. Of course, that may be something to consider in the future. We're also mindful about the fact that not all of our business is Viaplay. Once we do it, we want to put it in the right kind of perspective. Saying that we're Nordic now is actually a good thing. Over time, let's put it like this. It's a good suggestion.
Okay, great. I suppose along the same theme, we've also been asked the question, because people know that we discussed it last year at the Capital Markets Day, would we ever consider, given our peer group, looking at other stock exchanges to be listed on? Is that passed now and we're where we are?
Well, I think we were quite elaborate on the reasons for why that was considered in terms of increasing liquidity, attracting a more international shareholding, and getting the right kind of peer groups. We have achieved a lot of that. There are still improvements to be made as we continue to grow and deliver. Is that supported by a dual listing or multi-listings? No, I don't think so necessarily. It drives complexity and cost, one should remember as well. Right now we are very firm on doing what we are doing.
Great. Okay. We've had a few more questions around Poland and just what have we learned so far? It's relatively early days, yes, we saw the good ramp-up that's going on there.
Yeah.
How are sales going? How are the sign-ups going? What impact are we seeing from the B2B deals? How happy are you with progress so far?
Well, here you see a happy camper. No, I think what is fair to say is that Poland has been a success. We upgraded the full-year outlook from SEK 250- SEK 500 for international on the basis of what we saw early in Poland and the distribution agreements that came into play. The learning is that the importance of sticking your chin out a bit, the campaign that Mia and her team created for Poland really resonated well. Act international, think really local, and make sure you find a voice quickly. Then just decide what is the one thing that will really drive something in the beginning. In Poland, it was Bundesliga and is Bundesliga. Very encouraging numbers to get to the SEK 500, very much of that coming from Poland.
Yes. The majority coming from Poland.
Yeah. Obviously we have Q3 coming up in a not too distant future, and that will be an interesting pointer, of course.
Yeah. Of course. Thank you. Gabriel, on the free cash flow generation 2024 and moving forwards and the working capital and how that plays out, is the move to free cash flow generation a temporary point, and then the working capital can change the other way around again? How do you think about that rollout over the next few years?
No. Based on the markets that we have announced today, of course, we have looked at beyond 2025 in our models. We're looking at much longer time frames when we do our planning. The free cash flow generation continues to increase, both from the Nordics, but also as international starts to become profitable. That contributes also to the free cash flow. We don't expect a big change in the working capital. Again, based on the markets that we have announced today.
Okay.
If beyond 2025 we expand into new markets, then we will have to come back to that.
Okay. Actually, that takes me to a very specific question here, which we got, which is, does the 15% margin in 2026 rely on the assumption of no new market launches that year? Will this change if you continue expanding after 2025? That's very specific.
It is very specific, but we are, of course, presenting today what is built in on the assumptions that we have now. We wouldn't go back on what we're saying unless there were very good reasons to create even more value. If we do new market launches or create something new, then that's a new addition to the strategy that we have now presented. That doesn't necessarily mean that the 15% margin is at jeopardy, because then we are four or five years down the line, and hopefully we didn't only meet, but we actually managed to beat what we've said. Then we can say, well, some of that we reinvest in new opportunities and some of it we make sure that we keep to deliver what we have said and think about how we best create value for our shareholders at that point in time.
I think for now it's just very important to gradually take everybody along for the ride and provide the right kind of updates every quarter so that people can see that our on-track statement that we've used now for three quarters holds true every single quarter.
Okay. Great. Going to change lane a little bit here. A couple of things picking up from Filippa's presentation earlier. The first one is, long term, what do you think is the capacity of your own studios to produce original content in terms of annual volume? How ambitious are we?
Our own studios are now small. We basically have less than a handful of production companies in what is now Viaplay Studios. There we have done the rebranding to Viaplay. That pointer is very clear. We have done that because they are a boutique for some of the projects that we really want to do ourselves. We have Lasse Hallström's upcoming movie, "Hilma," on the slate as an example. That's a great example. The output will be specific on specific projects, not volume. We have no intention to increase our investments in those kind of companies. We also have the minority holdings in FilmNation TV UK and Picturestart in the U.S. that we hope will translate into content output. Otherwise, why should we own? It all boils down to the contribution of great content for Viaplay. That's all it boils down to.
Our studios, the small part of it, and what is probably not likely to be a reported revenue stream in the future, it's a boutique for some high-end productions that we want to do, not volume.
Great. Well, that's a lovely segue to another question for you, Gabriel, which is disclosure, reporting structure.
Yes.
Anders has mentioned studios. When you think about the disclosure for the international operations, what should people expect moving forward over the next couple of years?
I think we're always debating that internally. I think the disclosure that we are providing right now is what you should expect short to medium term. As the business scales and we are operating multiple markets, then we might provide some KPIs for people to understand the development on that part of the business. When it comes to the studios, as Anders was mentioning, it's becoming such a small part of our external revenues, since everything is getting internalized. We are looking potentially next year to see how we report that, if even as in a separate one revenue line.
Great. As an organization, we're hardly shy of sharing good stories. I'm sure those anecdotes will keep coming.
Yes. Exactly.
as we hit milestones.
For sure. Just to add what Gabriel is saying about the disclosure, what we don't want to do is end up in an internal allocation game just to provide more disclosure. We are building a platform business where the totality of it is what really matters.
Yeah.
Dressing things up and down because you allocate cost in various ways, that's not a journey we want to embark on.
Absolutely. Back on the content side, for originals and maybe sports later in the DACH region, would you look to create general German language content or focus on each market more individually?
We will judge each and every market on its own merits, and see the potential in it. Do I think we will do German language Viaplay Originals in the future? Yes, I do. The region, the DACH region, is attractive enough to warrant such investments. You have the ability to let it travel. That's in a sense, that's a solid yes. We have actually embarked on this already. We have done U.K. originated originals. We have one, "Close to Me," up on stream right now. We even have a Canadian Viaplay Original that aired earlier this year. We're doing quite a lot and it will become even more transparent when we get international, because then you will start to see real usage on those shows.
Great. Okay. Anders, I think it would be helpful if we ended this Q&A sessions today where we started, which we talk about being a values-based organization. A Purpose-led organization.
Yes.
Can you just share with us a little bit of your thinking around that? Because obviously we're coming with a new sustainability strategy w e're looking at what we're doing as an entire organization.
Yeah.
How much of a priority is this for you and for NENT generally?
Well, it's a good note to end on because of everything we do, and we do a lot, this is the smallest as the biggest impactful part of our organization, of our business. If we get this wrong, we will fail. Being clear, I think as I said in my opening remark, with everything that has happened also with the pandemic and what that has done to all of us, our perspectives on work and work-life balance, you don't want to work for somebody who is not clear on purpose, clear on vision, clear on what you stand for, clear on where you want to go. You could argue that that is something that every company says, "Yeah, That's ticking a box on that," but it's not that easy.
Being purpose-led, if you get it right, it's such a powerful tool to create value for your employees, both reward, and potential future successes. This is the most important thing, that we get that right. I think we're well on our way to do it. I think it's a fantastic part of our success so far. It is extremely important.
Great. Well, listen, thank you both very much. We have more questions. I can only say that we will address those to any of you who've sent them in over the next day. I hope very much to come back to you. Please come to Joel or me with any other questions you have. Really enjoyed these sessions today. I hope they've been useful for you. That's it from me for now. Thank you, gentlemen. Now back to you, Mia.
Thank you, Matthew. I really hope that you've enjoyed spending the day with us, and we're so very grateful for the time that you have committed to listening to us today. Recordings of today's sessions will be available in the virtual lobby shortly. They will be there together with all of today's presentation decks. To conclude the day, I will now hand over to Anders.
Mia, thank you very much. Thanks to all of you who have been watching and spending the better part of the afternoon today with us. We really appreciate your interest and your commitment. I hope that we managed to convey all the positive energy and the excitement that we all feel for what we have ahead of us, and the journey that we've embarked on that so far has been very successful. It is a journey that creates a company that looks very different from the company that we embarked from back in the day. It's a super exciting journey for all of us on the team, and a fantastic opportunity for our employees, for our stakeholders, and for our shareholders. For now, I want to say thank you to my fantastic team who has worked so hard for this today.
I want to say thank you to all of you here in the studio for broadcasting this to the world. To all of you who have been watching this live stream, live broadcast today, continue to stay tuned, ask the questions that you may have, and as always, please take care. Have a great evening.