Viaplay Group AB (publ) (VPLAYB) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining this conference call at such short notice today. I am here today with our CEO, Anders Jensen; and CFO, Gabriel Catrina, to present and discuss what we have just announced earlier this morning, the launch of Viaplay into the Netherlands in Q1 next year. This will be our 6th international market and our 11th overall market when, including the Nordics. [Operator Instructions] You will also see the slides that we are presenting and can download the deck. A recording of this call will be made available as soon as possible this morning through the same link as this live event. I will now hand the call over to Anders to present this morning's exciting news. Over to you, Anders.

Thank you very much, Matthew, and a very good morning, everybody. Of course, we are super excited today. This is a piece of news that we've been working hard to put out and a piece of news that we are really excited to share with you. What I would like to do now is to take you through a short slide deck just to update you on where we are overall as a company, focus, of course, a bit on the Netherlands and then take as many questions as possible. There are things that we're not ready to share yet. And there's a lot to look forward to at our coming Capital Markets Day this autumn. But today, we're going to zoom in on what we can say around the Netherlands. So if we start with the presentation on Slide #2, Joel, please. I just want to recap who we are at Nordic Entertainment Group. We became NENT Group in 2018, when we were spun off from Modern Times Group and subsequently 1 year later listed at Nasdaq Stockholm as a separate company. And we've done all of this on the back of a very, very clear vision of who we want to be as a company and where we want to go and what we want to build. And in a very, very competitive entertainment world, it is very much about a clear purpose to be able to drive success in this marketplace. We want to tell the stories that touch lives, and we want to make sure that we expand people's perspectives and worlds. And we do it in an entertaining way, but we also do it in a willingness to really broaden horizons. If we take next slide, please. The next chapter that we're now embarking on and that we focus on today is to build what doesn't exist really today, the European streaming champion. The streaming growth has very much been driven by the U.S. alliance, and we think there is definitely room for the European equivalent. But you need to be ready to focus in a very specific way on how you build that and do things a little bit differently. In the Nordics, we have proven that it's possible to both compete with and beat the globals. We are, by revenues, the largest streaming service in the Nordics and we're not far behind on subscribers. We're now embarking on a journey where growth will continue and margins will expand. And we are aiming to have 6 million subscribers in the 5 Nordic countries at the end of 2025. The next important step in this next chapter is to export and customize Viaplay for new markets, leveraging all that we have built up in terms of superior tech and ways of working with the user experience. And then of course, we're looking at ongoing structural optimization. We have formed a joint venture, together with Telenor, to take care of our structurally declining but still very sort of cash-generative DTH assets. And we want to simplify the structure of the group to make sure that our equity story is very clear, easy to understand and something that really excites those who want to follow and invest in Nordic Entertainment Group. Next slide, please. In the Nordics, Viaplay is 1 of 2 must-have services. There is a very clear distinction between the top 2 in the Nordics, Viaplay and Netflix, and the rest of the players. And that is something that has taken time to build up. And it's built on the back of a very clear differentiation on who we are, what we want to provide to the users. We are streaming-first. That means that everything we do goes on to streaming 100%. Some of the content still has a life on linear channels. But everything goes on streaming. And whenever we can, we go streaming exclusive. That's a very conscious decision and a very clear focus. And that has allowed us to, over time, build the rationale for why Viaplay is a better place to consume content than other places, including linear channels. So this is something that we have focused on in a very, very long time. We've also invested heavily in our tech platform, one of the most, if not the most, advanced in Europe and definitely something that can compete with the globals. And we've built very much about -- around a good user experience and superior robustness, almost 100% uptime, 24/7 around the year. Given the enormous amount of sports, more than 50,000 live hours every year, robustness is key for us. And that, we have built in a very, very focused way. Then as you all know, a lot of things are happening in the world of content these days, especially again in the U.S. Access to traditional Hollywood content, if you will, is changing almost on a daily basis. We've known this for quite some time. And we have decided and we decided early on to start to invest in our own unique content slates. So we have over 100 originals on the platform. We are adding 40 this year. We will continue to build up and increase that volume, including local content in the new markets where we are embarking. And we want to make sure that this is something that really differentiates and creates excitement in the consumer markets. And we want to do it with very attractive price points. Then we're also open for business when it comes to partnerships. We believe that working with the local community on distribution and on content development is absolutely key for our success but also to share some of the success with those who are not embarking fully on streaming yet. And that is something that we look forward to share more about in the coming weeks and months. Next slide, please. The Nordics still hold a significant growth opportunity. And this is important to mention today because the comparison between the Nordic countries and the Netherlands is obvious, quite similar in both demographics, Internet penetration, streaming penetration, usage behavior. And we will probably call them, in the streaming context, mature markets. But let's remember, they're far from mature. There is still 30% or 40% household penetration and a lot more services for household to be achieved. So there is a lot of growth ahead of us in what is today considered the fairly mature markets from a streaming point of view. Next slide. Then our international rollout schedule. We held our Capital Markets Day, when we announced our international expansion plans, in November last year, where we announced the first 5 markets. We've launched the 3 Baltic countries, where we are on track with good traction for our services and very high conversion rates, high interest. We did that in March. We are coming to Poland in August, where we come with a very, very strong proposition on the sport side, led by Bundesliga. Then we do the United States towards the end of the year, where we don't do sports or will not do sports, but we will focus on a more Nordic noir, Nordic drama and international content slate. That, of course, will be a smaller service on such a large, highly competitive market but very relevant in fairly large target groups in such a large market. And we are very excited about the opportunity around that approach to delivering of our content. Okay. And then the news of today, Netherlands in the first quarter next year. Four additional markets at least will be announced at our Capital Markets Day, where we can give a full picture of the impact on the 5-year outlook. Next slide, please. Then we come to the Netherlands. On Slide 8, Netherlands is, in many ways, an ideal market for Viaplay. Yes, it is slightly more mature than the other markets that we have announced when it comes to the full proposition, the 3 Baltic countries and Poland. But as I mentioned, similar to the Nordics, there is a lot of growth ahead. The Netherlands is probably one of the most advanced countries in the world when it comes to quality on Internet connectivity. The providers and the distributors of broadband facilities in Netherlands are investing heavily in the best experience probably in the world. That is a very important starting point for us coming with a digital platform, where everybody, I mean, everybody with a decent Internet connection and a smart device can access our content. 42% of the households in the Netherlands have access to one or more SVOD services. The equivalent number is slightly above 50% in the Nordic countries. So the interest is high and the knowledge is pretty high, which makes Netherlands different from, for example, Poland, where growth will take a little bit longer since we are streaming-only. In Netherlands, it will go a little bit faster, but it is also more competitive. It's also -- that's also why it's so important for us to come out with such a strong proposition from the get-go. And with the rights that we have now acquired and with the ambitions we have to enhance it further, this makes the Netherlands a perfect fit for us in the growth trajectory that we have in our 5-year plan. The launch date, the pricing and the packaging will be announced in due course. We have, of course, a very good idea on what it's going to be and, of course, when it's going to happen. But we're holding back a little bit on that for obvious competitive reasons. Next slide, please. The growth potential in the Netherlands is significant. We expect here the number of SVOD subscriptions to grow with 69% in the coming years. The penetration will grow almost 40% in the coming 5 years. And the number of SVOD subscriptions per household, what is today called stacking, will grow close to 20% in the coming years. And the SVOD revenues will almost double. And they will probably go beyond that number because that number was anticipated before we announced our launch of Viaplay in the Netherlands. And we are, in many ways, making a market when we come to new markets because we are streaming-first and streaming-only. And this is different from the Nordics, of course, where we also have other elements to our business. But in our new international markets, it is streaming-first and streaming-only. Next slide, please. We are focusing a lot of sports. And we'll talk about the sports in a second. But what is really, really interesting with the way we want to address our consumers is, of course, the breadth of service that we're going to going to provide. You can expect a significant library of a lot of international and U.S.-based content but more importantly hundreds of seasons of Viaplay Originals. The starting point is that they are to the majority, Nordic, some will be in English language. And we will now start to develop local content in the Netherlands as well, content that will then travel to other markets. So we're building an ecosystem of content that looks a bit different, that has a bit different tonality than the big Hollywood shows and something that resonates with an international audience in a new and very attractive way. And we have a lot of proof points on why we think that's going to be the case going forward. Next slide, please. Then coming to the sports rights. Formula 1 in the Netherlands is, for good reasons, a very, very popular sport. The brightest-shining young star, Max Verstappen, is going from clarity-to-clarity and he has many years of success ahead of him. And the interest is massive in the Netherlands for his endeavors on the races. So we come to the Netherlands with a promise to make Formula 1 even more broadly available. And again, let me repeat myself, everybody with an Internet connection will be able to subscribe to 100% of the content that we have on Viaplay, including everything from Formula 1. And we will, of course, make sure that there will be some events that are available free-to-view. There will be practices and content around it that we will make sure is available. But we are disconnecting Formula 1 from a specific connectivity provider. Anybody with any connectivity provider will be able to download the app and enjoy all the benefits of Viaplay. And Formula 1 will be at the absolute spearhead of that experience. On the football side, on the next slide, we are starting with Bundesliga. Bundesliga is a very important partner for us. We have extended our agreement across our footprint and now including the Netherlands until 2029, which is a groundbreaking agreement with such a large and important league, a league that I think personally will go from clarity-to-clarity also in the coming years and become even stronger and more relevant in an international context in the coming years. For both Formula 1 and for Bundesliga and for the majority of the larger sports that we will be doing, we will be building world-class studios in the same way that we've been doing in the Nordics. And again, let me remind you, we are broadcasting more than 50,000 live hours every year. We are streaming more sports probably than anybody else in the world. And we are investing in studios that are at the absolute top of the line when it comes to new features, new technology. And we are looking for the next-generation talents in front of the camera. There will be, of course, Dutch commentators and there will be a local studio programming. But we also want to create innovation and find new voices for a new generation and generations to come. So next slide, Slide 13. Viaplay will come to the Netherlands in Q1 2022. We will announce the exact timing, the pricing and the way we're going to package and the way we're going to come to market and with whom we will cooperate to create distribution opportunities later this year. We are very, very excited about this opportunity. Let me wrap up by reminding you of the targets that we set out in November last year on Slide 14, 5 new markets in 2021, 5 more markets in '22 and '23. And then there is an additional 2 years before we hit 2025. So who knows? We may fit in an additional number of markets, let's see. We are targeting at least 4.5 million subscribers. And with the addition of the Netherlands today, we are increasingly bullish about the opportunity to both meet and beat that target. We will be EBITDA accretive in our international segment in 2025. We are estimating roughly SEK 2.5 billion in accumulated EBIT losses to get to what i a very, very attractive EBIT levels and margin levels. The equity is raised. We did that on the back of our first quarter results. So we are well funded for our expansion. And then we definitely see opportunities to make the investments that we're making into very, very attractive return investments for the company and for our investors. On Slide 15, you have all the strategic targets. I will not go through them in detail now. But I would like to go to our Q&A session now to make sure that we answer all of your questions. So Matthew, over to you.

Great. Thanks so much, Anders. We will, as you say, now move to the Q&A session.

[Operator Instructions] Just whilst you're formulating those questions, one first one here, Anders. We noticed that you have used the phrase at least when referring to the SEK 4.5 million target. We know this is one of your favorite phrases. Should we interpret that as your temptation to raise the guidance further at this stage?

Yes. No, but I am very tempted to raise guidance as you know and as Gabriel certainly knows. We have strong momentum in our businesses. There's a lot of interest in what we're doing. The reason why we haven't increased targets for this year is, of course, there is a degree of uncertainty of what's going to happen when we come out of the pandemic. But the underlying momentum is very strong. We're now amending at least in the context of the international expansion in the future years, when we are hopefully definitely out of the pandemic. It's on the back of everything that we have seen so far, the discussions that we have with the local distribution and creative community, the rights that we have secured, the ones that we have announced and the ones that we have yet to announce. It looks very strong. And I'm also very, very impressed with the strength of the tech rollout, which allows me to say something like potentially we can add some more markets because the scalability of our platform and the way the team is working has simply gone from strength-to-strength. So yes, I'm going to say at least until I can give you a new number.

Great. Thank you very much. The questions are rolling in now. So we'll start with one from Mikael at Carnegie. And this would be directed really to you, Gabriel, actually. So will today's announcement change your guidance in terms of revenues, costs, working capital until 2025? So any change on that side?

No. There are no changes to the guidance as of now. We will, of course, come back when we have the full picture at the Capital Markets Day and discuss if there are any changes at that point, especially in the context of all the other markets, the other 4 markets that we're still planning to launch. But as of now, there are no changes.

Great. Thanks, Gabriel. And for everyone's information, the Capital Markets Day will be at the end of September. And we will send out the invitation in due course. Now Anders, the question from Stefan at Kepler Cheuvreux. You will take over Bundesliga rights before the launch. Are you going to sublicense the first season?

Yes. We will be working with a partner before we can put Viaplay on the ground. That's a great opportunity to form partnerships and opportunities to working together, so yes.

Great. Okay. And then next from Omar at Morgan Stanley, three questions. First one, have you had any conversations with the cable and IPTV distributors in the Netherlands about wholesale distribution deals? And do you anticipate signing those as well as pushing a DTC product?

No, we haven't had any direct discussions yet since we're announcing today and we haven't been able to share these news. And we didn't want to enter into complex NDA processes. And trying to keep something like this contained is hard enough. And it's been out -- it has been out in terms of rumors in the Netherlands. And that has then yielded quite a lot of inbound interest from potential partners in the Netherlands with whom we are starting to discuss today basically. So nothing done, nothing firm yet. But the interest appears to be strong, and we look forward to those discussions.

Great. And then Omar's second question -- I think we've already answered your third question, Omar. But your second question, in non-sports content, how important is U.S. English language content? How much of this content will you have at launch?

Well, I can say today that the amount and the number of hours, including the U.S.-originated or Hollywood content, if you will, is going to be quite significant. Then over time, our ambition is to make the original slate and portfolio both in English language, Nordic languages and Dutch to make that a bigger and more important part. Because we all know that the changes that are happening and the consolidation around sort of the U.S. studios and the more sort of style approach that we see in the U.S. changes the content landscape. And we have expected this for quite some time. And it is key for us to build something that is unique to Viaplay. And the renting content, if you will, from Hollywood has been a fantastic model for all of us for many years. But it's changing. So we're going to up our investments in original content, including Dutch content.

Great. Which takes us on nicely to a question actually from Jamie at Berenberg. What are the near-term and longer-term ambitions in terms of the number of Netherlands originals per year, do you think?

Well, I think it's a little bit premature to give a firm number because whatever I say, I think it's going to be on the low side right now for everything that we know. The Netherlands, it's one of the most vibrant, creative communities in Europe. And I think we're going to find so many great opportunities to develop content that also has international feel and opportunity both in local language and in English, so -- but we want to work with the local community, but at least 5 to 10 per year, when we were up to full speed. It will be a gradual buildup. It takes a bit of time, of course. But Filippa Wallestam, our content officer, and her team are sending out briefs today.

Great. And then Jamie's second question was for the Formula 1 and Bundesliga rights, could you give an idea of the cost of the rights? We know we don't give it absolutely but relative to other markets.

They are very competitive, I would say. Given the size of the market, if we compare, for example, the Nordics, it's 8 million households in the Netherlands to compare with just a little bit more than 4 million in Sweden, as an example. And sports rights have been, to some extent, a bit consolidated in the Dutch market. That has allowed us to go in at attractive levels. And it's also important to say that we are watching -- or we are considering the sports rights that we are now acquiring from a multi-market perspective. With the addition of Netherlands, Finland in '22 and Poland in '23, we will be in 10 markets with Formula 1. That forms a very strong alliance and partnership. And that has allowed us to make sure that -- if you look at the [ 360 ] around the cost of Formula 1 in all these countries, it is very, very attractive, same goes for the Bundesliga until 2029.

Okay. Very specific question here. Do you plan to get into Belgium as well, given that Dutch is spoken in Flanders?

Well, any news on additional markets, and Belgium will fall into that bucket, will have to wait until the Capital Markets Day.

Okay. Another question here. Can you talk about the consumer interest in Formula 1 and Bundesliga in the Netherlands in terms of viewership, fan base, affinity and interest compared to other countries? And comments, actually in the second part, we've already answered, so on that particular point.

Well, Formula 1 is massive in the Netherlands as I mentioned briefly in my intro. Bundesliga is smaller than Formula 1, but a very attractive right -- if you look at the international football rights, not just the Eredivisie, the first division in football in the Netherlands is, of course, the biggest league. But it sits there nicely alongside Premier League and ahead of some of the more Southern European leagues in the Netherlands. But the Formula 1 is, of course, the crown jewel in many ways. And we think that there is many ways to develop that and make it more accessible to more households and make it an even bigger and even more exciting, high-octane rights in the Netherlands.

Great. Will you start an advertising model in the Netherlands or launch any TV channels in addition to Viaplay?

No, we have no such plans. I know there is a lot of sort of mixing of AVOD and SVOD and looking at sort of premium opportunities on the streaming side. We like to keep things clear and to not mix hot and cold water too much because it diverts focus. And it makes it unclear, I think, in my view, from the consumer, what you will get. Very favorable price points. You sign up, you get everything and you do it without ads. That's the model that we are exporting. No TV channels, that I can be very clear.

Okay. Can we expect on-site coverage for Dutch sports fans, so not only from a studio in reference specifically to F1 races and Bundesliga matches?

Yes. We will do local productions and take the experience of those local productions and the in-studio experience that we will set up in the Netherlands, hopefully, to a new level. It's already on, I think, a high level and the quality is high in, as I said, a very strong market. But I dare to be rather bullish on this because we are good at what we're doing, and we have been doing it for a long time in multi-markets. And we know the value of localization. We know the value of getting our feet on the ground when it comes to the sports and to make sure that we work with the best local professionals. We will do exactly that in the Netherlands.

Great. And then when we think about the 4.5 million, how many of those do you think will come from the Netherlands?

Yes. We don't break that down at this point for competitive reasons. And we haven't announced the full 10 markets yet. So it will be -- it will sort of tip the balance if we start to talk about individual markets. But of course, if you look at what we've announced so far and we focus and we take the U.S. out of the equation, given that it's a different proposition, just between Poland and the Netherlands, we're addressing a footprint with 22 million households. Streaming penetration will go between 60% and 75%, we think, and depending on which of the countries we are talking about in the coming years. And we want to build a major household service in those countries, streaming-first, streaming-only available for everybody with a decent Internet connection. Of course, there is massive potential in that footprint.

Okay. And then a question on pricing. Which benchmark should we look at in the Dutch market? With premium sports content, presumably you will hope to launch with premium pricing. And then connected to that is another question, which is will you do what you've done in the other markets and price your offerings to the Netflix level that will add source to that?

We're going to have to come back to that later on. We do have a good idea of where we're going, but we don't want to say too much too soon for obvious competitive reasons. The accessibility, simplicity and affordability are keywords when we go to a new market. And we want to deliver exactly that in the Netherlands. So without saying too much, it's going to be very easy to understand. The value proposition is going to be very clear. And the price, whatever, or the prices, whatever it's going to be, it's going to be attractive.

And now an interesting question to follow up on the Super League. What's your view on Bundesliga relevance, given the financial difficulties of the Italian and Spanish leagues and clubs? Can Germany emerge as a more relevant international proposition for companies like yourselves?

I think so. And that is -- it's a very good question. And it is a reason why we are taking such a long-term bet together with the Bundesliga. We have gotten to know them, not just as a seller of a sports rights but as a good partner with long-term ambitions, with solid financials. I think that was a good reason for why no German teams were in the quickly emerged and equally quickly died Super League. And I think the financial difficulties that has surrounded the Southern European leagues is something that harms the ability to build this next-generation interest. And many of the young stars -- so today, see that in the Nordics, many of the young stars, and that goes for the Netherlands as well, they take their first steps into their professional lives in the German teams. And I think that following and the profile of those young stars is super, super interesting. Because it's very different. Football -- a young, emerging football star today is very different from what it was 10 years ago in terms of attracting interest from younger audiences. So we are taking a very calculated bet on the Bundesliga becoming an increasingly attractive property over the coming years. It's going to be up there with Premier League, I think.

Okay. And then next is will F1 TV Pro still be available post your launch in the Netherlands? Or will these subscribers have to move over to Viaplay?

We will work with the rights owner, with Formula 1, to develop the best split of the services in the market. And nothing that has been available that is sort of beneficial for the F1 fans will be removed. Exactly what it would look like, we'll come back to. But again, rest assured, we come to the Netherlands to make Formula 1 bigger and more available for more people.

Great. Then we've got several questions here about our further ambitions on sports rights, not just in the Netherlands, but in the Baltics and Poland as well. And maybe you could comment on that, not least given some fairly major source rights are coming up for auction or renewal at the moment.

Yes. We will be looking at all of those opportunities. We are in the new markets trying to focus ourselves around a number of partnerships that we have forged over many years on the back of our position in the Nordics. You have Bundesliga, you have Formula 1, you have NHL and a few others that we have forged long-term relationships with. There are others coming up and we're looking at them all. When it comes to the country specifics, in Baltics, we are -- I wouldn't say we're fully invested, but we have invested quite a lot with the addition of Champions League and other rights in this fall. And given the size of the markets, I'm not sure there is scope to do much more, just to be quite clear around that opportunity. Poland, huge market, massive growth potential, early in the streaming growth race. We'll definitely look for more opportunities in Poland and the Netherlands.

Okay. Netflix recently announced that they would set up a Nordic production hub in Stockholm because 130 million of their 200 million subs watch Nordic content. And now you are launching in their backyard, where they're headquartered and also where Disney did its first international launch. Are the streaming wars hotting up now? And what response do you expect from your competitors?

I think it just -- what they're doing -- and I prefer to look at what we're doing. But what they're doing is, of course, just underpinning what we know to be true, Nordic content finds an international audience in a quite appealing way. And we will package it in a very appealing way. And the fact that Netflix has an office in Stockholm means that, that will just add additional drive to the creative community. Will they produce the amount of Nordic originals that we're doing per year? I doubt it. And even if they were, it will take some time to get to the kind of levels where we are at. So I think for both us, for Netflix, for Disney, for the newly shaped sort of potential merger between the Time Warner, HBO and Discovery, Discovery Plus, it clarifies the positions on the market. And I think that's good for everybody. Because over time, there can only be so many. And we all will have to work with pricing in the future to make sure that we hit the right sort of levels versus the investments that we're making. And clarity in positions is very, very clear. And I think our position is getting clearer by the day.

Okay. And then a next question from Klas at Nordea. Could you give us an idea of your pricing strategy over time in the international markets? Granted that you are launching with quite low pricing in one package in the Baltics and Poland, will you move to 2 or more packages over time and look to raise pricing accordingly?

It remains to be seen. We have good ideas based on our experience. But we also want to follow the consumer behavior and the consumer changes. And I think that the one smallest common denominator with everything that we want to do in the future is it must be simplicity. It needs to be affordable and it needs to be simple to understand. Because where TV has ended up, traditional TV before this decline and before the entry of streaming, was very large packages, complex pricing, hard to understand, that you have to buy things that you don't necessarily want. We -- in the early days of where we are in the growth of streaming, we cannot make a mistake -- mistakes of the early -- of the late stages of TV and make it complex. So whatever we do, it's going to be simple to understand. It needs to be affordable. We should remember that the basic streaming service today is at the price of a half-decent pizza. So it is still very, very cheap.

Okay. Then next, we have a question actually with regard to the Nordic business, which is can you give an update on the subscriber trends for Viaplay in the Nordics so far in 2021 and the reception of the price changes that you made in March?

Yes. We had sort of a good number in Q1, good underlying momentum. We will continue to do that for everything that we know. It is also, as we've said before, at least in the first half of the year, it's fairly distribution partner-driven because that's where the market is right now. And with the underlying momentum we have, I could be tempted, as I also said on the back of Q1, to upgrade the Nordics. But we are finding ourselves in a very, very unusual situation that we are hopefully on the way out of the pandemic, where the minds will go elsewhere and there could be a temporary slowdown in the sign-up of streaming services. That wouldn't be strange. Because we all need to get out and do other things. But the behavioral change has happened. And streaming-first is now the sort of more and more -- the way more and more households are thinking. So in that sense, the pandemic has fast-forwarded the growth of streaming with maybe a couple of years. And that will not change.

Great. Then we have a question about whether we will have an office in the Netherlands and how many people we will employ on the ground.

Well, it depends on what we mean with an office. We will definitely open local studios and work with local production and local professionals around sports. Whether that sort of entails an office or not, you can probably debate. But a big office, like we have in Stockholm, no, that's not the plan. And that's the benefit of an asset-light, platform-based digital service that we don't need to have too many offices and overhead in many markets. With that said, over time, there will be a need for hubs to make sure that we cater for multi-market opportunities with studios equipment as an example and working with the local creative community. And I am excited about exactly that in the Netherlands. So let's see what the future holds.

Good. Then there's a number of questions here about whether Formula 1 is available for free at the moment in the Netherlands. And will we make anything available for free and where? I know we touched this on a question we had earlier, but just so we can clarify.

No, it's not available for free. If you link it to a specific broadband connection or a specific other service and say, "If you buy this, you get this," then of course, it's not for free. So it's a matter of what perspective you have. We want to make it available for everybody, indifferent of provider of connectivity. Then we will work with all the providers of connectivity, whether they are mobile or fixed broadband. And we think there are various ways of doing packaging. But a solid consumer promise from us to the Dutch audience is that it will be available for everybody. And you can choose your connection yourself, we don't interfere with that.

Okay. And then a bit more of a macro question, going back to what we discussed earlier. The TF1, M6 intended merger and what's been said by media and RTL and others around sort of consolidation of European free TV, do you think that's likely? And what would that mean for NENT Group?

Well, I think the jury is still out whether there is a real case for it. In-market consolidation, I buy the need for that. Cross-border consolidation, the synergies are insignificant. So it wouldn't be a synergy case. It would be a roll-up of highly cash-generative, interesting linear TV assets that are structurally challenged. But volume is always interesting in structural declining situation because you can get more out of it. But the synergies are limited if you look at it in a multi-market perspective. But I'm -- when you look at competitive areas that are under pressure from new technologies, like we have with linear TV, consolidation is a good thing because it allows people to invest for longer and create something that is valuable for the consumers. We don't see ourselves as a consolidator, if you will, in that area. Our linear TV assets are playing a very important and good part in providing cross-promotion power and cash to our streaming ambitions. And that we will hold on to for as long as it makes sense. And then we'll see what happens.

Okay. Now a question about something else as well, which is Sumo Norway has just raised its top package price by 25% or so. You're coming into the market next year with the Premier League rights. Does this mean that there's a huge potential price increases in the Norwegian market for Viaplay?

Well, at face value, there is, of course, a potential for price increase. I'm not sure that's the cleverest thing we can do. Our ambitions in Norway with Premier League, with skiing, with all the originals, and we have some fantastic success right now in Norway with Viaplay Originals, we want to make Viaplay the #1 service for as many households as possible in Norway. To price ourselves through the roof, as they are doing right now in my view, is not the way forward. There are other and more clever ways to work with packaging and affordability and accessibility with all the fantastic rights that we have. We have never been in a stronger position in Norway than we will be from the second half and onwards next year. We're not going to give that away to price points that alienate the majority of the Norwegian households. Exactly what that means, we will have to come back to. But I'm not saying that, "Yes, that's great potential, we're just going to shoot the prices through the roof." I think that would be a massive mistake.

Okay. And a follow-up on Bloomberg. You mentioned in an interview today that you are seeing a record-high conversion rate for trial subscribers in the Nordics. Could you give us some additional color on that statement?

For the Baltics?

Yes. For the Baltics.

Bloomberg out for the Baltics. Yes, well, what we see is that sign-ups are going more or less according to plan. It is immature markets where we see high interest. It's going to take a bit of time to build a position in these markets. But what is really, really encouraging is to see that the ones that are signing up are converting to paying subscribers on very high levels. So once we get people onboard, they really commit to the service. And in the Baltics, the main driver for that conversion is Formula 1. So that's an interesting proof point for us in the Baltics, small markets as they are. But we'll be able to give more on that when we close Q2.

Great. And a very specific question here. How many incremental international subs can you add compared to your current 4.5 million target without having to increase the expected losses figure? It's very specific.

It is very specific. And as Gabriel mentioned earlier on, we're going to have to wait until the Capital Markets Day before we give an updated view on the overall financials, revenues, EBIT, cost. Doesn't mean that we have to add a lot of more cost, but we may change and shift some of the structure on when we take the cost and how we do it. But whatever we do, we do it the idea of creating an increased upside. So we have established a baseline of what we want to achieve as a company. Whatever changes we do, we do it to improve that. That is probably as much as I can say today. It is very dynamic markets out there, and we see more and more opportunities on a daily basis. And between today and the end of 2025, that's an eternity in our industry and a lot of things will happen. And we will seek to use the firepower investments that we have to get as many opportunities to stand stronger at the end of 2025.

Great. And then I think one final question. If you group your target markets that you haven't announced together, how many more of the U.S.-style market will you bring Nordic-specific content do you anticipate? And is that really limited to the larger European markets when you think about it?

No, it's not limited necessarily to the larger European markets. Because the flexibility and efficiency from a cost perspective in our platform allows us to go to basically any market indifferent of size with any kind of proposition if we see that there is a good return on that investment. So it's not limited only to the larger markets. But we are seeing now with our Nordic original slate, with the international slate that we are adding and with the local slates that we will be adding as well, that is a service that can find its audience in more and more markets. And with the 3 Baltic countries, with Poland, with Netherlands, we are looking at more than 25 million households where we will do sports. And it's fair to assume that an important part of the next wave of countries to come is the more specialized markets. But it's not just about Nordic content. It is about original content in an international context.

Okay. I think that's it on the questions. I mean, a lot of them are of the same types. So I'd just say to everyone, if you do have any follow-ups, please let Joel or me know. We're very happy to take those. You can download the presentation in the interface here, so please do use that. And there will be a recording afterwards for those who have missed it. So this will live on and live forever. So please do use that functionality. And we're looking forward to keeping you updated on our further progress in the weeks and months that come. As you know, we're creating a constant news flow here and there will be more of that. So we're looking forward to that. And before we close, I will just hand the call back to Anders now for his final comments.

Yes. First and foremost, I just want to thank you for your interest today and for dialing in. We are, of course, very excited about today's news. We're also excited about the fact that we know that we have a lot of news ahead of us and a lot of interesting things to discuss with all of you. The opportunity to become the European streaming champion and to build something that is truly unique is clarifying by the day. And what is happening around us in terms of consolidation and new constellations being formed is just feeding to that opportunity in my view, so very, very excited. So thank you very much for your interest and then look forward to see you soon again.

Good. Thank you, everyone. That concludes today's call and speak soon.