MMS’ Magnus Anshelm on the Present, Past and Future of Online TV and Advertising in the Nordics
“Online viewing started on an upward trajectory in March, and hasn’t stopped increasing. SVOD increased at first - but from July on, AVOD (ad supported) grew considerably.”
Magnus Anshelm is CEO at MMS – we spoke to Magnus to understand the past, present and future of TV across the Nordics, and how it fits right now with programmatic buying.
For those who don’t already know, who is MMS, and what does the company do?
We are a joint industry group dedicated to measuring TV audiences in Sweden. That means we are owned by the industry – by a broad cross-section of companies, including broadcast of course, but also both media agencies and the local advertisers’ association.
What makes us different is our broad scope. We’re not just looking at how ‘traditional’ TV is now being viewed online, but all kinds of videos online. And not just on broadcaster properties, but also across a broad range of publishers and newspapers’ online, plus other digital players such as Playad.
We deliver updates daily, bringing together both linear TV and online video. For now, the two measurements sit side by side – but ultimately, of course, they will combine.
Much has been made in other markets about the ‘death of linear TV’, ‘cord cutters’ etc. What is the state of TV viewing across the Nordics?
There are essentially two sides to this discussion. Long-term, linear certainly is declining, online increasing. However, as it stands, in Sweden average daily viewing still stands at about 2 hours linear TV and 1.5 online. Denmark and Norway are similar, while in Finland we’re still at about 1 hour online, and 2.5 on linear TV.
“What online has done is to increase viewing time overall, across the region”
It’s interesting to note how in both the Nordics and the Netherlands, we moved more rapidly to online than in the rest of Europe – both for viewing and ad spend. Of course, in the case of Sweden, now having 95% fast broadband coverage, and on average nine screens per household, all of the infrastructure is there for this to continue.
Linear TV viewing has always been lower for time spent in the Nordics versus Europe, especially Southern Europe. Sometimes as much as an hour different. What online has done is to increase viewing time overall, across the region – so we are now getting closer to that total European average viewing time.
How has TV viewing changed in 2020 since the pandemic?
Since the arrival of Covid, we really saw TV consumption change in two phases – to start, linear viewing increased – around news especially, as you might expect. But already in May, this came back down to a more normal level. While online viewing started on an upward trajectory in March, and hasn’t stopped increasing.
Drilling down within online video, SVOD (subscription video on demand) increased at first - but from July on, AVOD (ad supported) grew considerably. This seems to confirm there is a limit to the number of services people are prepared to pay for, and there is still room for ad-funded TV alongside it.
Overall, the pandemic probably boosted the structural changes we were already seeing. Especially in age groups like 50-65, it seems to have catalysed the shift to online viewing.
How have the major broadcasters in the Nordics adapted to the changes in how people are watching TV?
An inability to compete in online viewing would be a sure-fire way to fade away from relevance. So, in short, they’ve done a lot to counteract this. And the broad mission of MMS to develop a total video currency is also a testament to how seriously they take the challenge.
Public service TV has arguably led the way, with the commercial guys following close behind. Offering us freedom to choose when and how we watch has really been central to the plan for a long while now. But also extending that principle to distribution too – their own AVOD and SVOD services, with or without ads – as well as licensing programming through the telcos.
In some way they have been defensive perhaps, just as in other regions. But all in all, I would say they have tested and learned a great deal, and been courageous when it comes to breaking new ground. And to prove my point, their ad revenue has been really high – even hitting an all-time high in 2018, though at the same time ratings fell.
How are advertisers currently measuring their TV campaigns, and how (if at all) has this changed in recent times?
The short answer is ‘it has not changed much, but it is about to.’
At present, this still works by comparing one TRP (target rating point) offline with one impression online – which is of course like comparing apples and oranges.
We will soon be able to start matching the two together far more seamlessly. With the potential to change TV planning and measurement quite dramatically.
This total video measure is a hybrid system, taking in a 50,000 strong panel for online viewing, which covers all devices, combined with census data via comScore – all designed by our partners at GFK.
“if you want to get into this market, the message is clear - you need to have a freemium, AVOD version.”
Do you see the entry of larger US/Global AVOD platforms like HBO Max, Hulu, CBS across the Nordic market offering similar reach and ad space in the Nordics as they already do in their local markets?
Netflix is the dominant force over here. But if HBO, which is in 4th place, were to launch an ad-supported service, I could see this changing. Disney Plus will surely also have an impact. I think we’ll see lots of changes in market – but still, many people may just not be ready to cancel Netflix.
So, if you want to get into this market, the message is clear - you need to have a freemium, AVOD version. Otherwise you rely on people signing up who have 2.3 subscriptions already – how many can you have? More than 75% have at least one, more than 40% have at least 2 and there are 20% with 3 or more.
Looking to the future, how do you predict the TV ad market across the Nordics might change, over the coming year?
The interesting thing, and Sweden is an outlier here versus the other Nordics, is that total ad revenue of all video is 75% linear, 25% online. Online is at a very high level versus other countries. And its share will surely increase – but it’s unclear whether the total market of about 8bn kronor or 800m euros will also.
More advertisers will go online first, then for broad reach, will use linear, instead of starting with that first and adding on. We see this trend already and will see it more. But that doesn’t mean linear is on its way out – it will still have a function, as long at least as 1 hour is still viewed per day on average – but it is weakening step by step.
Some say there is a big risk that in future, we will all pay to avoid having ads. Perhaps they forget that ad-free viewing, through public service TV, has always been part of our experience.
The risk is that people who can afford to skip ads will do so – leaving an overall weaker, down-market advertising business. But I don’t think honestly this will be the case, I certainly haven’t seen that shift so far.
However, if the ads become too many, people will vote with their feet. At least for now, AVOD is increasing faster than SVOD. And one thing you can also say in ad-supported TV’s defence is that its content is more diverse. While subscription TV really only covers film, drama/comedy TV series and sport.
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