The Swedish media economy in 2017
The Internet is about to become the main playing field for media companies. An analysis of the Swedish media companies’ economy in 2017 shows the competition between media companies and media branches in Sweden – and not least the competition between Swedish media and global online networks.
Medieekonomi 2018 [Media Economy 2018] is an annual report on the media industry’s economy, published by the Swedish Press and Broadcasting Authority. The author of the report is Jonas Ohlsson, Nordicom.
Every second advertising krona spent is online
In accordance with the overall economic situation, 2017 was a prosperous year for media companies in Sweden. Among other things, the GDP showed good growth, the unemployment rate decreased, and households’ disposable income increased. Investments in the Swedish advertising market increased by almost eight per cent from the previous year, and the total advertising sales were the highest ever at SEK 37.6 billion (EUR 3.9 billion).
The online advertising sales accounted for over half of the total advertising investments, equivalent to just over SEK 19 billion, and for almost all the growth. However, almost two-thirds of the online advertising investments went to global players such as Google and Facebook.
Advertising in Sweden 2016-2017 (SEK million)
Source: The IRM Institute for Advertising and Media Statistics.
Different developments for television and radio
The Swedish commercial TV market consists of three major players, and the commercial radio market of two. In linear television and radio, public service companies SVT and SR are the largest companies in terms of market shares. In 2017, 37 per cent of audiences’ time spent on traditional television viewing was devoted to SVT, while SR’s share of radio listening was 77 per cent.
The transition to a larger proportion of media consumption online means that the concepts of "radio" and "TV" become more blurred. In Sweden today, Netflix is the market leader in user-funded online TV. On the advertising market, YouTube has a corresponding strong position. However, the Swedish television industry is not an industry in crisis; both TV4 and MTG’s TV business have profitable operations on the Swedish media market.
While there was a modest increase in TV commercial sales in 2017, sales of radio commercials increased by 14 per cent to an all-time high of SEK 985 million. At the same time, radio’s share of the overall advertising market was three per cent, while the equivalent for linear television was 15 per cent.
Daily newspapers fighting for ads and audiences
Newspapers comprise the media sector most affected by competition on the media market. In 2017, newspaper companies’ aggregated revenues dropped by almost eight per cent. The industry’s total turnover was just over SEK 15 billion, which means that the newspapers have lost about 30 per cent of their revenues over the past ten years.
The main explanation for declining revenues is decreased advertising sales. The growth in newspapers’ digital advertising sales (+6%) did not compensate for the decline in print advertising sales. In 2017, Swedish newspaper companies in total sold digital advertising for around SEK 2 billion. Evening papers Aftonbladet and Expressen accounted for more than half of the newspaper industry’s digital advertising revenues.
As advertising revenues have decreased, investments in gaining digital audience revenues have paid off. However, even though the growth in paying digital subscribers was strong in 2017, this does not make up for the losses due to decreased subscriptions to printed newspapers.
Spotify is No. 1 in revenues and No. 1 in losses
Since 2016, Sweden’s largest media company is Spotify. With revenues in 2017 of SEK 39.4 billion, and an operating loss of SEK 3.6 billion, this simultaneously makes Spotify the largest media company as well as the one reporting the greatest losses. The second largest media company, Bonnier, also made losses in 2017. The other three top-ranked media companies in Sweden were Modern Times Group (MTG), the public service group (with SVT, SR and UR), and Com Hem.
About the report: The data in Medieekonomi 2018 [Media Economy 2018] consist primarily of information from the media companies’ official accounts for the 2017 fiscal year. Medieekonomi is an annual report, published since 2016 by the Swedish Press and Broadcasting Authority. .