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Latest Reports

Venture Insights reports inform and enable better decision making through independent, objective, and high quality insights, analysis and thought leadership across the media, digital and teleco industries in Australia and New Zealand and with global insight from our European partner, Enders.

Tech

All companies are impacted by the evolution of technology and the changes in consumer behaviour that it enables. Our reports explore macro tech trends such as blockchain, artificial intelligence, drones, robotics, to determine how different industries will be impacted.

Media

The pace of change in the media industry has reached unprecedented levels. Global challengers are disrupting long established incumbents and attracting sky high valuations.

Telco

The wireless data revolution and cloud service provision are transforming the telco sector. Ambitious companies are investing in infrastructure, device innovation and cloud solutions as demand continues to explode.

Energy

As the energy sector transitions from fossil fuels to renewables, technology is driving changes in generation, distribution, storage and consumption. We track the challengers, the impact on incumbents and the policy debate.

Health

Technologies such as artificial intelligence, robotics, wearables and apps, coupled with genomics and the personalisation of health, are transforming the consumption, provision and management of healthcare. This healthtech revolution is being driven by consumers and healthcare providers alike.

Fintech

Fintechs are transforming the financial services market. Established players are responding through a mix of investment and innovation. Our reports cover areas such as lending, neo-banks, payments, robo-advice, insurtech and blockchain.

  • New
    February 19, 2019

    Domain 1HFY19 update: pricing power and depth penetration save th [...]

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    On 15th February 2019, Domain reported its 1HFY19 earnings. Pricing power, depth penetration and adjacent businesses drove revenue growth in an otherwise tough housing market while weakness in print meant overall revenue growth was flat YoY.
    Sector .
  • New
    February 18, 2019

    Telstra and Optus – nbn pain, falling ARPUs and the fight for 5 [...]

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    On 14th February 2019 Optus and Telstra announced their latest earnings. Both revenue and earnings remained subdued as subscriber growth was offset by a slowdown in NBN migration payments, and continuing pressure on mobile ARPUs. 5G and Fixed Wireless remain key growth areas going forward.
    Sector .
  • New
    February 15, 2019

    European pay-TV: Resilient in the face of SVOD’s growth

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    Across the EU4, pay-TV is proving resilient in the face of fast growing Netflix (with Amazon trailing), confirming the catalysts of cord-cutting in the US are not present on this side of the Atlantic. Domestic SVOD has little traction so far. France's pay-TV market seems likely to see consolidation. Meanwhile, Germany's OTT sector is ebullient, with incumbents bringing an array of new or enhanced offers to market. Italy has been left with a sole major pay-TV platform—Sky—following Mediaset's withdrawal, while Spain's providers, by and large, are enjoying continued growth in subscriptions driven by converged bundles and discounts.
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  • New
    February 14, 2019

    UK Cairncross: platforms intervention to save news

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    The Cairncross Review has now reported on the tough question of “how to sustain production and distribution of high quality journalism in a rapidly changing technology environment”. New codes of conduct for the platforms and publishers are the Review’s key policy recommendation. In particular, the Review addresses the sustainability of public interest, including local, journalism. This news is important for democracy, but expensive to do well, not particularly popular and most sabotaged by an online ecosystem that rewards traffic over quality. This is a landmark public intervention, but implementation will be critical, even if there is no silver bullet – platforms, publishers and citizens need to rise to the challenge.
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  • New
    February 13, 2019

    AI in Insurance: Disruption Assured

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    Artificial intelligence (AI) has enormous potential to disrupt across the data- and process-heavy insurance value chain. The growth of AI startups and adoption of (AI) by Australian insurers began in earnest over the last two years. The approach taken so far is one of collaboration rather than direct competition between incumbents and disruptors.
  • February 12, 2019

    Wobbles ahead for TalkTalk’s fine balancing act

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    TalkTalk is delivering on its subscriber and revenue growth targets but is straining to get there. Price rises such as a £4 ‘TV access fee’ look increasingly risky. Whilst migrating to discounted high-speed helps to deliver top-line growth, margins are c. 40% lower; an unwelcome dent to already negative cashflow and stressed leverage. Both TalkTalk’s focus on revenue growth in a tight market and fibre rollout plans look increasingly unaffordable; a more modest ambition of stable revenues might allow a healthier business model to unfold.
    Sector .
  • February 11, 2019

    REA Group 1HFY19 update: growth in a challenging environment

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    On 8th February 2019, REA Group reports its 1HFY19 earnings. Core Australian business continues to drive earnings and revenue growth in spite of a tough macro environment but a write-down in the Asia business impacted earnings for 1HFY19.
  • February 11, 2019

    UK TV set viewing trends: linear audiences tumble in 2018

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    2018 was another bad year for traditional TV set viewing of broadcast channels, with a 5% decline year-on-year—its steepest since 2011. The decline accelerated among most demographics, but particularly for 16-34s, down 13% YOY from their already relatively low levels of TV viewing. Unmatched use, which includes viewing to Netflix, Amazon and YouTube, continues to grow, up 16% YOY, with both linear viewing and unmatched use becoming increasingly solitary activities. While heavier linear TV viewers are accounting for a greater proportion of linear TV viewing, it is the lighter TV viewers that are accounting for a greater proportion of unmatched use. Within the broadcast ecosystem, ITV had the strongest 2018 thanks to the FIFA World Cup, more Coronation Street, and Love Island. Most other broadcasters struggled in terms of viewing share, but the maturity of the market means major shifts continue to be rare.
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  • February 7, 2019

    TPGs merger strategy must focus on potential merger undertakings [...]

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    The ACCC has extended its decision time for the proposed TPG-VHA merger and has raised preliminary concerns that it will lead to a substantial lessening of competition. TPG has announced that it has ceased the rollout of its mobile network. Our report looks at the likelihood of whether the TPG/VHA merger will be approved given the potential no-merger test options which the ACCC could consider. 
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  • February 6, 2019

    UK Retail news update for January 2019

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    The volume of retail sales (excluding fuel) rose 2.6% for the year 2018, thanks to improved consumer sentiment on the back of the Royal Wedding, FIFA World Cup and warmer weather. With no special events in 2019, the environment for retailing will be bleaker, with or without no-deal Brexit. December retail sales volumes rose 1.7% year-on-year, less than half the pace of November, as consumers shifted spend to Black Friday/Cyber Monday. We predict the trend will amplify in 2019, as consumers increasingly target their spending on discounted products, with direct implications for the timing and nature of advertising. The value of retail sales (excluding fuel) was up 4% in 2018 as a whole, masking the tale of woe on the high street. Offline sales fell 1%, while online sales boomed, growing 14% in value, a structural trend for 2019.
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  • February 6, 2019

    New Zealand Mobile Market Outlook

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    The New Zealand mobile market had been traditionally characterised as an oligopoly that is dominated by the prepaid segment with high prices, lack of product differentiation and low usage. However, this market is about to see a rise in competitive intensity driven by 2degrees’ move to gain share in the lucrative postpaid and business mobile segments. We believe Vodafone NZ is most at risk and could lose approximately 3% of its subscriber market share by 2022. The emergence of utility companies offering mobile products will also increase competition and create more “sticky” consumers. We forecast the mobile market will remain the largest segment in the telco market with NZ$3.2bn revenue by 2022.
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  • February 5, 2019

    Why does Amazon sell the Echo?

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    Smart speakers like the Amazon Echo and Google Home accelerated their prodigious rate of adoption in Q4 2018, and we expect they will soon be in 20% of UK homes. Amazon and Google price devices low to drive adoption to mass-market levels and win the race to own the home, in contrast to Apple’s profit-making strategy for its speaker. Echo’s main strategic benefits to Amazon are the scope for data collection and the intelligence it supports, and gatekeeping partners’ access to customers.
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  • February 4, 2019

    Sky UK Q4 2018 results: accelerating growth

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    Sky’s revenue growth under Comcast appears to have accelerated since it last reported as an independent company, largely driven by sports rights expansion in Italy, which also drove bumper subscriber growth in Q3 2018. Sky UK likely enjoyed a steadier performance, helped by accelerating high speed adoption, a price rise in April, increased international sales, and improving premium channel adoption on third-party platforms. Comcast expects continued acceleration into 2019, with profitability taking a hit from increased sports rights in Italy in H1, but this is more than compensated for by reduced English Premier League rights costs in H2.
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  • February 1, 2019

    Netflix’s local content push in the UK

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    With the UK perhaps Netflix’s most valuable market outside the US—home to a stellar production sector—the streaming service is escalating its foray into local production, opening a content hub in London and moving from co-productions to direct commissions. As UK content completely dominates UK video viewing outside of the SVODs, to expand subscription reach Netflix is endeavouring to become an alternative to the PSBs’ entertainment output; this local spend is efficient given the universality and worldwide appetite for British content. With a growing proportion of local content expenditure now coming from Netflix and other SVODs, there are ramifications for both broadcasters and producers—loss of viewing, potential market pressure, increased competition for premium content and hesitancy around their own SVOD plans—along with implications for the cultural landscape.
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  • January 31, 2019

    Grappling for green shoots at Vodafone UK

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    Vodafone’s revenue trends took another step backwards this quarter (down almost 3% on our estimates) with its strongest markets (UK and Germany) weakening unexpectedly. The reiteration of their financial guidance and commitment to cost-reduction provides some reassurance although nothing in the results provides grounds for optimism; churn is not really falling and is not correlated to convergence. With the UK mobile market delivering its strongest growth in 7 years last quarter, these results may be a precursor for a more challenging outlook with Vodafone citing pressure from business pricing and out-of-bundle limits, and the outlook for RPI-linked price increases diminishing.
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  • January 30, 2019

    Netcomm Wireless: From modems to m2m to fixed wireless and 5G

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    In the past six years, NetComm Wireless has transformed itself from internet modem manufacturer to a leading telco equipment supplier in a range of complex wireless and fixed line technologies to Tier 1 telcos across the world. With 5G just around the corner, NetComm is investing heavily to leverage its experience in fixed wireless and position itself as a leading supplier of fixed wireless technology to major telcos across the world.
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  • January 30, 2019

    TPG’s mobile announcement will shift focus to the ongoing compe [...]

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    TPGs decision to cease its mobile rollout reduces the prospects for a 4th mobile operator in Australia. The MVNO market is highly competitive in metro regions and looks set to become stronger. We expect the ACCC to turn its focus on the ongoing competitiveness of the MVNO market.
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  • Free
    January 29, 2019

    AI in Financial Services: Who wins the future of banking?

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    Financial services are ripe for AI disruption; they are data-heavy, with significant potential for automation. The question is not if, but how fast, and how profoundly, would AI reshape the competitive landscape. In Australia, the AI ecosystem is exciting, but has yet to reach critical mass.
  • January 22, 2019

    New Zealand Telco Market Outlook

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    We expect the overall retail telco market to remain flat (2018-2022 CAGR 0.0%) with mobile growth driven by a move to post-paid plans and 4G/5G to offset the structural decline in fixed voice.  Total retail revenues will reach NZ$5.4bn in 2022. With UFB deployment well on track and increasing 4G penetration, we expect a rise in competitive intensity as players look to capture share across a broader set of product offerings. Fixed voice continues its structural decline as subscribers shun the landline and migrate away from standalone fixed voice services to mobile bundles and broadband + VOIP bundles. The UFB rollout is on track to reach 80% of the population by the end of 2019 and has been recently extended by the Government to cover up to 87% of the population by 2022. The NZ Government recently announced a set of reforms including a move towards utility-style regulation, copper deregulation in areas where UFB is available, and increased oversight over quality and reliability of broadband services.
    Sector .
  • January 21, 2019

    UK advertising spend: Brexit year forecasts

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    Our central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019. The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms. In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession.
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  • January 17, 2019

    Apple and Amazon bury the hatchet

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    Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations. The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify. The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews.
  • Free
    January 16, 2019

    Disruption in Australian Super: Only skin deep?

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    Australia’s superannuation system is broadly admired. Disruptive entrants have thus far focused on user experience, ethical alignment and branding rather than fees or performance. However, regulatory change will drive significant shifts in the industry in the coming years.
  • January 15, 2019

    Six ways 5G will change the future of media and entertainment

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    The media industry has been at the receiving end of significant disruption and innovation in the past decade. With 5G around the corner, the media industry is set for another round of innovation albeit this time with the opportunity to significantly improve their content offerings and provide a more richer video experience for consumers.
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  • January 11, 2019

    Scandinavian video

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    The Scandinavian markets sit at the cutting edge of the TV industry’s evolution—a product of tech-savvy citizens, superb connectivity, and generally high incomes. Take-up of SVOD is high, yet while this has had a pronounced effect on viewing, pay-TV subscription numbers have proved surprisingly resilient. Traditionally dominant public service broadcasters are under greater financial and political pressures, with the licence fee scrapped in both Denmark and Sweden.      
    Sector , .
  • European mobile in Q4 2016
    European mobile in Q4 2016
    January 10, 2019

    UK broadband, telephony and pay TV trends Q3 2018

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    Broadband market volume growth resumed its downward trend in the September quarter after a blip in the previous quarter that was likely caused by a wholesale transfer distorting the figures. Revenue growth, however, perked up to 1.9% from 1.7% in the previous quarter, an encouraging recovery especially given that it was not primarily driven by the timing of a price increase. ARPU growth improved across all four of the major operators, countering recent trends, with a focus on higher value offerings a common theme. High speed broadband adoption accelerated in the quarter across most operators, encouraged by Openreach’s volume discount offer, although this was partially driven by keener high speed pricing. Revenue growth at Virgin Media, Sky and TalkTalk converged at around 3%, with BT Consumer lagging at -1%. However, excluding the effect of BT’s shrinking telephony-only base and smoothing the sporadic boost of its 9-monthly price rise, BT Consumer’s revenue is in the middle of the pack at 3.0%      
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  • January 9, 2019

    European mobile in Q3 2018

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    European mobile service revenue growth slipped again this quarter to -1.0% as the UK and Germany disappointed and the Southern European countries worsened. The gap in service revenue growth rates between the Southern European countries and the UK and Germany increased again to a spectacular 5.5ppts. Spain was perhaps the biggest surprise this quarter with service revenue growth deteriorating by more than 3ppts; primarily due to Vodafone who posted a dire performance on all fronts. Next quarter, a somewhat delayed improvement in trend from the annualisation of roaming tariff cuts in the UK and Germany is possible, competitive intensity in France looks set to intensify as Iliad renews its aggression in the face of slowing momentum. Although there may be some reprieve on the rate of subscriber loss in Italy, Iliad is likely to continue to impose significant ARPU pressure on all operators.
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  • December 20, 2018

    UK Auto classified marketplace

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    New car registrations will be down 6.3% (2.4m) in 2018, another year of decline from the 2016 peak of 2.7m, impacted by the soft consumer confidence in big-ticket purchases, with some spin down to used car sales. Auto Trader, despite the car industry’s downturn, has experienced only marginal pain thanks to the strategic focus on revenue diversification – principally into new cars, dealer auctions and enhanced subscription-based services for dealers. Our forecasts for media expenditure on cars in 2018 and 2019 are essentially flat. Auto Trader’s positioning offers insulation in a downturn, and we expect they will gain share in marketing spend, though not necessarily in terms of total consumer or industry expenditure.  
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  • December 19, 2018

    DAZN: lofty ambitions in OTT sports

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    With sport at the heart of the pay-TV ecosystem, dedicated online-only streaming services could emerge as a threat to leading players like Sky. The liveliest newcomer, DAZN, launched in 2016 with mostly second-tier sports. Now in seven markets and counting, it has recently made bold moves into top-flight competitions, notably in Italy, albeit as a secondary player. History has not been kind to those challenging pay-TV incumbents by selling sports unbundled—particularly in Europe, as Setanta, ESPN, beIN SPORTS and Mediaset can testify. If DAZN can stick to secondary positions in premium rights, or simply less-expensive sports, perhaps it will fare better.  
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  • December 19, 2018

    UK Recruitment classified marketplace

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    The UK’s labour market is tight, with an unemployment rate of 4.1%, the lowest since 1973. Peak vacancies and reports of skill shortages mask dull hiring plans amidst the gathering Brexit gloom, which will hit temporary hiring hard. We expect media expenditure to fall in 2018, substantially more among print publishers, spilling over into 2019 expenditure on media. The recruitment industry has benefited from the structural shift to outsourcing, and large agencies are portals in their own right, providing tools to companies to sift applicants to find the best match. Companies doing their own recruitment of professionals value listing on LinkedIn, the top UK site by visitors, and the efficiency of paying per applicant rather than for the listing. Second-placed Indeed has gained considerable momentum since being acquired by Japan’s Recruit Holdings in 2012. Indeed acquired third-placed Glassdoor in 2018, the latter having built its market position through user-generated reviews of employers. With Google serious again about Jobs, a sector (among others) it has tried to disrupt before, Monster and Jobsite are the more vulnerable to being crowded out.
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  • December 18, 2018

    UK Vertical marketplaces overview and property classified outlook

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    The UK consumer’s loss of confidence since the June 2016 referendum vote in favour of Brexit has reduced the revenues of both estate agents and auto dealers, with knock-on effects on their media spend, entrenching further the leadership positions of Rightmove and Auto Trader respectively. Only the UK’s recruitment marketplace is buoyant with a record level of vacancies, benefiting general recruitment aggregator Indeed, although deepening Brexit gloom among businesses will rapidly melt away vacancies. With internet users flocking to portals and away from print media, advertisers have followed suit with media spend on these portals to stimulate purchaser interest, although transactions are still conducted offline. Facebook and Google, which have long histories of contesting markets for local advertisers with little success, have re-entered classifieds. Facebook Marketplace is now accepting listings from estate agents and dealers, expanding from C2C to B2C in homes and cars. Google Jobs launched in the UK in July 2018 and enjoys partnerships with all the major portals other than Indeed. The sharp decline in sales and shift to lettings, sluggish price growth and pressure on estate agents’ commissions, are making marketing key to driving transactional activity in a longer sales funnel. Rightmove’s revenues are on track for a 10% increase in 2018 on the uplift in average revenue per agent (ARPA). Zoopla's market share rose with the end of OnTheMarket's 'one-other-portal' rule for shareholders upon its AIM listing in February 2018.
  • December 17, 2018

    Australia Out-of-Home Market Outlook

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    As traditional media segments face the onslaught of digital, OOH advertising stands out as the only old media medium that is seeing sustained growth. Traditionally OOH was mostly a real estate play but with digitalisation, it’s now becoming a true digital medium that synergises with other digital media i.e. acquisitions by OOH of Junkee and increasingly personalisation not just on a small scale but on a large scale. The overall OOH market has grown at a 13.8% CAGR from FY14 to FY17. We forecast it grow at a 5.4% from FY17 to FY22. With more than A$1.75bn of M&A activity in the middle of CY2018, the Australian OOH market has gone from being dominated by four major players to being ruled by a just two major players, effectively giving rise to a ‘Duopoly’.  
    Sector .
  • December 14, 2018

    Iliad running out of luck

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    Once on the winning side of strategic French telecoms price wars thanks to a struggling SFR, Iliad now looks wounded, and a possible prey, suffering from declining fixed and mobile KPIs – we expect cash flow losses of €617 million this year. Broadband, in a capex-heavy migration to higher margin fibre, may stabilise revenue with (somewhat) differentiating new ‘Freeboxes’ bundled with Netflix. Mobile (€2.3 billion burned since launch) hopes rest on on-net transition fostering profitability, but the 5G capex race looms. The new Italian mobile venture is explicitly and surprisingly behind the French legacy: it is already delivering a worse performance, and carrying much higher outlays (after 5G auctions spiralled). We believe Iliad has to revamp its model in France and consider differentiation with content to escape the discount brand trap.
    Sector .
  • December 14, 2018

    UK mobile market Q3 2018

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    UK mobile market service revenue grew by 2.4% in Q3, a level not seen since early 2011. However, this 0.6ppt improvement on the growth rate in Q2 was very disappointing in the context of an expected 2-3ppt revenue growth bolster from the annualisation of roaming tariff cuts. EE and O2 shared the top spot for growth, more than double the growth rate of H3G and far ahead of Vodafone which remains in negative territory and had only the slightest uptick this quarter. O2 is likely to be hit by its well-publicised network blackout in December, but experience from a similar problem back in 2012 suggests this will be modest and temporary, and it is otherwise performing well.
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  • December 13, 2018

    ACCC Digital Platforms Inquiry – Google and Facebook have just [...]

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    On 11th December 2018, the ACCC released its preliminary report on the Digital Platforms Inquiry, and one thing is certain – Google and Facebook won’t be happy after reading it. The draft recommendations are extensive and call for significant changes to privacy and consumer protection laws and new regulatory oversight to monitor and curb the market power exerted by Google and Facebook.
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  • December 12, 2018

    UK TV advertising and consumer health check in Q4 2018

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    Despite the consumer's confidence having been shaken since the referendum vote for Brexit in June 2016, monthly retail sales, especially online, managed to grow above the private consumption trend until this October, a turning point that could mark the start of a retail recession extending into 2019. Since mid-2016, TV advertising and retailing have lost their historical covariance, with TV advertising's recession briefly interrupted in the first half of the year due to sunny weather and the FIFA World Cup. After a flat Q3, we predict a resumption of TV advertising's decline, expected to be down 3-4% in Q4 2018 year-on-year. 2018 will be flat for total TV advertising, still better than 2017. However, the medium's weakness will persist in the first half of 2019, with hopes for a recovery only in the second half, assuming an orderly withdrawal from the EU starts in March 2019.
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  • December 11, 2018

    5G Update December 2018 – Telstra leading the race to 5G

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    Q4 2018 has been a busy time for 5G players with the government auctioning valuable spectrum bands and an update on Telstra’s progress on 5G. Australia is tracking well to have initial 5G services in 2019. This will enable strong growth in devices and mobile data consumption.
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  • December 11, 2018

    Hulu casts a spell

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    When its acquisition of 21st Century Fox closes, Disney will own 60% of Hulu. If it bought Comcast’s 30% stake (and WarnerMedia’s 10%), it could fully leverage the platform for its US direct-to-consumer strategy. Comcast’s Hulu stake has little strategic value to it. We argue it should sell to Disney in exchange for long-term supply deals for ESPN, as well as for the upcoming Disney+ and Hulu, similar to its recent pacts with Amazon Prime and Netflix. This could naturally be extended to Sky in Europe depending on whether Disney decides to launch all direct-to-consumer or sticks with pay-TV in certain markets.
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  • December 7, 2018

    Virgin Media UK Q3 2018 results: Cautiously accelerating growth

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    Virgin Media’s revenue growth accelerated in Q3, off the back of improved subscriber ARPU and triple play growth, but actual customer and broadband figures slowed in line with the weakening market. Network roll-out was still (deliberately) slow, with the rate now well below the previous year, and the company indicating that it is not expecting to accelerate, although it is still the fastest new network builder in the UK by some margin. Both the ARPU focus and slow roll-out point to a cautious approach, with the company happier to ensure its existing customers offer good yields than to seek significant market share growth at this stage, which is probably wise.
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  • December 6, 2018

    Refocus imperative at Vodafone UK

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    Vodafone’s deteriorating financial performance is as much due to an increasing margin of underperformance relative to its peers as to challenging markets such as Italy. A strategic refocus on operational performance is long overdue and seems largely sensible, save for the continued push for discount-led convergence products which are driving underperformance. Although Vodafone posted 3% organic EBITDA growth for H1 of this year and is guiding to same for the full year, we view this definition as overly flattering with true EBITDA performance flat and revenues in decline.        
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  • December 5, 2018

    TalkTalk stabilising, but strong growth evasive

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    TalkTalk had very solid Q2 and H1 results, with broadband net adds staying positive, high speed net adds accelerating, revenue growth above 3% and EBITDA rebounding back to growth. This was helped at the revenue line by a price increase in the quarter and in EBITDA terms by steep Openreach price reductions, with strong revenue growth and any EBITDA growth hard to replicate once these effects have annualised out. The company has nonetheless stabilised its subscriber base, revenue and profitability after some erratic years, with cost-cutting providing some potential for growth going forward.
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  • December 5, 2018

    Classifieds Marketing Outlook: All Segments

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    For decades, classifieds were the domain of newspapers, which offered advertisers cheap ads sorted under specific categories. The ads gave shoppers an easy way to browse various local offers, usually from private sellers. But, the jump from print to digital was inevitable and has proven itself to be quite lucrative for digital players. However, in the past few years, as the online classifieds market matures, leading digital classifieds players are attempting to diversify their revenues into new products and services. This is being driven by the need to ensure new sources of revenue growth and to drive customer acquisition and loyalty. In the real estate market, REA and Domain have introduced adjacent services such as mortgage broking and data analytics. In the recruitment market, LinkedIn and SEEK have been investing in technology companies involved in temporary hire, skill development, alternative recruitment and employee engagement.
  • December 4, 2018

    SVOD in the US and UK: A tale of three-player markets

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    There is a belief in some quarters that there is space for a myriad of large SVOD services in the UK. Like the UK, the US market is dominated by three services, but there is also evidence that there is appetite for further offerings: Netflix households tend to take a secondary SVOD service to complement Netflix’s content library, and are likely to take up a third service, and in some cases a fourth and fifth. Potential domestic UK services will struggle to compete with the resources that foreign tech giants can marshal, along with NOW TV’s steady position and top content.  
  • December 3, 2018

    O2 UK: scope for outperformance near-term, solid results thereaft [...]

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    O2 has managed to deliver a solid financial performance over the past several quarters in spite of network constraints which are now resolved. With signs that they are becoming more assertive in the market, and with continued brand strength and low churn, there is scope for that performance to hasten from here. Over the medium to long term, turnaround plans from the other MNOs could thwart outperformance by O2 but with an holistic culture of leading-edge marketing and innovation, we expect at least sustained solid results.
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  • November 30, 2018

    UK HFSS TV watershed idea should be put to bed

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    The ban on pre-9pm TV ads for HFSS (high in fat, salt or sugar) products being considered by the Government would not play a constructive or quantifiable role in reversing the UK’s rising childhood obesity rates. The ban on HFSS product ads since 2008 around children’s programming has not impeded the inexorable rise of childhood obesity. In 2010, Ofcom termed an HFSS watershed ban ‘disproportionate’ and ‘ineffective’. In 2018, a watershed ban would be even less effective. Children’s linear broadcast TV viewing is down by half since 2010, mainly to YouTube’s advantage, which benefits from light-touch HFSS regulation.
  • November 29, 2018

    Automotive Marketing Outlook 2018

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    After hitting record highs in March 2018, new car sales have recorded their seventh straight month of declining sales numbers as declining property prices and higher fuel costs are driving households to curb big-ticket purchases. Vehicle sales for October 2018 were 90,178 vehicles, down 5.3% YoY. Passenger cars declined 23.6% YoY driven in part by the preference for Sports Utility Vehicles (SUVs) which accounted for 44% of all new car sales in Australia for October 2018. While disruptors such as carsharing platforms (carnextdoor and goget) are reducing the need for car-ownership, there hasn’t been any visible impact on the automotive advertising market. We forecast Automotive Display Adex to grow at a 13.2% CAGR through to 2022 to A$891.2mn. Carsales is one of the largest players in the Australian online auto advertising market with a share of 37% in car listing volumes. Its average session duration is approximately two times that of its closest competitor, while the average number of daily unique visitors to its website is 57% higher.
  • Free
    November 28, 2018

    Telemedicine and AI Outlook in Primary Care

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    In this report, we provide a brief overview of ‘telemedicine’ including a 2035 forecast of the impact of telehealth tools, both human and artificial intelligence, in relation to ‘unreferred medical services’2 in the primary health market. This report does not assess or analyse the full potential for telemedicine which derives from other applications, such as remote surgical operations, sharing of digital health records or remote patient monitoring. These activities clearly would have significant additional benefits to the those explored in this report. The report outlines the importance of primary care in shaping Australian health and seizing ever-increasing health costs.
  • Free
    November 27, 2018

    Telemedicine in Australia

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    In this report, we provide a brief overview of ‘telemedicine’ and business models associated with provision of telemedicine services along with barriers that may slow down adoption of the online tool. Venture Insights believes that telemedicine will play an important tool in scoping the primary care in Australia- changing the way GPs deliver their services. We believe that the inefficiencies in healthcare, growing health costs and rising demand for quality care lead to a rising need for disruption: tools that can reduce costs while driving access to care.
  • November 20, 2018

    BT Q2 2018/19 results: Beating expectations, guidance still look [...]

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    BT’s Q2 results were well ahead of both its full year guidance run-rate and financial market expectations, with revenue flat and EBITDA up 3% versus guidance and consensus at -2% for both metrics. Operating metrics were more mixed, with broadband churn high and (our estimate of) net adds low, but fixed ARPU was solid, backed up by rapid adoption of BT Plus, fibre adoption re-accelerated and mobile was strong across all metrics. While part of the outperformance was likely due to H1/H2 phasing, it also reflects fairly conservative expectations and a solid operating performance, and hence full year guidance still looks very beatable, with a positive outlook beyond this.
    Sector , .
  • November 19, 2018

    Australian Mobile Telco Market Outlook

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    The Australian mobile market has been traditionally characterised as a mature market with steady growth driven by population growth and mobile broadband. However, this market is about to see strong innovation (5G) and disruption (TPG-Vodafone merger) in the next few years. We forecast the mobile market will remain the largest segment in the overall telco market with A$22.3bn in revenue by 2022. With the merger between TPG and Vodafone to form a third full service telco in the market, we expect the competitive intensity to increase with incumbents facing pricing and margin pressure from 2018-19 onwards. However, despite TPG’s aggressive initial pricing and service offering, at this stage we have been conservative in our estimates with respect to TPG-Vodafone’s impact on incumbent market shares as we expect a gradual subscriber take-up of the network over 2018-2022. The arrival of 5G and emergence of wireless access to the Internet as an alternative to fixed broadband means that the mobile market will continue to experience strong growth, with ARPUs steadying. Venture Insights believes that 5G coupled with IoT will enable the transition from a connectivity based revenue model to a services based revenue model for mobile operators.
    Sector , .
  • November 16, 2018

    UK PSB SVOD

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    The Public Service Broadcasters (PSBs) have been mulling a possible SVOD service, a decade after their ad-supported Project Kangaroo was blocked on competition grounds. Even if a reboot between the BBC and ITV were this time to be approved, we do not think Kangaroo 2 can succeed as a significant SVOD entrant in its home turf of the UK, above all because it’s too late. Other flaws in the offer are that it would be too small, non-premium, too old (archive), and too old (viewing profile), plus lacking sufficient financial resource to produce a pipeline of unique series.
  • New
    February 13, 2019

    AI in Insurance: Disruption Assured

    , ,
    Artificial intelligence (AI) has enormous potential to disrupt across the data- and process-heavy insurance value chain. The growth of AI startups and adoption of (AI) by Australian insurers began in earnest over the last two years. The approach taken so far is one of collaboration rather than direct competition between incumbents and disruptors.
  • Free
    January 29, 2019

    AI in Financial Services: Who wins the future of banking?

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    Financial services are ripe for AI disruption; they are data-heavy, with significant potential for automation. The question is not if, but how fast, and how profoundly, would AI reshape the competitive landscape. In Australia, the AI ecosystem is exciting, but has yet to reach critical mass.
  • Free
    January 16, 2019

    Disruption in Australian Super: Only skin deep?

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    Australia’s superannuation system is broadly admired. Disruptive entrants have thus far focused on user experience, ethical alignment and branding rather than fees or performance. However, regulatory change will drive significant shifts in the industry in the coming years.
  • Free
    October 30, 2018

    Neobanks – The David against banking Goliaths?

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    The banking industry has traditionally displayed inertia to major disruption and innovation. With the rise of neobanks in Europe and the UK, and the arrival of Australia’s first neobanks; Volt, Xinja and 86 400, this may be set to change as the younger generation of customers increasingly adopt more digital and customer-centric banking services.
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  • Free
    October 2, 2018

    Mobile payments – Australia moving from cashless to walletless?

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    The Australian payments ecosystem has seen considerable disruption in the last decade with new technologies, innovations and new industry players changing the way we pay. In particular, contactless payments has laid the foundation for mobile payments with consumers increasingly looking to ditch their cards and wallets in favour of digital wallets or mobile payment apps.
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  • Free
    July 6, 2018

    Westpac leads the Fintech investment charge

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    Australia’s largest banks have been very active in the fintech market. This report explores the investments that they have made and considers their contrasting approaches to those investments.
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  • Free
    April 24, 2018

    AltFi Conference 2018 – Growth with transparency

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    Venture Insights attended the annual AltFi Australasian Conference on April 15th 2018. The key takeaway from the conference was that the Fintech Industry in Australia is growing at a fast rate and the industry is optimistic about the Federal Government’s Open Banking initiative.
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  • Free
    April 17, 2018

    IoT & Cryptocurrency Mining: Cyber Security Update

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    The Internet of Things represents a significant and growing target area for cyber criminals. The growth in cryptocurrencies is focussing cyber criminals on the benefits of crypto-mining malware. Individuals, businesses and governments need to include IoT related cyber risks in their security controls and plans.
  • Free
    September 21, 2017

    The growth of Insurtech – Insurance companies should be worried

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    In terms of new global investment, Insurtech has been one of the fastest growing Fintech segments over the last eighteen months – and it is now starting to pick up pace in Australia. This report explains what Insurtech is and why it matters.
  • Free
    August 16, 2017

    Follow the Money

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    Australia’s VC market continued to advance, with over US$670m of investments made in FY17. Investments were supported by favourable economic and business conditions and record-high fundraising activities.
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  • Free
    July 14, 2017

    Lending Disruption – Fact or fiction?

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    The big four banking oligopoly have had a highly profitable run over the last five years. During this time start-ups have emerged to challenge the dominance of the banks in both consumer lending and business lending markets. Whilst the challengers are growing and gaining traction, the odds are still stacked against many of them. Will they survive and what are the likely outcomes?

  • Free
    May 25, 2017

    Disruption in Payments: Time to throw out your wallet?

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    As the usage of cash declines, we are trending towards a cashless society supported by new payment technologies.Within the next decade, cashless methods will be preferred, and have mostly positive implications for both businesses and consumers.However, cash will still be with us and being used for well over the next 20 years.

  • Free
    A$1bn at stake for fund managers from Robo-Advice disruption
    A$1bn at stake for fund managers from Robo-Advice disruption
    May 17, 2017

    A$1bn at stake for fund managers from Robo-Advice disruption

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    Robo-advice can offer a lower cost structure, similar financial results and greater transparency over traditional asset managers and is going to have a significant impact on the wealth management industry.

  • Free
    November 28, 2018

    Telemedicine and AI Outlook in Primary Care

    , ,
    In this report, we provide a brief overview of ‘telemedicine’ including a 2035 forecast of the impact of telehealth tools, both human and artificial intelligence, in relation to ‘unreferred medical services’2 in the primary health market. This report does not assess or analyse the full potential for telemedicine which derives from other applications, such as remote surgical operations, sharing of digital health records or remote patient monitoring. These activities clearly would have significant additional benefits to the those explored in this report. The report outlines the importance of primary care in shaping Australian health and seizing ever-increasing health costs.
  • Free
    November 27, 2018

    Telemedicine in Australia

    , ,
    In this report, we provide a brief overview of ‘telemedicine’ and business models associated with provision of telemedicine services along with barriers that may slow down adoption of the online tool. Venture Insights believes that telemedicine will play an important tool in scoping the primary care in Australia- changing the way GPs deliver their services. We believe that the inefficiencies in healthcare, growing health costs and rising demand for quality care lead to a rising need for disruption: tools that can reduce costs while driving access to care.
  • Free
    November 2, 2018

    AI and Genomics in Healthcare

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    Given the unsustainability of health expenditure growth rates, we explore how AI and genomics might assist Australia to achieve higher quality health services at lower costs. We provide a definition and analyse main drivers and impacts of implementing AI and genomics in medicine.    
  • Free
    February 19, 2018

    Top Australian Healthcare Tech trends to watch in 2018

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    Digital and mobile technologies are providing the foundation for many emerging healthcare innovations that are disrupting the Australian healthcare market. To keep pace with this continuous transformation, healthcare operators will need to embrace new technologies to improve health outcomes, be cost effective and provide timely care.

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  • Free
    October 11, 2017

    Game of Genomes – decoding the future of healthcare

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    Mainstream genomics is still nascent but further decline in sequencing costs will drive adoption. Unprecedented intelligence (i.e. big data) involving the genotypic and phenotypic data of individuals will completely reengineer our health system over the next decade. Genomics is a game changer that will reshape not only the clinical health system but also our personal wellness and lifestyle decisions.
  • Free
    September 6, 2017

    National Digital Health Strategy – one byte at a time

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    It’s time to move on from relying on doctors’ memories and the pulling together of fragmented information from across the health system. The National Digital Health Strategy outlines the transformation of the Australian healthcare system from a paper-based records system to a digital one that ensures the right information, at the right place and at the right time.
    $0.00
    Sector , .
  • Free
    August 10, 2017

    Disruption in Aged Care – Rise of the Silver Surfer

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    Australia is in the early stages of a ‘silver tsunami’ that will play out over the next three decades. Like its population, the aged care industry is getting long in the tooth and the convergence of an ageing population, aged care reforms, evolving business models and technological disruption is about to reshape multiple areas of the aged care ecosystem.
  • Free
    Primary Health Care Disruption and Market Outlook
    Primary Health Care Disruption and Market Outlook
    November 6, 2015

    Disruption In – Disruption is good for health

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    Our proprietary Disruption Framework has identified the Healthcare industry as vulnerable to disruption. We estimate that A$23b of A$130b (revenue) is susceptible to disruption with a proportion of this at risk with big data in eHealth, point of care testing and mHealth emerging as the key disruptive trends. We believe Telstra will lead the disruption in healthcare.

  • Free
    January 23, 2018

    Wind Farms – Adding wind to Australia’s energy sails

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    Wind energy already accounts for 30 percent of renewable generation and over 5 percent of total electricity generation in Australia. Falling development and generation costs will drive the growth of wind as an energy source into the future.
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  • Free
    November 6, 2017

    Green Hydrogen – Opportunity or hype?

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    Hydrogen as an energy carrier has long been discussed as a pathway to a greener future and although technology progress has been slow, recent developments point to tangible progress.Diversity of sources, security and flexibility within Australia’s energy system is the key to a reliable energy future; hydrogen could play an important role alongside other energy technologies.
  • Free
    October 13, 2017

    Energy Roundtable Breakfast – key findings

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    What will Australia’s energy future look like in 2030? Will it be business as usual? …… a utopian renewable energy reliant world? …… one powered by nuclear? …… or one with high technological consumption control?

  • Free
    September 13, 2017

    AEMO Report – exacerbating our issues not finding solutions

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    AEMO’s report to the Government appropriately highlights the risks to the NEM following closure of key dispatchable capacity. However, the report and the Government’s reaction adds to the hysteria rather than addressing policy that provides incentives to invest in appropriate generation assets.
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  • Free
    August 30, 2017

    ‘Charging’ ahead – Five key trends reshaping the electricit [...]

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    The traditional electricity industry is under significant pressure as rapid advances in technology are upending the electricity value chain. Disruption in electricity is no longer an ‘if’. Think when, how fast and how big. Batteries, renewables, prosumers and distributed electricity systems, electric vehicles and the Internet of Energy are the key trends leading the charge.
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  • Free
    August 4, 2017

    Residential rooftop solar set to soar

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    Solar rooftop economics are approaching a tipping point. Not only does electricity generated from residential rooftop solar households reduce greenhouse gas emissions, recent market trends indicate residential rooftop solar is the solution for households to withstand increasing electricity prices.
  • Free
    July 18, 2017

    Disruption in Electricity – an electrifying start to a sunny fu [...]

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    With the appropriate political and regulatory support and after years in the wilderness Australia now approaches a period of rapid change to the way in which it produces and consumes energy. This will mark the end of a ‘lazy’ era of burning fossil fuels and propel Australia’s energy sector toward being regarded as highly innovative with the ability to export our innovation and skills.

  • Free
    June 21, 2017

    The Finkel Review – A politically acceptable outcome for no [...]

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    The Finkel review has been released and appears to have come up with a ‘politically acceptable’ solution. However, even if all the recommendations are accepted, the future impact on the electricity market is far from certain. Human behaviour and the declining cost of renewables will have a more profound effect than the Finkel review suggests in its modelling.

  • Free
    Snowy Hydro 2.0: Good but not enough?
    Snowy Hydro 2.0: Good but not enough?
    June 21, 2017

    Snowy Hydro 2.0: Good but not enough?

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    Snowy Hydro 2.0 has been proposed by the Federal Government to alleviate the Australian Energy Crisis. Will it be the golden solution they hoped for, or should the government consider alternative investments to allow a more effective or timely solution?

  • Free
    Batteries have become the mainstream solution to the energy crisi
    Batteries have become the mainstream solution to the energy crisi
    April 19, 2017

    Batteries have become the mainstream solution to the energy crisi [...]

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    Following the blackouts in South Australia, a strong debate around the future of electricity has been sparked within both the state and national governments. We take a closer look at this debate, summarise the causes, consequences and likely outcomes, whilst discussing the impact to the wider Australian energy market.
  • Free
    February 15, 2017

    Towards Australia’s Smart Energy Future

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    As technological developments continue Smart Energy is increasingly being adopted by the government, businesses and consumers in order to address climate issues and cut energy costs. We discuss the uptake of Smart Energy within Australia including the key technologies, government incentives driving uptake and the anticipated disruption from future changes.

  • New
    February 13, 2019

    AI in Insurance: Disruption Assured

    , ,
    Artificial intelligence (AI) has enormous potential to disrupt across the data- and process-heavy insurance value chain. The growth of AI startups and adoption of (AI) by Australian insurers began in earnest over the last two years. The approach taken so far is one of collaboration rather than direct competition between incumbents and disruptors.
  • February 5, 2019

    Why does Amazon sell the Echo?

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    Smart speakers like the Amazon Echo and Google Home accelerated their prodigious rate of adoption in Q4 2018, and we expect they will soon be in 20% of UK homes. Amazon and Google price devices low to drive adoption to mass-market levels and win the race to own the home, in contrast to Apple’s profit-making strategy for its speaker. Echo’s main strategic benefits to Amazon are the scope for data collection and the intelligence it supports, and gatekeeping partners’ access to customers.
    Sector .
  • Free
    January 29, 2019

    AI in Financial Services: Who wins the future of banking?

    , ,
    Financial services are ripe for AI disruption; they are data-heavy, with significant potential for automation. The question is not if, but how fast, and how profoundly, would AI reshape the competitive landscape. In Australia, the AI ecosystem is exciting, but has yet to reach critical mass.
  • January 21, 2019

    UK advertising spend: Brexit year forecasts

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    Our central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019. The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms. In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession.
    Sector , , .
  • January 17, 2019

    Apple and Amazon bury the hatchet

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    Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations. The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify. The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews.
  • Free
    January 16, 2019

    Disruption in Australian Super: Only skin deep?

    , ,
    Australia’s superannuation system is broadly admired. Disruptive entrants have thus far focused on user experience, ethical alignment and branding rather than fees or performance. However, regulatory change will drive significant shifts in the industry in the coming years.
  • December 18, 2018

    UK Vertical marketplaces overview and property classified outlook

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    The UK consumer’s loss of confidence since the June 2016 referendum vote in favour of Brexit has reduced the revenues of both estate agents and auto dealers, with knock-on effects on their media spend, entrenching further the leadership positions of Rightmove and Auto Trader respectively. Only the UK’s recruitment marketplace is buoyant with a record level of vacancies, benefiting general recruitment aggregator Indeed, although deepening Brexit gloom among businesses will rapidly melt away vacancies. With internet users flocking to portals and away from print media, advertisers have followed suit with media spend on these portals to stimulate purchaser interest, although transactions are still conducted offline. Facebook and Google, which have long histories of contesting markets for local advertisers with little success, have re-entered classifieds. Facebook Marketplace is now accepting listings from estate agents and dealers, expanding from C2C to B2C in homes and cars. Google Jobs launched in the UK in July 2018 and enjoys partnerships with all the major portals other than Indeed. The sharp decline in sales and shift to lettings, sluggish price growth and pressure on estate agents’ commissions, are making marketing key to driving transactional activity in a longer sales funnel. Rightmove’s revenues are on track for a 10% increase in 2018 on the uplift in average revenue per agent (ARPA). Zoopla's market share rose with the end of OnTheMarket's 'one-other-portal' rule for shareholders upon its AIM listing in February 2018.
  • December 4, 2018

    SVOD in the US and UK: A tale of three-player markets

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    There is a belief in some quarters that there is space for a myriad of large SVOD services in the UK. Like the UK, the US market is dominated by three services, but there is also evidence that there is appetite for further offerings: Netflix households tend to take a secondary SVOD service to complement Netflix’s content library, and are likely to take up a third service, and in some cases a fourth and fifth. Potential domestic UK services will struggle to compete with the resources that foreign tech giants can marshal, along with NOW TV’s steady position and top content.  
  • Free
    November 28, 2018

    Telemedicine and AI Outlook in Primary Care

    , ,
    In this report, we provide a brief overview of ‘telemedicine’ including a 2035 forecast of the impact of telehealth tools, both human and artificial intelligence, in relation to ‘unreferred medical services’2 in the primary health market. This report does not assess or analyse the full potential for telemedicine which derives from other applications, such as remote surgical operations, sharing of digital health records or remote patient monitoring. These activities clearly would have significant additional benefits to the those explored in this report. The report outlines the importance of primary care in shaping Australian health and seizing ever-increasing health costs.
  • Free
    November 27, 2018

    Telemedicine in Australia

    , ,
    In this report, we provide a brief overview of ‘telemedicine’ and business models associated with provision of telemedicine services along with barriers that may slow down adoption of the online tool. Venture Insights believes that telemedicine will play an important tool in scoping the primary care in Australia- changing the way GPs deliver their services. We believe that the inefficiencies in healthcare, growing health costs and rising demand for quality care lead to a rising need for disruption: tools that can reduce costs while driving access to care.
  • November 6, 2018

    Recruitment Marketing Outlook

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    The Net Employment Outlook for 2018 for Australia has improved compared to CY2017—Employment Outlook peaked at 13% (a six-year high) in March 2018, before falling to 11% in September 2018. Unemployment rate decreased to 5.0% (a six-year low) in September 2018 from 5.5% in August 2017. Seek is the dominant player in the job boards industry, while LinkedIn is a dominant player in the Professional Networks space. While alternative job boards exist, they are unlikely to challenge Seek’s dominance at least in the Australian market. Artificial Intelligence and Machine Learning are transforming the industry by allowing recruitment companies to offer better job recommendations and data driven insights    
    Sector , .
  • November 5, 2018

    UK Radio’s evolution towards a digital future

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    ­­­­Radio faces challenges from Spotify and other online audio propositions, while the radio “dial” is challenged by smart speakers and global tech. UK radio broadcasters have risen to the occasion through innovation. New DAB stations have helped radio achieve record audiences and revenues. Combined digital listening is now over 50%, but FM remains the primary platform. The current mix of FM/AM and digital maintains radio’s relevance for the medium term. The long-term future is digital—a wide-ranging sector review is required to determine how to support digital radio’s growth and the question of a future switchover.  
  • Free
    November 2, 2018

    AI and Genomics in Healthcare

    , ,
    Given the unsustainability of health expenditure growth rates, we explore how AI and genomics might assist Australia to achieve higher quality health services at lower costs. We provide a definition and analyse main drivers and impacts of implementing AI and genomics in medicine.    
  • October 31, 2018

    US department stores, Amazon, and omnichannel fashion retail

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    Amazon is finding women’s fashion, a missing piece of its household-centric model, a tougher nut to crack than downmarket apparel. Higher-end US department stores are pushing back with an omnichannel model, emphasising long-term partnerships, a clever full-price/outlet model, and experiences which cross the online-offline divide. In apparel, Amazon and big box retailers have already triumphed over lower-tier American department stores, and even prestigious fashion brands are finding it harder and harder to refuse cooperation with the giants.
  • Free
    October 30, 2018

    Neobanks – The David against banking Goliaths?

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    The banking industry has traditionally displayed inertia to major disruption and innovation. With the rise of neobanks in Europe and the UK, and the arrival of Australia’s first neobanks; Volt, Xinja and 86 400, this may be set to change as the younger generation of customers increasingly adopt more digital and customer-centric banking services.
    $0.00
  • October 17, 2018

    Property Advertising Market Outlook

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    Even as the RBA chooses to keep interest rates stable, the Federal Government has implemented measures to cool the rising property market. This has resulted in a decline in new listings and housing sales in major cities and a decline in real estate purchases by foreign buyers. Macroeconomic indicators, such as GDP growth, household income and consumption continue to strengthen, with labour participation increasing and the unemployment rate falling to 5.4% in June as 41,200 full time jobs were created. The RBA continues to maintain the cash rate at the same level due to a below-target inflation rate and high consumer debt that makes many households’ consumption rates sensitive to the mortgage rate. Household debt recently reached 190.0% of total annualised household income. The online real estate classified market is dominated by two players, the REA Group and Domain, which together hold 98.0% of the market. Both players reported strong annual results, with about 20% revenue growth for FY18. Despite the dominance of the two players, new start-ups continue to enter the market in the hopes of grabbing a slice of the lucrative property classifieds market. However, to date, none have gained any material traction in the Australian market.
    Sector , .
  • Free
    October 13, 2018

    Venture Advisory Monthly Wrap – September 2018

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    Venture Advisory provides a review of leading Australasian telco, media and technology companies on a monthly basis. This review considers amongst other things share price performers ( best and worst performers during the month), company news flow and ASX release updates and respective valuation trading multiples. The report is designed for busy executives and investment professionals that want to get a flash update and stay on top of key news flow.  If you wish to find out more or have an deeper enquiry please feel free to contact Nigel Pugh or Sarah Houghton.
    $0.00
  • October 11, 2018

    UK Esports & broadcasters: No game for old players

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    Drawn by its rapid growth and enviably youthful audience profile, incumbent broadcasters are paying increased attention to esports and its followers. Viewership of esports on UK broadcasters’ linear channels is low, with consumption on their online platforms likely the same. The market’s fragmented nature and global audience, along with the dominance of Twitch—and to a lesser extent YouTube—makes this unlikely to change. Broadcasters’ low-cost approach has primarily benefited competition organisers and games publishers. For broadcasters to create real revenues, massive upfront investment would be needed, with the risk of failure high.
  • October 5, 2018

    Apple – Price is the object: the iPhone and its services

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    With a carefully priced, strong line-up of iPhones, Apple will consolidate its main revenue line and core user base in the near term. The latter feeds into a services business showing impressive growth, but which is also marked by missed opportunities and mounting negative consequences on the rest of the online ecosystem. For media businesses, Apple’s impact is larger than ever, inevitably leading to new kinds of friction around commercial terms, App store policies and browser features.
  • September 4, 2018

    When an Amazon TV show wins a Golden Globe, Amazon sells more sho [...]

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    Over the past two decades, Amazon has grown to become the largest ecommerce player in the world. But to think of it as just an online retailer would be underestimating its presence across multiple other services and markets. Within this, Amazon Video is fast emerging as a key pillar of Amazon’s overall business as it uses video to increase Prime memberships and improve user stickiness on the Amazon platform.

    Sector , .
  • New
    February 19, 2019

    Domain 1HFY19 update: pricing power and depth penetration save th [...]

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    On 15th February 2019, Domain reported its 1HFY19 earnings. Pricing power, depth penetration and adjacent businesses drove revenue growth in an otherwise tough housing market while weakness in print meant overall revenue growth was flat YoY.
    Sector .
  • New
    February 15, 2019

    European pay-TV: Resilient in the face of SVOD’s growth

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    Across the EU4, pay-TV is proving resilient in the face of fast growing Netflix (with Amazon trailing), confirming the catalysts of cord-cutting in the US are not present on this side of the Atlantic. Domestic SVOD has little traction so far. France's pay-TV market seems likely to see consolidation. Meanwhile, Germany's OTT sector is ebullient, with incumbents bringing an array of new or enhanced offers to market. Italy has been left with a sole major pay-TV platform—Sky—following Mediaset's withdrawal, while Spain's providers, by and large, are enjoying continued growth in subscriptions driven by converged bundles and discounts.
    Sector , .
  • New
    February 14, 2019

    UK Cairncross: platforms intervention to save news

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    The Cairncross Review has now reported on the tough question of “how to sustain production and distribution of high quality journalism in a rapidly changing technology environment”. New codes of conduct for the platforms and publishers are the Review’s key policy recommendation. In particular, the Review addresses the sustainability of public interest, including local, journalism. This news is important for democracy, but expensive to do well, not particularly popular and most sabotaged by an online ecosystem that rewards traffic over quality. This is a landmark public intervention, but implementation will be critical, even if there is no silver bullet – platforms, publishers and citizens need to rise to the challenge.
    Sector .
  • February 11, 2019

    REA Group 1HFY19 update: growth in a challenging environment

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    On 8th February 2019, REA Group reports its 1HFY19 earnings. Core Australian business continues to drive earnings and revenue growth in spite of a tough macro environment but a write-down in the Asia business impacted earnings for 1HFY19.
  • February 11, 2019

    UK TV set viewing trends: linear audiences tumble in 2018

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    2018 was another bad year for traditional TV set viewing of broadcast channels, with a 5% decline year-on-year—its steepest since 2011. The decline accelerated among most demographics, but particularly for 16-34s, down 13% YOY from their already relatively low levels of TV viewing. Unmatched use, which includes viewing to Netflix, Amazon and YouTube, continues to grow, up 16% YOY, with both linear viewing and unmatched use becoming increasingly solitary activities. While heavier linear TV viewers are accounting for a greater proportion of linear TV viewing, it is the lighter TV viewers that are accounting for a greater proportion of unmatched use. Within the broadcast ecosystem, ITV had the strongest 2018 thanks to the FIFA World Cup, more Coronation Street, and Love Island. Most other broadcasters struggled in terms of viewing share, but the maturity of the market means major shifts continue to be rare.
    Sector , .
  • February 6, 2019

    UK Retail news update for January 2019

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    The volume of retail sales (excluding fuel) rose 2.6% for the year 2018, thanks to improved consumer sentiment on the back of the Royal Wedding, FIFA World Cup and warmer weather. With no special events in 2019, the environment for retailing will be bleaker, with or without no-deal Brexit. December retail sales volumes rose 1.7% year-on-year, less than half the pace of November, as consumers shifted spend to Black Friday/Cyber Monday. We predict the trend will amplify in 2019, as consumers increasingly target their spending on discounted products, with direct implications for the timing and nature of advertising. The value of retail sales (excluding fuel) was up 4% in 2018 as a whole, masking the tale of woe on the high street. Offline sales fell 1%, while online sales boomed, growing 14% in value, a structural trend for 2019.
    Sector , .
  • February 4, 2019

    Sky UK Q4 2018 results: accelerating growth

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    Sky’s revenue growth under Comcast appears to have accelerated since it last reported as an independent company, largely driven by sports rights expansion in Italy, which also drove bumper subscriber growth in Q3 2018. Sky UK likely enjoyed a steadier performance, helped by accelerating high speed adoption, a price rise in April, increased international sales, and improving premium channel adoption on third-party platforms. Comcast expects continued acceleration into 2019, with profitability taking a hit from increased sports rights in Italy in H1, but this is more than compensated for by reduced English Premier League rights costs in H2.
    Sector , .
  • February 1, 2019

    Netflix’s local content push in the UK

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    With the UK perhaps Netflix’s most valuable market outside the US—home to a stellar production sector—the streaming service is escalating its foray into local production, opening a content hub in London and moving from co-productions to direct commissions. As UK content completely dominates UK video viewing outside of the SVODs, to expand subscription reach Netflix is endeavouring to become an alternative to the PSBs’ entertainment output; this local spend is efficient given the universality and worldwide appetite for British content. With a growing proportion of local content expenditure now coming from Netflix and other SVODs, there are ramifications for both broadcasters and producers—loss of viewing, potential market pressure, increased competition for premium content and hesitancy around their own SVOD plans—along with implications for the cultural landscape.
    Sector , .
  • January 21, 2019

    UK advertising spend: Brexit year forecasts

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    Our central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019. The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms. In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession.
    Sector , , .
  • January 17, 2019

    Apple and Amazon bury the hatchet

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    Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations. The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify. The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews.
  • January 15, 2019

    Six ways 5G will change the future of media and entertainment

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    The media industry has been at the receiving end of significant disruption and innovation in the past decade. With 5G around the corner, the media industry is set for another round of innovation albeit this time with the opportunity to significantly improve their content offerings and provide a more richer video experience for consumers.
    Sector .
  • January 11, 2019

    Scandinavian video

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    The Scandinavian markets sit at the cutting edge of the TV industry’s evolution—a product of tech-savvy citizens, superb connectivity, and generally high incomes. Take-up of SVOD is high, yet while this has had a pronounced effect on viewing, pay-TV subscription numbers have proved surprisingly resilient. Traditionally dominant public service broadcasters are under greater financial and political pressures, with the licence fee scrapped in both Denmark and Sweden.      
    Sector , .
  • European mobile in Q4 2016
    European mobile in Q4 2016
    January 10, 2019

    UK broadband, telephony and pay TV trends Q3 2018

    ,
    Broadband market volume growth resumed its downward trend in the September quarter after a blip in the previous quarter that was likely caused by a wholesale transfer distorting the figures. Revenue growth, however, perked up to 1.9% from 1.7% in the previous quarter, an encouraging recovery especially given that it was not primarily driven by the timing of a price increase. ARPU growth improved across all four of the major operators, countering recent trends, with a focus on higher value offerings a common theme. High speed broadband adoption accelerated in the quarter across most operators, encouraged by Openreach’s volume discount offer, although this was partially driven by keener high speed pricing. Revenue growth at Virgin Media, Sky and TalkTalk converged at around 3%, with BT Consumer lagging at -1%. However, excluding the effect of BT’s shrinking telephony-only base and smoothing the sporadic boost of its 9-monthly price rise, BT Consumer’s revenue is in the middle of the pack at 3.0%      
    Sector , .
  • December 20, 2018

    UK Auto classified marketplace

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    New car registrations will be down 6.3% (2.4m) in 2018, another year of decline from the 2016 peak of 2.7m, impacted by the soft consumer confidence in big-ticket purchases, with some spin down to used car sales. Auto Trader, despite the car industry’s downturn, has experienced only marginal pain thanks to the strategic focus on revenue diversification – principally into new cars, dealer auctions and enhanced subscription-based services for dealers. Our forecasts for media expenditure on cars in 2018 and 2019 are essentially flat. Auto Trader’s positioning offers insulation in a downturn, and we expect they will gain share in marketing spend, though not necessarily in terms of total consumer or industry expenditure.  
    Sector .
  • December 19, 2018

    DAZN: lofty ambitions in OTT sports

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    With sport at the heart of the pay-TV ecosystem, dedicated online-only streaming services could emerge as a threat to leading players like Sky. The liveliest newcomer, DAZN, launched in 2016 with mostly second-tier sports. Now in seven markets and counting, it has recently made bold moves into top-flight competitions, notably in Italy, albeit as a secondary player. History has not been kind to those challenging pay-TV incumbents by selling sports unbundled—particularly in Europe, as Setanta, ESPN, beIN SPORTS and Mediaset can testify. If DAZN can stick to secondary positions in premium rights, or simply less-expensive sports, perhaps it will fare better.  
    Sector , .
  • December 19, 2018

    UK Recruitment classified marketplace

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    The UK’s labour market is tight, with an unemployment rate of 4.1%, the lowest since 1973. Peak vacancies and reports of skill shortages mask dull hiring plans amidst the gathering Brexit gloom, which will hit temporary hiring hard. We expect media expenditure to fall in 2018, substantially more among print publishers, spilling over into 2019 expenditure on media. The recruitment industry has benefited from the structural shift to outsourcing, and large agencies are portals in their own right, providing tools to companies to sift applicants to find the best match. Companies doing their own recruitment of professionals value listing on LinkedIn, the top UK site by visitors, and the efficiency of paying per applicant rather than for the listing. Second-placed Indeed has gained considerable momentum since being acquired by Japan’s Recruit Holdings in 2012. Indeed acquired third-placed Glassdoor in 2018, the latter having built its market position through user-generated reviews of employers. With Google serious again about Jobs, a sector (among others) it has tried to disrupt before, Monster and Jobsite are the more vulnerable to being crowded out.
    Sector .
  • December 18, 2018

    UK Vertical marketplaces overview and property classified outlook

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    The UK consumer’s loss of confidence since the June 2016 referendum vote in favour of Brexit has reduced the revenues of both estate agents and auto dealers, with knock-on effects on their media spend, entrenching further the leadership positions of Rightmove and Auto Trader respectively. Only the UK’s recruitment marketplace is buoyant with a record level of vacancies, benefiting general recruitment aggregator Indeed, although deepening Brexit gloom among businesses will rapidly melt away vacancies. With internet users flocking to portals and away from print media, advertisers have followed suit with media spend on these portals to stimulate purchaser interest, although transactions are still conducted offline. Facebook and Google, which have long histories of contesting markets for local advertisers with little success, have re-entered classifieds. Facebook Marketplace is now accepting listings from estate agents and dealers, expanding from C2C to B2C in homes and cars. Google Jobs launched in the UK in July 2018 and enjoys partnerships with all the major portals other than Indeed. The sharp decline in sales and shift to lettings, sluggish price growth and pressure on estate agents’ commissions, are making marketing key to driving transactional activity in a longer sales funnel. Rightmove’s revenues are on track for a 10% increase in 2018 on the uplift in average revenue per agent (ARPA). Zoopla's market share rose with the end of OnTheMarket's 'one-other-portal' rule for shareholders upon its AIM listing in February 2018.
  • December 17, 2018

    Australia Out-of-Home Market Outlook

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    As traditional media segments face the onslaught of digital, OOH advertising stands out as the only old media medium that is seeing sustained growth. Traditionally OOH was mostly a real estate play but with digitalisation, it’s now becoming a true digital medium that synergises with other digital media i.e. acquisitions by OOH of Junkee and increasingly personalisation not just on a small scale but on a large scale. The overall OOH market has grown at a 13.8% CAGR from FY14 to FY17. We forecast it grow at a 5.4% from FY17 to FY22. With more than A$1.75bn of M&A activity in the middle of CY2018, the Australian OOH market has gone from being dominated by four major players to being ruled by a just two major players, effectively giving rise to a ‘Duopoly’.  
    Sector .
  • December 14, 2018

    UK mobile market Q3 2018

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    UK mobile market service revenue grew by 2.4% in Q3, a level not seen since early 2011. However, this 0.6ppt improvement on the growth rate in Q2 was very disappointing in the context of an expected 2-3ppt revenue growth bolster from the annualisation of roaming tariff cuts. EE and O2 shared the top spot for growth, more than double the growth rate of H3G and far ahead of Vodafone which remains in negative territory and had only the slightest uptick this quarter. O2 is likely to be hit by its well-publicised network blackout in December, but experience from a similar problem back in 2012 suggests this will be modest and temporary, and it is otherwise performing well.
    Sector , .
  • December 13, 2018

    ACCC Digital Platforms Inquiry – Google and Facebook have just [...]

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    On 11th December 2018, the ACCC released its preliminary report on the Digital Platforms Inquiry, and one thing is certain – Google and Facebook won’t be happy after reading it. The draft recommendations are extensive and call for significant changes to privacy and consumer protection laws and new regulatory oversight to monitor and curb the market power exerted by Google and Facebook.
    Sector .
  • New
    February 18, 2019

    Telstra and Optus – nbn pain, falling ARPUs and the fight for 5 [...]

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    On 14th February 2019 Optus and Telstra announced their latest earnings. Both revenue and earnings remained subdued as subscriber growth was offset by a slowdown in NBN migration payments, and continuing pressure on mobile ARPUs. 5G and Fixed Wireless remain key growth areas going forward.
    Sector .
  • February 12, 2019

    Wobbles ahead for TalkTalk’s fine balancing act

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    TalkTalk is delivering on its subscriber and revenue growth targets but is straining to get there. Price rises such as a £4 ‘TV access fee’ look increasingly risky. Whilst migrating to discounted high-speed helps to deliver top-line growth, margins are c. 40% lower; an unwelcome dent to already negative cashflow and stressed leverage. Both TalkTalk’s focus on revenue growth in a tight market and fibre rollout plans look increasingly unaffordable; a more modest ambition of stable revenues might allow a healthier business model to unfold.
    Sector .
  • February 7, 2019

    TPGs merger strategy must focus on potential merger undertakings [...]

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    The ACCC has extended its decision time for the proposed TPG-VHA merger and has raised preliminary concerns that it will lead to a substantial lessening of competition. TPG has announced that it has ceased the rollout of its mobile network. Our report looks at the likelihood of whether the TPG/VHA merger will be approved given the potential no-merger test options which the ACCC could consider. 
    Sector .
  • February 6, 2019

    New Zealand Mobile Market Outlook

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    The New Zealand mobile market had been traditionally characterised as an oligopoly that is dominated by the prepaid segment with high prices, lack of product differentiation and low usage. However, this market is about to see a rise in competitive intensity driven by 2degrees’ move to gain share in the lucrative postpaid and business mobile segments. We believe Vodafone NZ is most at risk and could lose approximately 3% of its subscriber market share by 2022. The emergence of utility companies offering mobile products will also increase competition and create more “sticky” consumers. We forecast the mobile market will remain the largest segment in the telco market with NZ$3.2bn revenue by 2022.
    Sector , .
  • February 4, 2019

    Sky UK Q4 2018 results: accelerating growth

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    Sky’s revenue growth under Comcast appears to have accelerated since it last reported as an independent company, largely driven by sports rights expansion in Italy, which also drove bumper subscriber growth in Q3 2018. Sky UK likely enjoyed a steadier performance, helped by accelerating high speed adoption, a price rise in April, increased international sales, and improving premium channel adoption on third-party platforms. Comcast expects continued acceleration into 2019, with profitability taking a hit from increased sports rights in Italy in H1, but this is more than compensated for by reduced English Premier League rights costs in H2.
    Sector , .
  • January 31, 2019

    Grappling for green shoots at Vodafone UK

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    Vodafone’s revenue trends took another step backwards this quarter (down almost 3% on our estimates) with its strongest markets (UK and Germany) weakening unexpectedly. The reiteration of their financial guidance and commitment to cost-reduction provides some reassurance although nothing in the results provides grounds for optimism; churn is not really falling and is not correlated to convergence. With the UK mobile market delivering its strongest growth in 7 years last quarter, these results may be a precursor for a more challenging outlook with Vodafone citing pressure from business pricing and out-of-bundle limits, and the outlook for RPI-linked price increases diminishing.
    Sector .
  • January 30, 2019

    Netcomm Wireless: From modems to m2m to fixed wireless and 5G

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    In the past six years, NetComm Wireless has transformed itself from internet modem manufacturer to a leading telco equipment supplier in a range of complex wireless and fixed line technologies to Tier 1 telcos across the world. With 5G just around the corner, NetComm is investing heavily to leverage its experience in fixed wireless and position itself as a leading supplier of fixed wireless technology to major telcos across the world.
    Sector .
  • January 30, 2019

    TPG’s mobile announcement will shift focus to the ongoing compe [...]

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    TPGs decision to cease its mobile rollout reduces the prospects for a 4th mobile operator in Australia. The MVNO market is highly competitive in metro regions and looks set to become stronger. We expect the ACCC to turn its focus on the ongoing competitiveness of the MVNO market.
    Sector .
  • January 22, 2019

    New Zealand Telco Market Outlook

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    We expect the overall retail telco market to remain flat (2018-2022 CAGR 0.0%) with mobile growth driven by a move to post-paid plans and 4G/5G to offset the structural decline in fixed voice.  Total retail revenues will reach NZ$5.4bn in 2022. With UFB deployment well on track and increasing 4G penetration, we expect a rise in competitive intensity as players look to capture share across a broader set of product offerings. Fixed voice continues its structural decline as subscribers shun the landline and migrate away from standalone fixed voice services to mobile bundles and broadband + VOIP bundles. The UFB rollout is on track to reach 80% of the population by the end of 2019 and has been recently extended by the Government to cover up to 87% of the population by 2022. The NZ Government recently announced a set of reforms including a move towards utility-style regulation, copper deregulation in areas where UFB is available, and increased oversight over quality and reliability of broadband services.
    Sector .
  • European mobile in Q4 2016
    European mobile in Q4 2016
    January 10, 2019

    UK broadband, telephony and pay TV trends Q3 2018

    ,
    Broadband market volume growth resumed its downward trend in the September quarter after a blip in the previous quarter that was likely caused by a wholesale transfer distorting the figures. Revenue growth, however, perked up to 1.9% from 1.7% in the previous quarter, an encouraging recovery especially given that it was not primarily driven by the timing of a price increase. ARPU growth improved across all four of the major operators, countering recent trends, with a focus on higher value offerings a common theme. High speed broadband adoption accelerated in the quarter across most operators, encouraged by Openreach’s volume discount offer, although this was partially driven by keener high speed pricing. Revenue growth at Virgin Media, Sky and TalkTalk converged at around 3%, with BT Consumer lagging at -1%. However, excluding the effect of BT’s shrinking telephony-only base and smoothing the sporadic boost of its 9-monthly price rise, BT Consumer’s revenue is in the middle of the pack at 3.0%      
    Sector , .
  • January 9, 2019

    European mobile in Q3 2018

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    European mobile service revenue growth slipped again this quarter to -1.0% as the UK and Germany disappointed and the Southern European countries worsened. The gap in service revenue growth rates between the Southern European countries and the UK and Germany increased again to a spectacular 5.5ppts. Spain was perhaps the biggest surprise this quarter with service revenue growth deteriorating by more than 3ppts; primarily due to Vodafone who posted a dire performance on all fronts. Next quarter, a somewhat delayed improvement in trend from the annualisation of roaming tariff cuts in the UK and Germany is possible, competitive intensity in France looks set to intensify as Iliad renews its aggression in the face of slowing momentum. Although there may be some reprieve on the rate of subscriber loss in Italy, Iliad is likely to continue to impose significant ARPU pressure on all operators.
    Sector , .
  • December 19, 2018

    DAZN: lofty ambitions in OTT sports

    ,
    With sport at the heart of the pay-TV ecosystem, dedicated online-only streaming services could emerge as a threat to leading players like Sky. The liveliest newcomer, DAZN, launched in 2016 with mostly second-tier sports. Now in seven markets and counting, it has recently made bold moves into top-flight competitions, notably in Italy, albeit as a secondary player. History has not been kind to those challenging pay-TV incumbents by selling sports unbundled—particularly in Europe, as Setanta, ESPN, beIN SPORTS and Mediaset can testify. If DAZN can stick to secondary positions in premium rights, or simply less-expensive sports, perhaps it will fare better.  
    Sector , .
  • December 14, 2018

    Iliad running out of luck

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    Once on the winning side of strategic French telecoms price wars thanks to a struggling SFR, Iliad now looks wounded, and a possible prey, suffering from declining fixed and mobile KPIs – we expect cash flow losses of €617 million this year. Broadband, in a capex-heavy migration to higher margin fibre, may stabilise revenue with (somewhat) differentiating new ‘Freeboxes’ bundled with Netflix. Mobile (€2.3 billion burned since launch) hopes rest on on-net transition fostering profitability, but the 5G capex race looms. The new Italian mobile venture is explicitly and surprisingly behind the French legacy: it is already delivering a worse performance, and carrying much higher outlays (after 5G auctions spiralled). We believe Iliad has to revamp its model in France and consider differentiation with content to escape the discount brand trap.
    Sector .
  • December 14, 2018

    UK mobile market Q3 2018

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    UK mobile market service revenue grew by 2.4% in Q3, a level not seen since early 2011. However, this 0.6ppt improvement on the growth rate in Q2 was very disappointing in the context of an expected 2-3ppt revenue growth bolster from the annualisation of roaming tariff cuts. EE and O2 shared the top spot for growth, more than double the growth rate of H3G and far ahead of Vodafone which remains in negative territory and had only the slightest uptick this quarter. O2 is likely to be hit by its well-publicised network blackout in December, but experience from a similar problem back in 2012 suggests this will be modest and temporary, and it is otherwise performing well.
    Sector , .
  • December 11, 2018

    5G Update December 2018 – Telstra leading the race to 5G

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    Q4 2018 has been a busy time for 5G players with the government auctioning valuable spectrum bands and an update on Telstra’s progress on 5G. Australia is tracking well to have initial 5G services in 2019. This will enable strong growth in devices and mobile data consumption.
    Sector , .
  • December 7, 2018

    Virgin Media UK Q3 2018 results: Cautiously accelerating growth

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    Virgin Media’s revenue growth accelerated in Q3, off the back of improved subscriber ARPU and triple play growth, but actual customer and broadband figures slowed in line with the weakening market. Network roll-out was still (deliberately) slow, with the rate now well below the previous year, and the company indicating that it is not expecting to accelerate, although it is still the fastest new network builder in the UK by some margin. Both the ARPU focus and slow roll-out point to a cautious approach, with the company happier to ensure its existing customers offer good yields than to seek significant market share growth at this stage, which is probably wise.
    Sector , .
  • December 6, 2018

    Refocus imperative at Vodafone UK

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    Vodafone’s deteriorating financial performance is as much due to an increasing margin of underperformance relative to its peers as to challenging markets such as Italy. A strategic refocus on operational performance is long overdue and seems largely sensible, save for the continued push for discount-led convergence products which are driving underperformance. Although Vodafone posted 3% organic EBITDA growth for H1 of this year and is guiding to same for the full year, we view this definition as overly flattering with true EBITDA performance flat and revenues in decline.        
    Sector , .
  • December 5, 2018

    TalkTalk stabilising, but strong growth evasive

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    TalkTalk had very solid Q2 and H1 results, with broadband net adds staying positive, high speed net adds accelerating, revenue growth above 3% and EBITDA rebounding back to growth. This was helped at the revenue line by a price increase in the quarter and in EBITDA terms by steep Openreach price reductions, with strong revenue growth and any EBITDA growth hard to replicate once these effects have annualised out. The company has nonetheless stabilised its subscriber base, revenue and profitability after some erratic years, with cost-cutting providing some potential for growth going forward.
    Sector , .
  • December 3, 2018

    O2 UK: scope for outperformance near-term, solid results thereaft [...]

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    O2 has managed to deliver a solid financial performance over the past several quarters in spite of network constraints which are now resolved. With signs that they are becoming more assertive in the market, and with continued brand strength and low churn, there is scope for that performance to hasten from here. Over the medium to long term, turnaround plans from the other MNOs could thwart outperformance by O2 but with an holistic culture of leading-edge marketing and innovation, we expect at least sustained solid results.
    Sector , .
  • November 30, 2018

    UK HFSS TV watershed idea should be put to bed

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    The ban on pre-9pm TV ads for HFSS (high in fat, salt or sugar) products being considered by the Government would not play a constructive or quantifiable role in reversing the UK’s rising childhood obesity rates. The ban on HFSS product ads since 2008 around children’s programming has not impeded the inexorable rise of childhood obesity. In 2010, Ofcom termed an HFSS watershed ban ‘disproportionate’ and ‘ineffective’. In 2018, a watershed ban would be even less effective. Children’s linear broadcast TV viewing is down by half since 2010, mainly to YouTube’s advantage, which benefits from light-touch HFSS regulation.