CHART OF THE WEEK

TikTok is increasing monetisation efforts of its massive global userbase

NBN continues its push into Business Broadband

As per our earlier newsletters, there has been ongoing resistance by several RSPs regarding NBNs push into the fibre business broadband market – based on three main concerns (i) potential loss of Enterprise revenue, (2) overbuild of existing fibre assets and (3) NBN directly dealing with business customers. Whilst the first concern is high for Telstra Enterprise, other RSPs such as Vocus and Optus see this as an opportunity to win greater market share in the Enterprise space. Our view has been that whilst this is true, it also enables a wider range of SD-WAN focussed entrants into the Enterprise market which is a positive outcome for competition in the business market.  On the second concern, in October 2019 we highlighted the option for RSPs and NBN to consider hybrid multi-site customer models where NBN leases fibre already in place and on Tuesday 28 Jan, NBN released an industry consultation paper looking at options for establishing an industry-wide procurement process to make use of dark fibre assets. Just two days later, NBN addressed the third concern by announcing that it has changed its enterprise contracting model so that in all cases RSPs will have the direct contractual relationship. It’s clear that the RSP landscape for business and enterprise customers is set to change and we think this will also involve the entry of business focussed MVNOs over time.

Top 5 Media Trends in 2020

SVOD revenue and pcp growth (A$m, %), January 2020

2020 will be a defining year for the media industry, setting the tone for the coming decade. SVOD platforms will see increasing competition, and only those that can continuously leverage their content to draw and retain viewers will survive the wars. More locally, the push towards Total TV will see BVOD play a greater role for FTA TV advertising strategies. However, while Total TV is promised to deliver the cross-platform mass marketing product for advertisers, it will also bring into question the viability and value of Australian BVOD if it were to fail. On the social media front, more eyes are shifting towards ephemeral media, such as Instagram Stories, Snapchat Stories, and TikTok. In parallel, brands are moving their marketing dollars to these more engaging mediums to interact with their customers directly. For a more detailed look at how these trends will impact the media landscape, click through to read our report.

Launch of NBC’s Peacock streaming service

Maximum advertising loads by platform, per hour (min)

Comcast’s new, on-demand service, launching in April, is an attempt to break NBCU’s unsustainable dependence on sales to Netflix and other SVODs. Peacock provides a path of digital transition for advertising-funded TV with a revamped low-load, high cost-per-thousand model. Reach will be built with a free online tier and distribution to Comcast subscribers. Peacock seeks carriage from other pay-TV operators, with which reciprocal deals would make sense (i.e. HBO Max on Comcast alongside Peacock on AT&T’s platforms). In Europe, where Comcast has no existing major free-TV offering to transition, launching Peacock will be challenging but could present Sky with ideas to counterweigh Netflix on its own service. For a more detailed look at the analysis of the future of ad-supported TV brands, click through to read the report from our UK research partner, Ender Analysis.

Global Insurtech Trends

Investment in insurtech startups, 2012-18

The insurance industry is experiencing the technological disruption that has impacted every consumer-facing industry in the last two decades, from finance to TMT; the front-end is evolving towards omnichannel, personalised plug-and-play products, while back-end competitiveness is increasingly driven by companies’ ability to leverage automation, Big Data and analytics. Global insurtech revenue projections range widely, with projected 2023 revenues ranging from ~$1.1 billion to $22.4 billion; however, this still represents a negligible portion – 0.02%-0.4% – of the overall insurance industry. A key trend in the new wave of insurtech is towards collaboration between incumbents and insurtech startups instead of disruption; between 2012 and 2018, 83% of global insurtech investment deals involved an insurer or reinsurer as an investor. For a more detailed look at how the wave of insurtech innovation is playing out on a global level and profiles key global insurtech players, click through to read our report.

UK property market: Classified market innovations

UK House prices, year-on-year growth and prices (%, £)

Expenditure on UK classifieds peaked in 2004, but has since declined more than 50% to £1.7 billion in 2018. In every vertical, the print to digital transition of expenditure has favoured a first mover, leading to dominant positions that challengers find hard to disrupt. The property market was stagnant in 2019, with stable house price growth but low transaction volumes as Brexit uncertainty held back sales. An expected cut in interest rates this year should contribute to a slight rise in transaction volumes. The low tide of transactions has cemented the reign of Rightmove and condemned challengers to low traction. No. 2 player, Zoopla, plans for a major drive in 2020 after a 1.5-year investment spree by parent private equity firm Silver Lake Partners. For a more detailed look at the analysis on the classified verticals of property, autos and jobs, click through to read the report from our UK research partner, Ender Analysis.