NZ telco market outlook\ Nine 1H20 update\ Virgin Media UK\ UK creative economy from the BBC\ Optus sport


 



Welcome to the Venture Insights newsletter!
In this week’s edition, we look at the telco market outlook in New Zealand, Nine 1H20 update, the performance of Virgin Media in the UK, how the BBC brings benefits to the British broadcasting landscape and the wider creative economy and Optus sport secures more content. 

CHART OF THE WEEK

BVOD revenues for FTA operators in Australia (A$m)



Source: Venture Insights, ThinkTV

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New Zealand Telco Market Outlook

Retail telco market revenue growth rates by segment



Source: Venture Insights

The NZ telco market has seen a flurry of activity in the last four years with the sale of 700MHz spectrum for 4G, increasing fixed broadband speeds, the launch of multiple SVOD services, the rise of bundled mobile plans and the launch of 5G. There has also been structural change with some industry consolidation and the sale of Vodafone to a consortium of Infratil and Brookfield Asset Management. We believe growth in the NZ telco market will be driven by mobile and fixed broadband while fixed voice will continue its structural decline. We expect the overall retail telco market to remain almost flat (2019-2023 CAGR 0.4%) 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$5.5bn in 2023. For a more detailed look at the telco market in New Zealand, click through to read our report.

Click to read report

Nine 1H20 update

Nine’s FTA highlights



Source: NINE 1HFY20 EARNINGS UPDATE AND PRESENTATION

On 26th February 2020, Nine reported its 1HFY20 earnings. The soft state of overall market in both advertising and property, and the costs associated with Cricket World Cup and UK Ashes, saw revenue fall and expenses rise in the FTA business. The advertising market is undergoing a significant structural change. The total Australian ad market declined by 8.5%, and the metro FTA market declined by 7.0%. Overall, with a challenging environment for the core FTA business, traditional broadcasters must focus on improving audience share, driving new audience growth through digital content offerings and taking costs out of the business. For a more detailed look at the performance of Nine and some of the key trends across both businesses, click through to read our report.

Click to read report

Virgin Media UK: Pain before gain

UK cable revenue growth and group OCF growth



Source: Enders Analysis, company reports

Virgin Media’s subscriber base fell again in Q4, although strong ARPU growth allowed a slight acceleration in cable revenue growth to 1.8%, and a deceleration in OCF decline to 1%. Liberty Global group OCF guidance of mid-single digit decline in 2020 is likely to be mirrored at Virgin Media, as regulatory pressure and market competitiveness continue to bite, and mass-market demand for ultrafast broadband remains nascent. We continue to believe that the best way for Virgin Media to capitalise on full fibre rollouts is to use a wholesale deal with Openreach to expand its footprint to (eventually) nationwide. For a more detailed look at the performance of Virgin Media in the UK, click through to read a report from our UK research partner, Enders Analysis.

Click to read report

Greater UK creative economy from the BBC

BBC Studios’ production revenues 2017/18 to 2019/20 (£m)



Source: NATIONAL AUDIT OFFICE, BBC

The BBC is a monolith within the broadcasting landscape and the greater UK creative economy. Instructed by its Charter, it is a guaranteed leader of investment in local and quality content, tech, regionality, and diversity. The sector’s balance results in skills, intellectual property and talent naturally flowing from the Corporation to private companies, incentivising ambition and success while allowing the wider environment to flourish. Those that would fill its void offer few of these guaranteed benefits. The efficacy by which the BBC achieves its required objectives is and should be open to questioning and review, however it nevertheless stands as a major and essential contributor to the creative sector, one of Britain’s greatest achievements. For a more detailed look at how the BBC brings benefits to the British broadcasting landscape and the wider creative economy, click through to read a report from our UK research partner, Enders Analysis.

Click to read report

Optus sport secures more content

Australian big 4 sports rights cost over time



Source: VENTURE INSIGHTS, MEDIA ANNOUNCEMENTS

Optus Sport, with an active subscribing base of over 825,000, continues to grow and attract new content. Recent rights acquisitions including the FA Women’s Super League, the J.League, and this week the Australian media rights for the CONMEBOL Copa America 2020 tournament, which will feature the Socceroos. We have highlighted the trend for Telcos are to invest in content to support their media ambitions.  For further details click through to our report on sports rights in Australia.

Click to read report

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