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  • New
    May 28, 2018

    Strategically challenged: Vodafone Q4 2017/18 results

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    The major change in trend evidenced in Vodafone’s Q4 results was a decline in mobile service revenue growth in Germany by 2ppts on the December quarter, in spite of record contract net adds and improving growth trends from its competitors. At least part of this deterioration is likely due to its strategic focus on converged products; we estimate discounts of around one third and question the rationale for this initiative, particularly given the admission that this is distracting from the core mobile business. Vodafone’s guidance for 1-5% group EBITDA growth next year reflects the challenging outlook and uncertainty in southern European markets, a more positive view on the UK, with Vodafone’s German strategy a major swing factor.          
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  • New
    May 25, 2018

    Retailing in the material world

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    Ecommerce has grown to 17.5% of retail spend, and accounts for almost all growth in spend. Physical retailers are beginning to feel the effects, with chains reporting falling profits and even bringing in administrators. The UK picture is muddied by a general lack of economic recovery, and irrelevant comparisons with the US. Finished goods stores, however, are clearly under extreme pressure. We are moving into a retail paradigm of online and offline elements being freely matched. To survive this transition, brick and mortar retailers have to become differentiated experiences and close the data gap with e-retailers      
  • New
    May 24, 2018

    European video-on-demand: Playing catch-up to the UK

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    The UK continues to lead the EU5 in take-up and consumption of video-on-demand services, with close cultural alignment and a historic williness to pay for TV content making it a receptive home for US SVODs. Netflix dominates in most markets, benefiting from high-profile US imports and big-budget local productions. Local SVODs are struggling, with those operated by FTA broadcasters facing considerable challenges. Collaboration between local broadcasters and pay-TV platforms is essential if they are to hold at bay the threat of Netflix and co., with an increasingly favourable regulatory environment opening the door for unprecedented collaboration.      
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  • New
    May 23, 2018

    BT Q4 2017/18 results: Slowing broadband bites, but recovery pos [...]

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    BT Group met expectations for the 2017/18 financial year, but future guidance is very modest compared to previous performance and financial market expectations, with 2018/19 revenue and EBITDA both guided to decline by around 2% with capex rising. In our view, this weakened outlook is primarily driven by the ongoing slowdown and increasing competitiveness of the UK broadband market, with operating metrics at BT Consumer particularly weak. BT’s re-vamped strategy looks good in parts, and could deliver the incremental improvements necessary to outperform the new (much more modest) expectations, helped by existing – and likely continued – strength in mobile.
  • New
    May 22, 2018

    Blockchain in Telecom – moving from concept to reality…

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    In the past decade, Telcos have had to deal with a number of disruptive technologies. The pace of change is set to continue as Telcos transition towards a 5G and IoT enabled ecosystem. As Telcos seek new revenue opportunities and a way to streamline operations, Blockchain is rapidly evolving to become one of the most promising emerging innovations for telecoms today.
  • May 21, 2018

    Virgin Media Q1 2018 results: Good, but beware headlines

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    The highlight of Virgin Media’s Q1 results was the return to growth for its UK cable ARPU (+1.3%), although the improvement in trend should be interpreted with caution due to accounting changes. Headline group revenue growth of 5.2% was boosted by profit-neutral handset sales, with underlying growth of around 3.2% – still strong in the sector context. Virgin Media continues to do relatively well in the increasingly challenging UK broadband market, but with evidence of limited pricing power, sluggish roll-out and subscriber growth, revenue trends look set to slow.    
  • May 18, 2018

    Vodafone/Liberty Global deal: Slim economics and regulatory risk

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    Vodafone’s acquisition of Liberty's assets in Germany and Central Europe is likely to face regulatory scrutiny at the EU – and possibly also German – level. We view Vodafone’s expectation of closure in mid-2019 with no remedies as unlikely. The economics of the deal for Vodafone are slim, highly reliant on extracting sizeable synergies, and vulnerable to operational risk and potential remedies for regulatory approval, particularly in Germany. While we see some synergy benefit from combining two cable assets in Germany, we are unconvinced of meaningful benefits from combined fixed/mobile offerings.          
  • Spotify’s freemium model gains traction
    Spotify’s freemium model gains traction
    May 17, 2018

    Wall St Shuffle: Spotify’s non-IPO

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    Spotify is now the world’s first publicly listed on-demand music streaming service. Its global footprint generated €4 billion in 2017 from over 70 million paying subscribers and 90 million ad-funded users across 65 countries. As it expands, the service is steadily but surely moving ever closer to profitability, with a 2019 operating profit a very real prospect. So far and for the near future, Spotify’s global pre-eminence versus competition from Apple, Amazon and Google proves remarkably resilient. Plans to build upon its differentiating features will become ever more decisive as the tech titans will continue to wield their resources and ecosystems against the comparatively undiversified company.      
  • May 16, 2018

    SXSW 2018 – Visions of the future: Blockchain, AI and Colonies [...]

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    Venture Insights attended this year’s South by South West (SXSW), Austin’s annual technology conference.This report highlights 7 key trends from the event, including: the impact of Blockchain, whether we should trust AI, how ethics apply to platforms, the battle for your voice and whether we will be on Mars by 2019!
  • May 15, 2018

    Covert growth in UK mobile

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    The UK mobile market is growing strongly – we estimate revenues by 5% and EBITDA by 8% in 2017 – excluding one-off regulatory drags and the loss of non-profit-generating handset revenue. Regulatory price cuts end in mid-2018, and the handset effect will disappear from all reported figures from April 2018, leaving scope for very positive headline growth next year – considerably better than its European comparators and the sluggish UK fixed market. The outlook for the UK mobile industry is the best it has been in a decade, with significant growth in data demand, price increases, some supply constraints, rational competition, and major regulatory drags rapidly fading.          
  • May 14, 2018

    Video viewing forecasts to 2027: continued divergence by age grou [...]

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    Our latest forecasts predict traditional broadcasters will account for 72% of all video viewing in 2027, down from an estimated 82% in 2017, reflecting the continuing adoption of online video services across all UK age groups. Additional viewing of online short-form content such as YouTube will keep pushing overall volumes higher, with SVOD services serving more as a substitution for linear TV. The extent will be greater among younger age groups, for whom the shift has already been significant. We predict that in 10 years just 42% of 16-34s’ total viewing will be to conventional broadcasters versus 91% for the over-55s.      
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  • Free
    May 10, 2018

    TPG mobile launch plans – there’s going to be data on the str [...]

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    With an increasingly commoditised fixed market, the Australian mobile market is under attack as both margins and market share are under pressure. TPG is set to launch its mobile network with rock bottom introductory pricing for mobile data.
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  • May 10, 2018

    NBN update: more fibre + better pricing will lead to higher speed [...]

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    The NBN has made significant progress on improving speed uptake on its network in the past six months driven by the pricing changes announced in November 2017. However, customer complaints that continue to rise as the rollout progresses and an increasing threat from fixed wireless substitutes continue to weigh on the future of the NBN.
  • European mobile in Q4 2016
    European mobile in Q4 2016
    May 9, 2018

    European privacy: New Wave in the Old World

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    For much of the online media industry, GDPR compliance has stalled at basic data audits and box ticking, as firms wait for the rest of the privacy regime to emerge. But weighing technicalities of legitimate interest and consent misses the point: transparent consumer value will be the only sustainable basis for processing personal data. The scrutiny of Google and Facebook privacy practices involves an added antitrust dimension, potentially leading to processing limits as remedies.  
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  • May 8, 2018

    Trinity Mirror and Northern & Shell raise regulatory hackles

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    The Competition and Markets Authority (CMA) halted the merger of the publishing assets of Trinity Mirror and Northern & Shell, and is inquiring into the merger’s likely impact on competition in the national newspaper market. The CMA will take into account efficiencies of £20 million in newsrooms, printing and advertising sales, which if realised could help sustain national news provision in a failing print market transitioning to digital services. Secretary of State (SoS) Matt Hancock has issued a Public Interest Intervention Notice (PIIN) citing newspaper public interest (PI) grounds, on concerns the TM/N&S merger may be contrary to the public interest
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  • May 7, 2018

    Blockchain: Reinventing the wheel

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    Despite the hype, systems based on the technology underlying bitcoin are a poor match for most use-cases. The term 'blockchain' is nowadays applied to technologies with shared aims and ideals rather than technological unity; few – if any – of these aims require true blockchain, any many are double-edged swords. The promises of blockchain are seductive in the context of programmatic online advertising, but are over-sold.
  • May 3, 2018

    Grand new ideas for the content industry: Lessons from GDC 2018

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    Last month’s Game Developer’s Conference in San Francisco was a triumphant showcase for crossover technologies and ideas designed to attract and engage new customers; ideas coming soon to all parts of the digital entertainment industry. Google and Facebook launched new “Instant App” technologies for game developers on their platforms, which will eventually have a significant impact on mobile app curation and discovery for not just games but the broader entertainment sector. Universal Pictures showed how media and entertainment companies should be working with indie developers to drive franchise development, utilise creative IP, and bring new ideas to market quicker.
  • May 2, 2018

    Small Cells Part 1: Leveraging Public Infrastructure

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    Recent public infrastructure deals have demonstrated the joint benefits of combining smart city rollouts with mobile networks. Venture expects more infrastructure deals to be completed as governments recognise the clear public policy benefits and Telcos roll out 5G networks faster.
  • May 1, 2018

    Sky Q3 2017/18 results: ever more attractive

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    Sky posted yet another set of solid results, with revenues up 5% and operating profits up 10%, despite weakening operating metrics in Germany & Austria. Deals with Netflix and Spotify will enhance the customer experience, signalling Sky's confidence in its platform, perhaps a sign of further deals to come. A successful outcome from February’s Premier League auction sealed the prospect of a takeover battle for Sky, with Comcast launching its formal bid this week.
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  • April 27, 2018

    Brexit Update: Domestic Issues

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    Despite apparent instability of the political climate in Westminster, the direction of travel is predictable as both main parties share the aim of Brexit. The big fight in Parliament is over the future trade policy of the UK. Officially, the UK wants to agree a Free Trade Area (FTA) with the EU, while the Labour Party and Tory rebels hope a Customs Union (CU) prevails, binding the UK to the EU’s trade policy. The Supreme Court is about to hear the UK Government’s challenge to legislation passed by the devolved nations of Scotland and Wales, which claim their consent is required for policies on agriculture, fisheries and the environment.
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  • April 26, 2018

    The Influence of Bots on Fake News

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    Fake accounts could represent up to 15% of a digital platform’s total accounts and generate a high proportion of activity. Whilst, digital platform providers are taking some steps to prevent fake bot accounts, it is likely that Governments will set regulation to ensure providers formalise monitoring, blocking and labelling processes.
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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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  • April 19, 2018

    Fox offers sale of Sky News to clear merger

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    The Competition and Markets Authority (CMA) will report on the public interest (PI) aspects of the Fox/Sky merger on 1 May to Secretary of State (SoS) Matt Hancock, who will announce his decision on 13 June to the Commons. Fox has offered to sell Sky News to Disney, which will prevent the Murdoch family from ever exercising control or influence and might appease opponents of the merger. The CMA is likely to advise the SoS to clear the merger, conditional on the Sky News sale to Disney, which the SoS could accept. Fox will then participate in the end-game for Sky, where Comcast is also a determined bidder.
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  • April 18, 2018

    Sky’s Italian strategic breakthrough

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    After losing money for 13 years fighting Sky, Mediaset has given up. The two have agreed to wholesale channels to each other, and Sky gained the option to take over the infrastructure of terrestrial pay platform Mediaset Premium, in a deal designed to pass antitrust muster. The main strategic upside for Sky resides in eventual access to content from Italian FTA channels, allowing it to become the country’s ‘universal’ platform. Meanwhile, Mediaset may find it easier to resolve its dispute with France’s Vivendi now that the broadcaster has got rid of its main cash drain. Sky remains the only major potential buyer of the 2018-21 Serie A rights, to be sold on 21 April. However, due to the league’s unrealistic expectations and the faulty platform-based auction design, the auction may be aborted for a third time, raising the risk that heavily indebted clubs resort to short-term fixes.
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