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  • New
    December 13, 2019

    UK broadband, telephony and pay TV trends Q3 2019: Darkest before [...]

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    Market revenue growth fell in Q3 to below 1%, and may drop below zero next quarter as existing customer pricing comes under more pressure. New customer pricing is however rising, and average pricing should rise much further as ultrafast increases in availability and popularity. Political enthusiasm for full fibre should be welcomed, although some specific plans are likely to do more harm than good if implemented literally
    Sector .
  • New
    December 12, 2019

    Australia fixed broadband pricing trends – price differentials [...]

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    Broadband services are critical enablers for access to information, employment, markets and key services. Consumer demand for broadband services has grown rapidly in the last decade with household penetration increasing to 85% in 2017 compared to 64% in 2009. This report analyses the competitive environment in the fixed broadband market and focuses on consumer price trends in the fixed broadband market for the NBN. In particular, we analyse the major RSPs – Telstra, Optus, TPG and Aussie Broadband to evaluate their broadband offerings in the retail market.

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  • New
    December 11, 2019

    UK mobile market Q3 2019: Weathering the storm

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    The UK mobile market suffered its worst performance in six years this quarter as competition heated up and regulation continued to bite. Vodafone’s unlimited tariffs have proven popular, reaching 5% of its contract base in one quarter, helping to drive its outperformance. Some reprieve is in prospect next quarter, before the impact of out-of-contract notifications and automatic discounts from February, although there is the possibility of pre-emptive moves bringing some of the effects forward
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  • New
    December 10, 2019

    Pressure on Facebook over political advertising

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    With elections in the UK in December, and in the US in 2020, online political advertising is receiving intense scrutiny. Google has announced limits on targeting, while Twitter has banned politicians from buying ads. Facebook is the big player in online political ads, and it continues to allow targeted political ads, and to carve them out as exempt from fact-checking. Facebook wants to keep Republicans on side and surf the revenue opportunity, but pressure will increase with US elections, and we expect Facebook to bring in restrictions.
  • New
    December 9, 2019

    Prime Video Channels: part of Amazon UK’s bigger picture

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    Amazon Channels’ aggregation of third-party streaming services enhances the consumer appeal of its wider video proposition, provides incremental revenues and increases the stickiness of the Prime shopping service. Content partners range from major players (e.g. Discovery and ITV) to the more niche (e.g. MUBI and Tastemade), who all benefit from a ready-made platform, billing relationships and a receptive subscriber base. But the revenue shares, data costs and lack of direct customer relationships remain too high a price for some. Two and a half years on from its UK launch, opportunities for live, ad-supported and bundled content are diversifying the platform, but Amazon must prioritise discovery within Prime Video to continue to flourish.

  • December 4, 2019

    Virgin Media UK: challenging quarter, but opportunities ahead

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    Virgin Media had a challenging quarter, with its early price rise driving weak subscriber figures and product spin-down, resulting in reduced revenue growth and an accelerated OCF decline. The market environment remains challenging with very competitive pricing on superfast and little push for ultrafast, but superfast pricing is easing and competitors’ ultrafast pushes should accelerate in 2020. Full fibre roll-outs remain a threat and an opportunity in almost equal measure, with Virgin Media’s positioning likely to be clarified as the regulatory mist clears over the next year

  • December 3, 2019

    TalkTalk UK: A discount brand pushing a premium product

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    TalkTalk enjoyed impressive EBITDA growth of 14% in H1 19/20, despite revenue growth pitching down sharply in Q2, and gross margin falling due to the rapid adoption of high speed broadband. The fall in costs was driven by a combination of good expense control and lower subscriber acquisition costs, in part due to improved efficiency, but in part due to a falling subscriber base, which is not a sustainable route to earnings growth. While the current dynamics are challenging, market prices have been firming recently, and should firm further as ultrafast becomes more popular, but TalkTalk needs to move to a more premium pricing position to take full advantage

  • December 2, 2019

    Champions League senses end of growth cycle

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    With pay-TV competition faltering, UEFA is aiming to stimulate demand for 2021-24 TV rights with early auctions, a possible relaunch of FTA broadcasts, and even, unrealistically, by considering an online service of its own. In the recently completed UK auction, facing no major threat from Sky, BT kept the rights at an almost flat price – probably missing a cost saving opportunity. In the upcoming auctions on the Continent, with former buyers such as SFR, Mediaset and Vodafone having cut back on premium sports, the major platforms’ bids will probably be unchallenged

  • 5G Cover
    5G Cover
    December 2, 2019

    Telstra FY19 Investor Day – InfraCo, Enterprise and 5G to remai [...]

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    Telstra held is annual Investor Day event on 27th November 2019. Telstra CEO Andy Penn and senior management covered off progress on its T22 strategy, financial and earnings outlook, changing dynamics in the Enterprise market, progress on the 5G rollout, entry into gaming and changes to InfraCo. In this report, we have analysed some of the key announcements from the event and provided our take on the same.
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  • November 27, 2019

    Australia Out-of-Home Market Outlook

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    The Australian Out-of-Home (OoH) market has been growing continuously for the past eight years at a CAGR of about 9%. Going forward, we expect the OoH market to grow at a 5.4% CAGR through to 2023. This growth will be primarily driven by growth of Digital Out-of-Home, which will be further driven by improving programmatic advertising and new and innovative audience targeting solutions. We forecast that Digital Out-of-Home (DOOH) will grow at a 14.3% CAGR from 2018 to 2023, reaching A$869mn by 2023 and representing 76.5% of the overall OOH advertising expenditure, while Physical OOH will decline at a -9.2% CAGR from 2018 to 2023, reaching A$275mn by 2023 and representing only 23.5% of  overall OOH revenues.

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  • November 26, 2019

    Turnaround still elusive at Vodafone Europe

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    Vodafone continues to strike a very shareholder-friendly focus and tone but its operating performance remains decidedly muted, with revenue growth up just a touch but EBITDA growth halved. Vodafone’s drive for convergence is still costing it dearly. German mobile ARPU is down 7% and Liberty Global’s assets disappointed on their first consolidation with cashflow enhancement less than half that expected. Apart from its ill-advised convergence strategy, Vodafone is making many sensible moves and there are indications that its unlimited plans are gaining traction. With leverage tight, pressure is mounting for demonstrable improvements in the financials some time very soon.

  • November 26, 2019

    Local UK media at a crossroads: from incremental to radical innov [...]

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    Local newspapers are often identified as the most disrupted of all media. The impact of declining news media has widespread implications: for the healthy functioning of democracy, community and social cohesion as well as for local business and trade. In this report we look briefly at the existential state of local news media, and spell out a radical new approach that would require a complete rethink of local journalism and its commercial and operating models. We reimagine local media as a start-up would, rather than as incumbents with expensive models to maintain.
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  • November 25, 2019

    Sky UK Q3 2019 results: balanced, but more to come?

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    While Sky’s overall revenues continue to rise, Q3’s growth was hampered by a significant fall in advertising revenue and to a lesser extent a slowdown in content sales. Underlying EBITDA growth was in the mid-teens. Next quarter, Sky will continue to benefit from lower Premier League rights costs versus last season, and profit appears on track to meet full year guidance. Q3 saw a rare decline in Sky’s total number of customers due to the conclusion of Game of Thrones. Sky clearly understands the value of unique content—recently extending its HBO deal. In our view, this was essential, since without a distribution deal for Disney+ (launching in the UK in March) Sky would lose Disney’s alluring content.

  • UBS Conference
    UBS Conference
    November 21, 2019

    UBS Australasia Conference 2019: AI, Cyber Security, Digital Heal [...]

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    UBS held its annual Australasia investors conference over 18th and 19th November in Sydney, with a number of interesting panels across the two days. Venture Insights moderated the Cyber Security panel and attended a number of sessions over the two days. The sessions covered a variety of topical themes that included - China: trade, tech and capital flows, Artificial Intelligence, Clean Energy policy settings, Robotics, Autonomous vehicles, Cyber threat to Australian businesses, the limitations of monetary policy, cell and gene therapy, digital healthcare, sustainability trends, millennials, fintech investment trends and how tech giants are dealing with the techlash. In this report we highlight the key takeaways from the sessions on artificial intelligence, cyber security, digital health and fintech investment trends.
  • November 20, 2019

    Consumer magazine publishing in the UK

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    Long-known market trends have become even more accentuated: circulation decline is -13% (consumer spend decline is c. -3%); print advertising is down -12%, with online advertising spend up a mere 1% (see pages 3, 11)

  • November 19, 2019

    Health tech making big inroads in Australia’s health sector

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    Venture Insights believes that increases in Australian health costs are unsustainable into the medium term.  Health costs are on the rise, with the FY17 real rate of growth for health spending increasing to 4.7%, relative to the 5-year average of 3.1%. Given that health costs exceed inflation and growth in GDP, it is only natural that Federal and State governments will either need to restrict their services or find substantial productivity gains to maintain health services over the medium and longer term. In this report we explore the roll of health platforms to deliver productivity gains. Telstra Health having invested around $235 million on various platforms and software is arguably the largest of any such players in the Australia market. Is Telstra the natural party to own Telstra Health or is it time that a new owner steps up and takes it to the next phase of its evolution?
  • November 18, 2019

    O2 UK doing better than appears in tough times

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    In spite of total revenue growth of 4%, O2’s service revenue growth took another step down to -3% this quarter, consistent with the worsening environment and EE’s results. Its true performance is likely better than reported as IFRS15 has an artificially dampening effect on its service revenue as a consequence of O2’s Custom Plans, and is something of a boost to its impressive 6% EBITDA growth. O2 needs to continue to pedal hard to keep ahead of this challenging environment – with little let-up on the regulatory front, more aggression from Vodafone and H3G, and a potential regulatory hit to its Custom Plans
    Sector .
  • FLASH – SVOD first battle won, but watch the data
    November 18, 2019

    Free video! Apple TV+, Disney+, HBO Max and Peacock in a rush for [...]

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    New SVOD entrants are prioritising reach over revenue in the US with extensive ‘free’ offers, including Apple TV+ (to hardware buyers), Disney+ (to Verizon customers), HBO Max (to HBO subscribers) and Comcast’s Peacock (to basic cable homes). This is the latest development in an unfolding global story of partnerships, continuing on from multiple Netflix and Amazon distribution deals with platforms, bringing benefits to both parties. In Europe, Sky faces price pressure, but it has secured its HBO partnership and can now talk to Disney from a position of strength.
  • November 14, 2019

    Webscale Playbook: Baidu

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    Baidu, often referred to as “China’s Google”, is embarking on a new journey to pursue growth outside its core search and advertising business. That’s vital as the online advertising business is maturing, yet Baidu continues to rely heavily on it (80% of 2017 revenues).
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  • November 13, 2019

    NEXTDC FY19 update: growing fast with the market

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    On 30th October 2019, NEXTDC had its 9th Annual General Meeting. The Australian DC market remains competitive and given the demand most of the DC providers are expected to grow fast. NEXTDC is counting on high growth rate of demand for hyperscale data centres and is clear about its trajectory
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  • Magazine stand
    Magazine stand
    November 12, 2019

    UK’s TI Media goes back to the Future

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    Specialist publisher Future has offered £140m for generalist TI Media’s 41 brands, which will give Future 220 global brands upon expected completion in Spring 2020. The acquisition, which includes wholesaler Marketforce, is contingent upon shareholder and CMA approval. Future is the darling of publisher stocks, pursuing an energetic growth and scale strategy, and diversifying revenues through digital and experience innovation. How Future’s culture of experimentation and optimisation will work with TI Media’s more general portfolio is an open question. Only time will tell if the overall portfolio balance will work.
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  • November 11, 2019

    UK’s BT: Bumps on the road to recovery

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    BT suffered a weak Q2 with revenue and (particularly) EBITDA declines accelerating, but this was mainly down to timing (particularly at Openreach, which will likely recover in Q3), with the company confident in maintaining full year expectations. BT’s fixed broadband business enjoyed some recovery as the pricing environment improves, but will suffer another price timing bump next quarter, and its mobile business is suffering from a tough market environment that is unlikely to improve in the short term. The company is busy re-branding, re-positioning and transforming, but the outlook for football rights costs and fibre roll-out regulation will dominate in the short term, and further bumps (such as the Virgin MVNO contract loss) may emerge.
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  • November 8, 2019

    Streaming wars and the future of Foxtel

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    Up until a few years ago, Foxtel has enjoyed an uninterrupted run as the monopoly premium Pay TV provider in Australia. But the arrival of international SVOD players and the rise of local challengers has made a dent in Foxtel’s business.We believe the challenges that Foxtel faces are structural in nature and Foxtel could find it tough to recover lost ground.
  • November 6, 2019

    Champions League rights auction: BT’s cost-cutting opportunity

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    Champions League UK TV rights, at £394m/season, appear to have reached a ceiling, with costs on a per match basis now comparable to the more-desirable Premier League. In the imminent auction, current rightsholder BT is the clear frontrunner. Potential competitors appear reluctant: Sky Sports has thrived since losing the rights in 2015, and no other players can reasonably compete at this spend. This presents BT with a golden opportunity to rein in costs, with a view to moving BT Sport towards breakeven at an important time for the wider business, considering the financial pressure it is facing