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  • New
    March 22, 2019

    BritBox’s muted arrival in the UK: ITV FY 2018 results

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    After the heights that Love Island and the World Cup took ITV to in H1, the broadcaster held on over the tougher last few months of 2018 to see growth in ad revenue (0.8%) and total viewing (linear and VOD, 3%). However, it was the announcement of the subscription video service BritBox—with the discussions around the “strategic partnership” with the BBC in its concluding phase—that garnered most interest. ITV’s investment in the service is modest when compared to its global competitors—up to £25 million in 2019, £40 million in 2020 and declining thereafter—but it is a prudent low-risk entry into what is an expanding but difficult market.
  • New
    March 21, 2019

    TPG 1H19 – Business sector to be a key focus as NBN erodes Cons [...]

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    On 19th March 2019 TPG released its 1H19 results. Overall profit plunged to A$46.9mn compared to A$198.6mn 1HY18, though much of this was a result of the write down of its spectrum assets and small cells mobile network. The announcement was also the clearest indicator of TPG potentially no longer offering entry level A$60 per month NBN, echoing industry consensus that NBN pricing is unsustainable.
  • New
    March 20, 2019

    Virgin Media UK: proceeding with caution as speed advantage comes [...]

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    After strong underlying 2018 results, the more subdued outlook for 2019 is an important shift, driven by regulatory pressure on mobile, higher programming costs, one-offs and softening demand. Lightning is continuing to drive market share gains in new build areas, and should provide a 2ppt tailwind to revenue growth in 2019, but enhanced visibility on the economics of rollout suggests that its conservative approach is a wise one. In existing build areas, Virgin Media is facing-off pricing pressure from TalkTalk on high speed, and potentially from BT on even higher ultrafast speeds, with it moderating pricing and launching a market-beating 500Mbps product in Spring 2019 in response.
  • New
    March 19, 2019

    UK online advertising: Brexit year forecast and trends

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    UK online advertising spend continued its double-digit growth in 2018, up 11% to reach nearly £13bn in annual spend or 58% of the total advertising market, but a no-deal consumer downturn could nearly stop growth this year. Google, Facebook, Amazon, professional services firms and the largest marketing cloud companies are the biggest winners, while content media, media agencies and independent advertising technology firms languish. Self-regulation has improved as pressure mounts on advertising technology firms, but interventions by both privacy and competition authorities are now inevitable.
  • March 15, 2019

    TikTok’s challenge to Western social media

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    Launched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe. Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year. Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination.
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  • March 14, 2019

    Huawei and UK 5G: Identifying the risks

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    ­­­­Governments and operators have come under increasing pressure to exclude Huawei’s 5G equipment from national networks, with justifications usually kept vague and wide-ranging rather than specific, and no evidence provided. Given the role of Huawei’s 5G equipment in the network and the extent of existing testing and checking, realistic security risks that apply to Huawei and not to all other equipment suppliers are hard to conceive. The risks of any ban are however very real; with Huawei one of only three global-scale telecoms equipment suppliers, and the preferred early choice for 5G radio equipment in the UK, removing this choice will massively increase costs and delay roll-outs of cutting-edge connectivity.
    Sector .
  • Free
    March 13, 2019

    Equity crowdfunding in Australia: We have lift-off

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    Equity crowdfunding has been celebrated as a game-changing alternative to venture capital and traditional business loans but has until recently been off limits to most retail investors. With the lifting of Australian restrictions on who can use equity crowdfunding platforms, there is cautious uptake from consumers and start-ups – with several platforms establishing a clear lead – but the claim of outsize returns will take time to be tested.
  • March 12, 2019

    The future of UK video viewing: forecasts to 2028

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    Linear TV is still a mass market medium, watched by 90% of the UK population each week. However, our latest viewing forecasts predict broadcasters will account for two-thirds of all video viewing in 2028, down from c. 80% today, due to the relentless rise of online video services. Total viewing will continue to increase as more short-form content is squeezed into people’s days, particularly on portable devices, but the key battleground for eyeballs will remain the TV screen. The online shift has already had a huge impact among younger age groups, with only 55% of under-35s’ current viewing to broadcasters. Older audiences are slowly starting to follow suit, but have a long way to go.
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  • March 11, 2019

    ACCC’s Digital Platforms Inquiry – more regulation on the hor [...]

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    Google and Facebook have made their submissions relating to the ACCC’s Digital Platforms Inquiry. Both tech giants have focused their attention on the ACCC’s recommendation for the need to establish an "algorithm" regulator. If implemented it will have major consequences to the tech giants and potentially other players.
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  • March 8, 2019

    GDPR tested on Google, ad tech and Facebook

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    Recently issued regulator rulings on Google, ad tech companies and Facebook challenge prevailing online advertising practices of obtaining user consent under the EU’s General Data Protection Regulation (GDPR). Rulings from France on Google and ad tech partners of media owners called them out for inadequate disclosure to users, and excessive merging and processing of data. In a landmark precedent for Germany, the Federal Cartel Office found that Facebook lacked “freely given” consent from users, calling its terms “exploitative” and an abuse of its dominant position, also harming competitors.
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  • Free
    March 7, 2019

    Mobile payments – New Zealand moving from cashless to walletles [...]

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    The New Zealand 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.
  • March 6, 2019

    Sports SVOD – Can Foxtel deliver a KO?

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    Of all the video content genres, sport has the best reputation for delivering audience reach and a large number of viewers for traditional TV operators. But the rise of Sports SVOD and OTT platforms is threatening to undermine the established order. Foxtel has launched its standalone sports streaming service – Kayo Sports and signed up 100,000 subscribers within the first 3 months of launch.
  • March 4, 2019

    O2 UK delivering well on many, but not all, fronts

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    ­­­­O2’s Q4 results delivered market-leading service revenue growth of 3%, double-digit EBITDA growth, sustained strong net adds and low churn. With ARPU service revenue growth flat, all of the growth came from other service revenue including M2M (machine-to-machine) and MVNO; a lumpy category up by more than 40%. Following a period of strong outperformance, O2 will face some challenges in 2019: some cost inflation to mitigate and the risk of a churn increase following December’s outage although experience suggests this is likely to be short-lived.
    Sector .
  • March 4, 2019

    MWC – all very exciting but where’s the money?

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    ­­­­The combination of 5G, AI, IoT and big data were evangelised at MWC as generating massive scope for the transformation of multiple industries. That much is probably true, but it is the tech and consultancy companies who will likely receive the benefits, with connectivity revenue likely to be modest. For the operators, 5G brings more capacity much needed for hungry smartphone users, and perhaps the opportunity to transform themselves into a leaner operating model.
  • March 1, 2019

    The Next solution to ecommerce

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    Consumers have more shopping options than ever, forcing businesses to expand how and when they offer services. Online giants Amazon and Alibaba are adding physical retail to extend their routes to market. Omnichannel provides consumers an enhanced, seamless brand experience from research and discovery to purchase, delivery and after-sales, and allows businesses to react to changing consumer preferences more flexibly. Next is an omnichannel success story, introducing 48-hour home delivery in 1988 and online sales in 1999. Its market-leading fashion ecommerce business offers lessons on the future of retail.
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  • March 1, 2019

    Vocus 1H19 earnings update: Losses in both Consumer and Business

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    On 27th February Vocus announced its 1H19 earnings. Revenue increased slightly but EBITDA and profits remain on a downward trend. Consumer and business segments saw large declines in revenue and SIOs. In a year of “resetting”, Vocus faces the difficult challenge of extracting value out of its fibre assets through enterprise projects and transforming its Consumer segment with a renewed focus on mobile and wireless.
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  • February 27, 2019

    The price is right for UK’s national newspapers

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    The average cover price of national newspapers has risen by 58% since 2010, more than twice the CPI increase of 22%. Are publishers “shooting themselves in the foot” at a time when buyers and advertisers are defecting to online?. To settle this, we analysed all the cover price events by national titles between 2010 and 2018, which reveals the relative success of The Times when it has raised its price. For mid-market and popular titles, cover price hikes have on balance reduced circulation revenues and, by lowering reach, drained advertising revenue: a lose-lose scenario.
    Sector .
  • February 27, 2019

    oOh!media CY18 update: market outlook remains strong…

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    On 25th February 2019, oOh!media reported its full year CY18 earnings update.Venture Insights forecasts strong growth for the OOH market. oOh!media reported strong earnings and looks set to benefit from the ongoing momentum in the OOH space albeit with some short-term slowdown due to the elections.
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  • February 26, 2019

    Seven and Nine 1H19 update – increasing share in a declining ma [...]

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    Seven West Media and Nine Entertainment reported their 1HFY19 earnings last week. 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.
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  • February 22, 2019

    Monthly Australian TMT Wrap: February 2019

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    February saw an increased level of market activity in comparison to January. The uncertainty around the TPG-VHA merger continues, with TPG is likely to write down the value of its spectrum licenses and mobile network assets in event the merger doesn’t get ACCC approval.
  • February 22, 2019

    BT Global Services: Playing a bad hand as well as it can

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    BTGS’s strategic plan seems like a sensible move in a very challenging market but it heralds its transition to a new operating model where its competitive advantage is largely eroded, its addressable market squeezed and it is arguably sub-scale. Although hybrid infrastructure and revenues from transition to cloud-based IT will provide something of a cushion, guidance and consensus forecasts are too optimistic in our view – cost-cutting plans are therefore likely deficient. Longer term, with IT services increasingly easy for corporates to manage themselves, diminished appetite for hybrid networks and global giants such as Amazon, Microsoft and Google squeezing out the middle-man, the space that BTGS occupies is likely to be considerably smaller.
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  • February 22, 2019

    Time to create an addressable UK TV market

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    Addressable linear TV advertising, where precision-targeted ads overlay default linear ads, could enhance the TV proposition for advertisers, agencies and viewers, benefiting all broadcasters. In the context of dwindling linear viewing and rocketing online video ad spends, the adoption of Sky AdSmart and similar services on YouView and Freeview could take addressable TV ads from a sideshow to a pillar of revenue. Addressable linear is a bigger and more strategic prize for broadcasters than BVOD ads. Sky holds the key to wider adoption of its AdSmart platform if it can find a way – or a price – to bring ITV Sales and/or 4 Sales on board.
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  • February 21, 2019

    BT Q3 2018/19 results: Openreach stronger than it looks, but Cons [...]

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    BT’s Q3 results were a little mixed, with mobile particularly weak, but the company remains on track to meet/exceed its (fairly conservative) guidance for the current year, and hit (modest) consensus expectations for 2019/20. Openreach was very weak at the headline level (-9%), but stripping out an accounting effect and internal revenue the division grew by 2% by our estimates despite significant price cuts, and full fibre roll-out is progressing well. While Openreach should accelerate this year, Consumer will be hit by a price rise holiday and slowing mobile, with investors likely having to wait for existing sports rights contracts to play out to see significant profitability improvement.
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  • February 20, 2019

    Monthly Australian TMT Wrap: January 2019

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    January was a rather quiet month in the Australian M&A space, with the ELMO Software/ BoxSuite’s binding sale agreement as the only major transaction. The launch of 5G networks in Australia continues with the results of the 3.6GHz spectrum auctions, though TPG will scale down its deployment due to the Huawei equipment ban.