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  • New
    March 19, 2018

    UK addressable TV has more to deliver, while online video posts r [...]

    The market for addressable TV looks constrained despite its benefits, with Sky AdSmart taking less than 2% of overall TV ad revenues. Meanwhile, online video revenues for Google, Facebook and others have surged dramatically. Agencies are seemingly enraptured by online video – a highly profitable medium to buy – despite concerns about a lack of effectiveness, safety and transparency. For broadcasters to compete better radical collaborative action is needed including industry-wide adoption of AdSmart, and overhauling the trading arrangements which hinder its take-up.
    Sector , .
  • March 15, 2018

    BBC Worldwide considers the rest of UKTV

    A change of control clause triggered by Discovery’s takeover of Scripps will grant BBC Worldwide the option to acquire the 50% of UKTV that it does not already own. With a possible price in the vicinity of the £339 million paid by Scripps in 2011 it is by no means certain that BBCW could proceed alone—so a new, minority partner may well be necessary. Discovery, on the other hand, may be keen to acquire full ownership of UKTV, while retaining a licensing arrangement for the BBC’s content. A channel portfolio containing the best of Discovery, Scripps and UKTV content built on UKTV’s strong EPG positions would transform Discovery in the UK.
    Sector , .
  • March 8, 2018

    Importance of News Content

    In an increasingly digital world, the free flow of information has lowered the value of paid news. News providers, which could earlier rely on advertising to subsidise journalism, continue to face aggressive competition from global tech giants and are being forced to find new revenue streams
  • The Internet of All Things - Towards the Hyper-connected World
    The Internet of All Things - Towards the Hyper-connected World
    March 6, 2018

    UK Internet Trends H2 2017: From shallow online to the online imm [...]

    In this report we develop a rough segmentation of the adult population by level of online use: offline (10% of adults), shallow online (10%), deep online (80%). We examine how online services seeking to reach new audiences increasingly face the obstacle of missing demand rather than a lack of consumer skills or access. The app economy still relies on a limited consumer pool, but ecommerce is now reaching almost all of the deep online. Bridging the current gap between occasional and frequent online buyers is a clear opportunity and we are still in the early days of evolving buying services into shopping services. The only industry monetising all online users is advertising. Ad platforms, led by Google and Facebook, also play a critical role expanding the ranks of the deep online and online immersed. But offline brand display media, led by broadcast TV, remain critical for online brands wanting to expand their audience.
  • March 2, 2018

    UK broadband, telephony and pay TV trends Q4 2017

    UK residential communications market revenue growth fell again to 1.2%, with weakening ARPU growth the main driver. New customer pricing remains flat to down, and existing customers are being increasingly discounted, fuelling the ARPU weakness. High speed broadband adoption is proceeding apace, but the high speed premium is fairly thin, muting the impact on ARPU. Regulated wholesale price cuts from Openreach finalised today and due in April 2018 will not help. Looking forward, the March quarter will benefit from price timing effects at BT and Virgin Media, but we fear that the rest of 2018 will follow the current downward trend and the operators will need to adjust to an ex-growth environment.
  • February 26, 2018

    Virgin Media Q4 2017 results: Growth limited by market pressures

    Virgin Media’s Q4 performance was a little softer than expected, with subscriber figures quite weak and no improvement in ARPU growth despite a better implementation of its annual price rise. The cause is however likely market-driven, with broadband demand slowing and all operators struggling for ARPU growth, and Virgin Media does now lead the market for subscriber, RGU and revenue growth.The prospects for 2018 are solid if not spectacular, with Project Lightning driving market share gains and ARPU defended by a network speed advantage that will last for many years yet.
  • Free
    February 20, 2018

    Media Sector Update

    , ,
    In September, 2017 the Australian Government voted in favour of a comprehensive package of media reforms. Key highlights from the historic reforms include increased requirements to show Australian produced content, a public ownership register of media assets, and additional funding for regional and small publishers. (Full details in Venture Insights’ Media Reform Update report in October, 2017). As we reported, while media reform opens the door for consolidation, we do not believe it will or should result in the M&A frenzy many observers predicted. After all, simply putting two challenged businesses together will not provide sustained respite from strengthening industry headwinds or growth in the absence of robust strategic planning that looks beyond the immediate horizon.
  • February 14, 2018

    Sky H1 2017/18 results: Solid platform, questions on content

    Sky H1 results were very solid, maintaining 5% revenue growth and 10% EBITDA growth, with Sky continuing to support a widening product portfolio and more expensive core products with strong cost control and execution. Subscriber volume growth was a little weak at the margin, but this will be helped by all-IP products expanding the economically addressable base in new, and existing, markets. There remain questions on content, with the outlook for premium football rights uncertain in the UK and Italy, and investment in Originals questionable given a mixed track record, but certainly with upside
  • February 13, 2018

    Trinity Mirror boards consolidation Express

    Trinity Mirror’s proposed acquisition of Northern & Shell’s newspapers (Express and Star) and magazines reflects a hunger for consolidation among corporate media, creating scale positions while entrepreneurs step back. The deal makes strategic sense for Trinity Mirror, with material cost savings in printing and back office, and some scale benefits in advertising: important developments if the industry is to generate a differentiated digital offering. DCMS’s announcement of a review to sustain quality national and local news provision sets some welcome mood music for the sector, but the Trinity Mirror acquisition may still face regulatory hurdles
  • February 13, 2018

    Premier League auction: not ripe for GAFAN disruption

    The overall scale of the GAFAN digital media giants may be huge, but the cost of becoming a major player in Premier League (PL) football remains utterly disproportionate to the current scale and ambitions of their video businesses in the UK. Furthermore, the main package PL rights are live-only, UK-only, and of limited breadth of appeal, making a poor strategic fit for any of the digital players. The cheaper minor packages, near-live and clips rights may be a better fit, but bidding on these will not move the needle in terms of the £1.7 billion per year main PL auction rights costs.
  • February 9, 2018

    Tencent: gaming giant heads west

    Tencent, by some counts the world’s most valuable media and entertainment company but still relatively unknown outside Asia, is riding games growth to global clout. The company offers a blueprint for successfully integrating media and entertainment companies, saving on overheads while retaining key talent and organisational culture . Tencent’s recent investments in Snap and Spotify suggest media platform ambitions beyond games in the West, but close ties to the Chinese  government could complicate regulatory approval for strategic acquisitions.
  • February 5, 2018

    CMA issues provisional findings in Fox-Sky

    The Competition and Markets Authority (CMA) has provisionally found that Fox’s acquisition of Sky is against the public interest on media plurality grounds, although it could proceed with an appropriate remedy. The CMA found the merger would give the Murdoch Family Trust (MFT) and family members “too much influence over public opinion and the political agenda”. The CMA now enters the challenging remedies phase. Fox could offer an Editorial Board for Sky News pending finalisation of Disney-Fox (by 2019). Third parties seem likely to continue to seek to prohibit the merger
  • February 5, 2018

    Chinese online media platforms

    Baidu, Alibaba, and Tencent (BAT) have built their leading market positions in Chinese online media on the back of the mobile revolution and an absence of foreign rivals. The big three’s rivalry in online advertising reflects a broader struggle over key gatekeeper roles in the Chinese online economy, albeit one shaped by state intervention. While benefiting from protectionism at home, BAT are weak in most foreign markets and links to the Chinese state may hamper international expansion, particularly in the US
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    February 1, 2018

    Serie A’s 2018-21 auction morphs into telenovela

    The Italian league, unhappy with broadcasters’ bids of €830m, are now holding talks with Spain’s Mediapro, who has offered €950m and would produce a channel to wholesale to all platforms. Mediapro’s bid faces challenging economics given the low potential for an OTT strategy and Sky’s exclusive possession of a sufficiently monetisable subscriber base. Ultimately, we expect Sky to continue its full coverage and to increase its outlay only if it gains more exclusive fixtures
  • January 16, 2018

    Stitch Fix IPO: profits are back in style

    Subscription fashion retailer Stitch Fix has gone public, revealing a rare example of a new, private, technology-based company capable of making a profit. Stitch Fix relies on the ‘mixed intelligence’ of algorithms and human stylists to offer its customers a curated fashion “Fix” of clothing and accessories, aiming to cut through some of the chaos of ecommerce. Though Stitch Fix’s success is not guaranteed, there is much to be learned from its approach of focusing on building a solid business and generating positive earnings early, rather than growing users at any cost
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    January 11, 2018

    Italy’s Serie A desperately fighting football rights deflation

    Results of the league’s new call for tender for its 2018-21 broadcasting rights will be unveiled on 22 January. The platform-based packaging was reviewed after last year’s aborted auction, apparently to accommodate loss-making Mediaset Premium, the participation of which remains nevertheless uncertain. Sky could keep its current satellite and internet coverage without increasing its outlay. We expect no major Telecom Italia (TI) or GAFA bid. Serie A seeks an unrealistic €1.05 billion per year (up 24%). If the auction results fall short, it hopes to sell rights to financial investors or, in a last resort, to launch its own channel – both ideas smacking of recklessness
  • January 9, 2018

    Video on demand insights: Netflix, Amazon and the iPlayer

    Even with the decline in linear television viewing, online video remains a small component of total video consumption. The growth area is unsurprisingly SVOD; subscription video now makes up about two thirds of the UK's digital video spend. Netflix is moving from an aggregator of content to a "channel" in its own right, increasing proportionate spend on original programming, something that the public service broadcasters are unable to do for differing reasons. Amazon had a tough 2017 for video, and are still struggling to create a hit. New Nielsen audience data suggests that the long-term "library value" of Netflix's originals may be overstated, while the BBC's iPlayer continues to be hampered by not really having a library at all.    
  • December 21, 2017

    Auto classified marketplace: Auto Trader steered into stronger p [...]

    Print advertising in the autos classifieds marketplace keeps declining, but significant continued online growth steadies the helm. Five years on from new car financing innovations, and exasperated by changes in consumer behaviour towards greener tech, the used car market is braced for a flood. Auto Trader’s competitors force it to keep innovating, although having saturated the market, its dominance gives it enough headroom to worry about the weather breaking.    
  • December 21, 2017

    Recruitment classified marketplace: Tech giants eye up LinkedIn [...]

    A strong UK labour market, with record low unemployment but historically high vacancies, has supported growth in the recruitment industry, though trends may be peaking as we reach unknown territory. These trends play out in the recruitment market before they become apparent in the labour market.Despite the fragmentation of the online recruitment listings marketplace, Indeed is well-placed to dominate this space due to its increased scale and aggressive investment strategy. Both Google and Facebook have announced their intention to move into the recruitment listings sphere, which may have consequences not only for classified expenditure but further up the value chain with the agency model. However, both giants have attempted to move into online classifieds before, with little demonstrable success.
  • December 21, 2017

    Vertical marketplaces overview and property classified outlook: E [...]

    The slowing UK economy since Q3 2016 has had a knock-on effect on the property and autos marketplaces underlying UK classified advertising revenues, with house prices slowing, transactions stabilising (instead of rising), and new car registrations down sharply in 2017 to date. Recruitment activity by agencies and employers has instead been dynamic as the UK nears full employment. Advertisers in these verticals continue to switch expenditure from print classifieds to internet portals and search, which offer superior lead generation, analytics, and user experience. Only in property do local newspapers still fulfill an important estate agency branding function for the local area, although declining readership is blunting this value to advertisers. Portal dominance comes at a price to advertisers in property, where Rightmove has resisted agent efforts to lessen dependence by listing on other brands, as well as in used autos, where Auto Trader has long reigned supreme. Recruitment is a more contested market for portals, reflecting the diverse and fragmented nature of the jobs market, but Indeed has a strong grip on the low-end, while LinkedIn remains unchallenged in social recruitment advertising
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    December 12, 2017

    Children’s changing video habits:And implications for the conte [...]

    Children’s media use and attitudes have dramatically changed over the last few years, stemming from the rapid take-up of smartphones and tablets. Traditional TV continues to decline at the expense of newer video services such as YouTube, Netflix and Amazon, with 43% of children aged 8-15 preferring YouTube videos over TV programmes.These online services offer content producers wider opportunities, but questions remain around the lack of regulation online, and the recent scandal around children’s safety on YouTube has heightened these concerns.
  • December 5, 2017

    Channel 5: three years on from Viacom’s acquisition

    Viacom’s 2014 acquisition of Channel 5 from Richard Desmond’s Northern & Shell occurred while the maelstrom encircling linear television viewing—sparked by the allure of SVODs and other digital distractions—was well underway. Nevertheless, with increased content spend, development of new titles and clarity as to its targeted audience, the broadcaster has increased its channel (and group) share amongst 16-34s and ABC1s, and has directed further benefits back to its owner's existing entertainment suite. Outside of the post-lunch and 8-10pm slots, however, work needs to be done: Channel 5’s BVOD proposition and social media offering leaves much to be desired, while the reliance on two major titles, Big Brother and Neighbours will be unsustainable in a post-linear world.
  • December 1, 2017

    UK TV set viewing trends

    BARB data indicates that the amount of average daily TV set viewing to linear TV channels is continuing to fall: the pie is shrinking. Just under 20% of TV set usage so far in 2017 is to non-linear activity, and viewing to SVOD services and YouTube is likely to account for most of this growth in 'unmatched' viewing. The pie is shrinking faster amongst younger audiences: just under one third of TV set usage is 'unmatched' now for 16-34s. However 35+ unmatched use is growing at a faster rate than 16-34 unmatched use in 2017. Within this smaller pie, the PSB channels continue to hold share of viewing against pay channels. Within the PSBs, ITV and the ITV digital channel family have gained most share so far this year, although BBC1 is having a strong autumn in spite of the loss of Great British Bake Off to C4.
    Sector , .
  • November 24, 2017

    TalkTalk Group Q2 2017/18 results: Growth at a cost

    TalkTalk continued to maintain positive broadband net adds in Q2 despite increased churn, and its on-net revenue growth turned positive as well, helped by the turnaround in subscriber growth trends and an overlapping price increase implemented during the quarter. The return to growth is taking its toll in marketing costs however, and the company is now guiding to a full year ‘headline’ EBITDA at the lower end of its previous given range, and this is after redefining ‘headline’ to exclude losses from its winding-down mobile business. Even this looks challenging given the cost trends in the first half of the year. The company’s new strategy of subscriber growth and focusing on the basics is probably the right one, but it is proving tough to implement in a slowing and increasingly competitive market