Please Login / Register to purchase and view full reports.
November 28, 2017 ReportsTalkTalk 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 marketTalkTalk 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 t [...]
August 1, 2017 ReportsTechnology and sport are colliding. This is impacting the production, distribution and consumption of sports. As a result, the sports value chain is being reshaped, threatening incumbents and creating opportunities for new entrants.Technology and sport are colliding. This is impacting the production, distribution and consumption of sports. As a result, the sports value chain is being resha [...]
June 13, 2017 Reports
Domestic championship and Champions League rights for 2018-21 are auctioned almost simultaneously. The main uncertainties are the extent to which Sky will increase its exclusive coverage of Serie A, and whether it will try to win the Champions League auction to take advantage of rival Mediaset Premium’s announced retreat. We doubt that telecom or digital operators will be tempted by the €200m minimum price for the two internet-only packages with patchy regional coverage – a bad idea mandated by the regulator. However irrational behaviour at auctions should never be ruled out.
Domestic championship and Champions League rights for 2018-21 are auctioned almost simultaneously. The main uncertainties are the e [...]
March 20, 2017 Reports
Australians are willing to adopt wearable technology though high price points and perceived value are limiting purchases. To date, uptake of wearables has been predominantly by early adopters and spurred by niche uses in the health and fitness industry. Industries are yet to capitalise on the full potential of wearables. Some industries have begun to adopt basic functions, such as the finance industry, using it to personalise products and increase payment efficiency. The next growth phase of wearables will be fuelled by artificial intelligence, the Internet of Things and virtual and augmented reality. Significant disruption is expected as use-cases are identified across new and major industries.
Australians are willing to adopt wearable technology though high price points and perceived value are limiting purchases. To date, [...]
March 16, 2017 ReportsThe latest auction of UEFA Champions League televised UK rights has seen further high inflation (32%) as BT renewed its ownership for the three seasons from 2018/19 for an annual payment of £394 million. Although BT annual payments are to increase by £95 million from 2018/19, the new contract offers added commercial attractions, though we expect BT’s efforts to monetise them will fall some way short of the cost increase. However, BT had to win to cement its position against Sky as a strong number two in UK premium pay TV and we expect weaker future inflation of premium football rights. For Sky followers, the focus is now on the UEFA auctions in Germany and Italy, where the outcome is far from certain.The latest auction of UEFA Champions League televised UK rights has seen further high inflation (32%) as BT renewed its ownership for the three seasons from 201 [...]
September 16, 2016 Reports
BT Sport has seen a very clear positive impact from its first year airing the Champions League, with viewing up 60% year-on-year to June. Remarkably, its reach is now not too far off Sky Sports, though it still has some way to go in terms of consistent viewership.
BT Sport has seen a very clear positive impact from its first year airing the Champions League, with viewing up 60% year-on-year to [...]
August 24, 2016 Reports
Australia has always been a nation of avid sports fans, and the Olympics has long captured the attention of the Australian populace. But could our love affair with the Olympics be coming to an end? The Olympics has long been highly lucrative for broadcasters looking to drive strong viewer numbers. As the digital landscape continues to disrupt broadcast TV, the value of the Olympics is brought into question. We discuss the Olympic viewer numbers as well as the return on investment for broadcasters who buy the rights to televise the Olympics, and the anticipated future trends.
Australia has always been a nation of avid sports fans, and the Olympics has long captured the attention of the Australian populace [...]
June 14, 2016 ReportsThe award of the match packages in the 2017-21 domestic football rights auction in Germany is probably optimal for Sky (within the “no single buyer” constraint): it will broadcast about eight out of nine weekly fixtures including the top picks, while Eurosport’s package is complementary to Sky’s rather than substitutional. Sky will, however, pay a hefty price, with the new contract costing 80% more than the current one – although the new Bundesliga rights value is not out of line with other Continental leagues. We expect Sky’s German operations to briefly break even in fiscal 2017 before falling back into losses with a return to profit if other costs are kept under control. Management has made a bold statement of self-confidence: building scale is the priority.The award of the match packages in the 2017-21 domestic football rights auction in Germany is probably optimal for Sky (within the “no single buyer” constra [...]
April 20, 2016 Reports
At present, Sky exclusively holds all pay-TV domestic live rights to Germany’s top football league. The 2017-2021 rights auction will conclude in early June. It contains a new soft ‘no single buyer’ clause referring solely to online rights. Sky’s real threat comes from potential bids for the main TV packages by deep-pocketed telecom or digital platforms. This could see Sky losing games and shouldering significant cost increases. We think Sky’s German operations will break even by fiscal 2017. Beyond this, profitability is heavily dependent on the auction’s outcome. If it were to retain all live rights, Sky could afford to increase Bundesliga costs by up to 40% over the four-year period. Anything beyond this would lead to Sky making losses.
At present, Sky exclusively holds all pay-TV domestic live rights to Germany’s top football league. The 2017-2021 rights auction [...]
October 29, 2015 Reports
BARB viewing figures provide an encouraging start to BT in its first season showing Champions League and European televised rights; numbers are on a par with those achieved by Sky over the previous few seasons. The investment in rights is not just about achieving good viewing figures - BT’s entry into televised sports is as much about supporting its broadband and pay-TV business in the face of increasing competition from Sky and others. BT has reported results for the September quarter with record-setting TV net adds and steady broadband net adds, confirming that while Sky arguably won the broadband battle, BT won TV, and neither really lost in either category.
BARB viewing figures provide an encouraging start to BT in its first season showing Champions League and European televised rights; [...]
October 27, 2015 Reports
Sky has got off to a good start in 2016, as Q1 group revenues grew by 6% and operating profits by 10% year-on-year, while churn stayed low across all three operations, and product net additions of close to one million pointed to continuing strong underlying growth. The Q1 results have softened concerns about the impact of loss of Champions League live televised rights in the UK and Italy, which have so far shown very little effect in spite of intense competitive pressures from BT and Mediaset. Although Sky UK & Ireland has accounted for the entire year-on-year increase in Q1 operating profits, strong subscriber growth in Germany & Austria over the last two years, and signs that economic conditions in Italy are on the mend, provide a positive outlook for the year ahead.
Sky has got off to a good start in 2016, as Q1 group revenues grew by 6% and operating profits by 10% year-on-year, while churn sta [...]
October 9, 2015 Reports
In Italy, pay coverage of the Champions League shifted from Sky to Mediaset Premium this season. Alongside a new Serie A contract, this adds an extra €300 million to Mediaset Premium’s cost base. The first results indicate that Mediaset is unlikely to meet its subscriber growth target. On current trends we expect cumulative EBIT losses of over €400 million by 2018. Mounting losses may force Mediaset to close or sell Premium, but fear of Sky may slow decision-making. Sky was probably right not to overbid for the Champions League and the savings should more than offset minor subscriber losses.
In Italy, pay coverage of the Champions League shifted from Sky to Mediaset Premium this season. Alongside a new Serie A contract, [...]
September 30, 2015 Reports
We don’t expect the overall size of the video entertainment market to change materially but we do expect the platform share to change dramatically over the next five years. We expect xVOD services to represent 20% of the overall market from around 5% currently (replacing Physical Media and Premium Pay-TV).
We don’t expect the overall size of the video entertainment market to change materially but we do expect the platform share to ch [...]
August 17, 2015 Reports
Has Nine stolen a jump on its rivals with its NRL rights deal? At A$925m only time will tell if there is a return on its investment. What we can say is: this underpins the value of sports to delivering live audiences and it reinforces that broadcasters will remain the key rights holders for the next rights cycle at least.
Has Nine stolen a jump on its rivals with its NRL rights deal? At A$925m only time will tell if there is a return on its investment [...]
June 30, 2015 Reports
BT will soon for the first time charge the majority of viewers for their own channels with the launch of the BT Sport Pack. The Pack includes BT Sport Europe, home to UEFA’s European football tournaments from this August, the rights to which BT are paying £299 million a year. Viewing figures for the big European tournaments are not as high as one might expect given their prominence. Consumer demand for the new channel will also be highly dependent on the success of British teams, notably lacking in recent seasons. We therefore do not expect a dramatic impact on BT Sport (or BT broadband) subscribers, and the widening losses will put pressure on BT’s margin squeeze test regulation, although they are easily absorbable at BT Group level.
BT will soon for the first time charge the majority of viewers for their own channels with the launch of the BT Sport Pack. The Pac [...]
January 26, 2015 Reports
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead of company guidance and consensus expectations. The positive news about subscriber numbers, which saw a sharp jump in share price immediately after the results, was heavily reinforced by Netflix’s announcement of its aim to expand its global base from 50 to 200 countries over the next two years and generate a material profit from 2017. As usual Netflix provided no international details other than to say that LatAm had passed the 5 million milestone in Q4. Elsewhere, BARB data suggest that Netflix passed the 4 million milestone in the UK, while it is still too early to assess the longer term potential of its September launches in France and Germany.
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead o [...]
November 4, 2014 Reports
BT faced a more intense battle in the broadband market in the September quarter, and lost some net adds share, but retained its #1 spot and is still growing well. Revenue growth fell at both the group and consumer level, but this was largely due to the BT Sport direct revenue benefit annualising out, with growth excluding this actually improving a touch. The flip side of this is that the negative cost impact is also annualising out, and cost reduction in the quarter looks weak in this context, but this is likely due more to discretionary spend on new products than a lack of costs to cut.
BT faced a more intense battle in the broadband market in the September quarter, and lost some net ad [...]
October 20, 2014 Reports
Q1 2015 results show steady underlying revenue growth in retail subscription and increases in other segments, along with the continuing extraction of cost efficiencies, resulting in an 11% year-on-year increase in Q1 operating profits.Quarter-on-quarter, Q1 2015 retail subscription revenues and ARPU were flat in spite of the strong uptake and growing use of connected products. Main causes appeared temporary - a mixture of seasonal factors and the launch of Sky Sports 5 with its two-year free broadband offer - while underlying growth remains firmly positive.Meanwhile, Sky's accelerated investment in connectivity during 2014 is bearing fruit. Eyes may be focused on the formation of the new Sky (on schedule for November) and the long awaited Premier League auction, yet other developments such as Sky Store and Sky AdSmart also deserve full attention.
Q1 2015 results show steady underlying revenue growth in retail subscription and increases in other s [...]
August 19, 2014 Reports
Consolidation in US and European TMT and the rapid expansion of digital giants is creating increasing pressure on the media companies who have to negotiate with them. In Time Warner, 21st Century Fox identified an acquisition that would give it invaluable global premium content and distribution assets, and the ability to outbid its main rivals in upcoming sports rights auctions. The benefits for Time Warner were less discernible. The bid was pulled after Time Warner's management signalled they weren't interested, and investors reacted with share price movements that helped preclude the bid in the near-term. But consolidation amongst media companies will only make more sense in the years to come.
Consolidation in US and European TMT and the rapid expansion of digital giants is creating increasing [...]
August 19, 2014 Reports
Market revenue growth in the UK residential communications sector continued to be robust in Q2 2014 at 5.4%, a slight increase on the previous quarter, with continued volume growth and firm pricing countering weak call volumes and the negative impact of a VAT legislation change hitting Virgin Media and TalkTalk. BT was the fastest growing out of the big four' in revenue terms in Q2 even after the direct revenue impact of BT Sport is excluded, a remarkable turnaround after being in last place a year ago, driven by both volume and ARPU growth continuing to accelerate, with fibre helping both. Since the end of Q2, promotional activity has already intensified, particularly from BT and Sky around the start of the new football season, and churn is likely to be under more pressure at all of the operators, although the disruption is likely to be less severe than that experienced around the launch of BT Sport last year, and we expect all of the major players to continue to grow in net terms.
Market revenue growth in the UK residential communications sector continued to be robust in Q2 2014 a [...]
August 4, 2014 Reports
BT had a solid Q1, with Group revenue growth still positive but slightly slowed by weakness in managed services and Global Services, and EBITDA flat in the last quarter before BT Sport costs fully annualise out. The consumer side had strong revenue growth, with accelerating volume growth and solid ARPU, although net subscriber additions were relatively subdued in a quarter that was seasonally quiet. The next quarter will likely be a noisier one, with promotions ramping up as the new football season launches, and both BT and Sky positioning themselves ahead of the next Premier League auction.
BT had a solid Q1, with Group revenue growth still positive but slightly slowed by weakness in manage [...]
June 30, 2014 Reports
After a three-week long messy and opaque high drama auction Sky retained its broadcast rights for all Italy's Serie A games for 2015-18 with a negligible 1% price increase. Its rival Mediaset managed to keep hold of the top fixtures, but its coverage shrinks by 18% whilst paying 35% more. A deal earlier this year for the Champions' League rights will add considerably to Mediaset's total costs. In the stagnating Italian economy, Sky may manage a return to more comfortable profitability. Mediaset's pay-TV business model looks much more challenging, even if a new investor were to be lured in.
After a three-week long messy and opaque high drama auction Sky retained its broadcast rights for [...]
June 19, 2014 Reports
Ofcom's fibre margin squeeze test's initial indicative assessment concludes that BT's current wholesale/retail pricing is close to the boundary' of creating a squeeze on its competitors. While BT can take comfort that it is at least close to passing the test, its DSL competitors (Sky, TalkTalk et al) can take comfort that BT cannot make life materially more difficult for them without failing it. Crucially, the costs of BT Sport are included in the test, so BT is now heavily dis-incentivised from further aggressive bids for sports rights, which is positive news for the prospective cashflows of both Sky and indeed BT itself.
Ofcom's fibre margin squeeze test's initial indicative assessment concludes that BT's current wholesa [...]
June 8, 2014 Reports
Market revenue growth in the UK residential communications sector was surprisingly robust in Q1 2014, rising a touch to over 5% (or around 4% excluding the direct impact of BT Sport) from just under 5% the previous quarter, despite facing a number of headwinds. Revenue growth at the top four operators has converged to around 4% for all, which marks a major long term turnaround for BT and TalkTalk, who back in 2012 were both experiencing firmly declining revenue well below market growth, and have since done much to stabilise their subscriber bases and sustain ARPU growth. Looking forward, we expect that BT will continue to do well in the June quarter given Sky's continued focus on TV products, but thereafter its focus may change, and whether BT's recent competitive boost from fibre will continue growing is uncertain. Having said this, any likely market share shifts are relatively minor in the context of the market, with the general theme likely to remain that the rising tide is lifting all boats.
Market revenue growth in the UK residential communications sector was surprisingly robust in Q1 2014, [...]