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May 12, 2021BT Sport for sale: All change for the game changer
Flash Report, ReportsA move away from premium sport is long overdue from BT, with there having proved to be little strategic, 'halo' or other cross-over benefit to its core broadband and mobile businesses. Following a press leak the night before, BT last week (29 April 2021) confirmed that "early discussions" were taking place with "a number of select strategic partners" concerning the BT Sport business. The press leak revealed further that the discussions related to the sale of a stake in the business, with DAZN, Amazon, Disney and ITV reportedly in the frame. -
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May 12, 2021Premier League rights: Forgoing a faithful formula?
Flash Report, ReportsThe Premier League is reportedly seeking to roll over its existing domestic TV rights deal, in a bid to shore up its financial position given its losses during the pandemic In the wake of an explosion of football news surrounding the failed European Super League (ESL) breakaway, the Premier League reportedly wants to forgo the next auction for its live domestic broadcasting rights (which would cover the three seasons from 2022-25), and instead roll over its existing deals with Sky, BT and Amazon with broadly similar packages. Should this be achieved, we would expect to see a substantial discount in the negotiated price. It remains unknown whether the rollover would encompass all three seasons or simply delay the auction by a year or two. While there are obvious benefits for all the involved parties—mainly centring around financial stability and certainty, especially given the pandemic, which has cost the Premier League clubs an estimated additional £1.5 billion of operating losses[1]—the enormous sums at stake mean that negotiations are likely to be fierce. Reportedly, the Premier League has also sought permission from the UK government to pursue such an arrangement. [1] We estimate the collective operating losses of the 20 Premier League clubs to be c. £1.4 billion in fiscal 2020 and c. £1.3 billion in fiscal 2021. This compares to a baseline of £580 million of operating losses in 2019, pre-pandemic. Figures do not account for player trading. -
May 6, 2021ITV Q1 2021 results: Returning to 2019 levels
Flash Report, ReportsTotal advertising revenues were down 6% year-on-year in Q1, but strong expected growth in Q2 should ensure H1 is on par with 2019, and up 26% on 2020 Coming into the first quarter of this year—following the strong end to 2020—there was little market visibility of TV advertising revenues due to the possible impact of Brexit on advertisers' supply chains, and of course the effect of the pandemic over the winter. ITV reported total advertising revenues down just 6% year-on-year to £402 million, with the market being stronger than previously anticipated. Perhaps of greater interest, however, is the outlook ITV gave for April to June, given the 43% total advertising revenue decline ITV experienced last year as a direct result of COVID-19. In contrast April was up 68% while May and June are expected to be up at least 85%. While these are certainly buoyant figures, it should be noted that this would mean H1 2021 would be on par with 2019. -
May 4, 2021Apple’s privacy rollout: A trial for regulators
Flash Report, ReportsApple this week rolled out new restrictions on the collection of mobile user data by third-party businesses. From Monday, all apps submitted to the App Store must enable the App Tracking Transparency (ATT) program, which requires app owners to display an opt-in window by default before tracking users across third-party sites: Apple says it will ban apps that offer users rewards for enabling tracking. Developers estimate that around 80% of users may opt out, upending advertisers' ability to follow high-value iOS users across multiple apps and services. This lucrative pool of more than a billion mobile users is more robust than ever, with Apple reporting a 66% jump in iPhone sales last quarter. -
April 29, 2021Deals not quite done: 5G spectrum auction final results
Flash Report, ReportsThe main part of the second UK 5G spectrum auction completed on 17 March 2021, with the nature and number of blocks won by each operator decided, and we discussed the results and implications in End-of-line spectrum 50% off: UK second 5G auction results. This morning (27 April 2021) Ofcom announced the final results of the auction, which incorporates the assignment stage, i.e. deciding which particular blocks of very similar spectrum each operator receives, as well as announcing a proposed spectrum trade (still subject to Ofcom approval) between Vodafone and O2. -
April 29, 2021The push for OpenRAN: Careful what you wish for
Flash Report, ReportsThe term ‘OpenRAN’ covers both the separation of hardware and software across different RAN (Radio Access Network, the 'last mile' of mobile networks) elements (essentially the boxes that sit next to the antenna, at the bottom of the antenna, and/or in a nearby exchange), and having open interfaces between these elements in a variety of configurations. If this is standardised (i.e. standardising the hardware/software split and the APIs), this would allow the 'mixing and matching' of different vendors within an operator's RAN; while many operators currently have more than one RAN supplier even within a single country, these are separated geographically, and on any given site equipment has to be replaced or upgraded (to 5G for example) using equipment from the original supplier. -
April 29, 2021Netflix Q1 2021: Muted growth, but after a massive 2020, does it [...]
Flash Report, ReportsGrowth is down but the benefits from COVID-19 have been banked and are enduring
Netflix added four million subscribers (net adds) in Q1 2021, compared to 15.7 million in Q1 2020. As we have noted in previous reports, 2020 was the most abnormal, fertile and opportune environment imaginable for streaming services—see the growth of Disney+—pulling forward new subscribers, delaying churn, and allowing Netflix to add 36.6 million net subscribers globally (versus 18.2 million in 2019). All, while pushing up engagement levels as linear competition was disproportionally hobbled by production shutdowns and out-of-home entertainment was put out of action. -
April 21, 2021Super League, super backlash: Naked power bid over European compe [...]
Flash Report, ReportsOn Sunday, 12 football clubs announced they were launching a new European league with an inaugural season “as soon as practicable”. The 12 Super League clubs include six English teams (Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur), and three Spanish teams (Atlético Madrid, Real Madrid and Barcelona) and three Italians (Inter and AC Milan plus Juventus). -
April 19, 2021Spotify Loud & Clear: 5% of artists generate above $1,000 in [...]
Flash Report, Market Outlook, ReportsSpotify paid $5 billion in royalties last year to the music industry. Critics claim the $0.0038 per-stream average royalty rate is too low. However, this is largely due to high volumes of ad-funded listening, a core part of Spotify’s freemium model, and a defence against piracy. To silence the critics, the “Spotify Loud & Clear” site presents data on the distribution of industry royalties, which are heavily skewed to established artists. Only the top 5% of artists generate annual industry royalties above $1,000, though they take home less under their deals. -
April 6, 2021Sky and football: Italian wager on aggregation
Flash Report, ReportsThe contract includes exclusive coverage of seven weekly games (including top picks) and non-exclusive rights to the other three fixtures, for €840 million per year. In the current cycle DAZN holds three games per week for €193 million. Crucially, DAZN has displaced Sky as the lead broadcaster, displaying a dramatic shift in strategy. -
March 26, 2021Mail scoops Telegraph print advertising: Telegraph outsourcing fo [...]
Flash Report, Reports- The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy
- Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry
- Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated
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March 22, 2021UK full fibre regulation: The mist clears…somewhat
Flash Report, ReportsOfcom’s full fibre regulation statement, released today, is largely as trailed, i.e. it allows BT’s Openreach considerable relaxation of wholesale pricing in return for building out full fibre.
On the longer-term regulatory prospects, Ofcom continues to be fair but more obtuse than it could and should be, unnecessarily dampening investor enthusiasm. Ofcom will decide on a case-by-case basis whether to allow Openreach to offer geographic/volume discounts, using slightly contradictory principles.
The publication and increased certainty may allow BT’s Openreach to extend its full fibre roll-out further, faster or even with external financing. The build plans of others will come under increasing question.
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March 18, 2021
End-of-line spectrum 50% off: UK second 5G auction results
Flash Report, ReportsProceeds in the swiftly concluded second 5G auction were £1.36bn, very much towards the bottom end of the estimated £1-2.7bn range in our recent report 2021 spectrum auction: Uncertainty prevails [2020-117]. The prices paid are very low by historic standards, particularly for the 700MHz band but the spectrum most suitable for 5G (3.6-3.8GHz) is also more than 40% below the price achieved in the auction for very similar spectrum in 2018. -
March 17, 2021ITV FY 2020 results: Waiting for lockdown to end
Flash Report, ReportsITV’s advertising revenue was down 11% in 2020—probably a relief given the unprecedented depths the TV ad market found itself in during April-July. However, the current lockdown has stunted advertising’s recovery and its trajectory will continue to be tied to the loosening of the same restrictions that continue to dictate movement and spend. It is not until April that ITV forecasts (+60-75% YoY) that money will rush back into the TV ad ecosystem, looking to make up for lost time. -
March 16, 2021Into the wild: Facebook prepares for a world without trackers
Flash Report, Reports- Facebook emerged from 2020 reporting record revenue growth of 22% over the year, built on its huge volume of usage, its simple buying tools and its trove of first-party data
- Facebook’s ability to match third-party data for targeting and attribution is also central to its success. However, Apple and Google are restricting data-matching tools like third-party cookies and mobile IDs, and Facebook is moving to minimise the damage
- Facebook is trying to turn its sites into storefronts by launching ‘Facebook Shops’. It is also taking public stands on the use of data for advertising, and on the need for brand-building in marketing plans. These are conversations all advertisers and media owners should be engaged with
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March 16, 2021Decarbonising Work
Flash Report, Reports- Growth in the UK production sector is being driven by increased investment by American streaming services, while local broadcasters rely on co-productions to fund increasingly-expensive, high-end content
- However, while this investment is welcome, the output is predominantly less ‘British’ than that commissioned directly by local broadcasters
- Distinctive and diverse British cultural touchpoints are created or perpetuated by television. Current trends suggest a dilution of this, a globalisation of local content, and perhaps less relevance to British viewers
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March 11, 2021Outsourcing culture: When British shows aren’t ‘British’ [...]
Flash Report, Reports- Growth in the UK production sector is being driven by increased investment by American streaming services, while local broadcasters rely on co-productions to fund increasingly-expensive, high-end content
- However, while this investment is welcome, the output is predominantly less ‘British’ than that commissioned directly by local broadcasters
- Distinctive and diverse British cultural touchpoints are created or perpetuated by television. Current trends suggest a dilution of this, a globalisation of local content, and perhaps less relevance to British viewers
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March 10, 2021DMGT reinforces consumer science: New Scientist joins Mail stable
Flash Report, ReportsThe sale represents an impressive increase in value: New Scientist was offloaded by RELX in May 2017 for £17.7m (c.4.4x EBITDA), 1 an all-in sale price c.£21m. -
March 9, 2021Virgin Media: Subscribers strong, ARPU tough to turn
Flash Report, Reports- Virgin Media’s subscriber growth continues to be very strong, and it looks like next quarter’s price rise will (at worst) only stall, not stop, the renaissance
- ARPU was hit in Q4 by the postponed price rise, and it will likely remain in decline in 2021, with regulatory pricing pressure and lockdown effects still weighing, despite firm new customer pricing
- Nonetheless, accelerating subscriber growth is expected to drive group revenue growth positive again (helped by B2B growth), and Virgin Media’s main strategic problem—its fibre trilemma—looks like it will be dealt with after the merger with O2, expected
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March 4, 2021Telco Half Year Results Reflect COVID Impact: Updated Forecast
Flash Report, ReportsTelstra, Optus, TPG, Vocus, Aussie Broadband, Uniti and Superloop have all announced results for the December half, with COVID19 looming large.
The impact of COVID19 significantly affected the results. But this also means that recovery from COVID19 as immunisation programs roll out in 2021 will have an opposite effect. In this report, we have picked up some key numbers from these result announcements, and have discussed what it means for these telcos themselves, the implications for the industry in 2021, and how these affect Venture Insights’ forecasts for the Australian telco sector.
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March 2, 2021
(UK) Learning from “The Independent” : Sustainability [...]
Flash Report, Reports- In a challenging media marketplace, quality online news services generated hundreds of thousands of new buyers in 2020, perhaps inching ahead of print in terms of UK household propensity-to-pay
- But reader-first models are not only about subscriptions. The UK’s first national print title to go online-only, The Independent, has achieved operating profits since reconfiguring its cost base in 2016
- The Independent defies many investor assumptions about news. Solutions for smaller businesses may diverge more from industry giants than is commonly expressed, and without distribution change, editorial, product and commercial transformation is slower
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March 2, 2021
Serie A rights auction: Sky ready for radical revamp
Flash Report, ReportsSerie A held a formal auction in January where reserve prices were not met by bidders. Since then, it has entered into direct negotiations with potential buyers. Two rival deals have emerged. Reportedly, Sky is offering €750 million per year for all ten weekly games. -
February 24, 2021Google and Facebook lay out diverging news strategies: Battlegrou [...]
Flash Report, ReportsGoogle is demonstrating support for news by stepping up its efforts to license content from publishers and provide unpaywalled access within its Google News app—an attempt to diffuse regulatory pressure.
Google is reconfiguring its relationships with publishers worldwide, putting $1 billion on the table to license news content to News Showcase through a series of flat fees over a set period of time.
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February 9, 2021Amazon and sports rights: Gaining confidence
Flash Report, Reports- Thanks to lockdown momentum, Amazon Prime Video grew substantially in 2020. Christmas time coverage of the Premier League seems to have played a part, informing Amazon’s approach elsewhere
- Upping its game, Amazon has acquired more expensive Champions League rights in Germany and Italy. It also bid in Monday’s failed French Ligue 1 auction
- In the impending Premier League tender Amazon may be ready to increase its outlay if needed to meet subscribers’ expectations, but without any real incentive to challenge Sky and BT’s dominance
