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November 11, 2019UK’s BT: Bumps on the road to recovery
Focus Report, ReportsBT 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. -
November 8, 2019Streaming wars and the future of Foxtel
Focus Report, ReportsUp 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, 2019Champions League rights auction: BT’s cost-cutting opportunity
Focus Report, ReportsChampions 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
November 4, 2019Peak football revenues and post-boom scenarios
Focus Report, ReportsBroadcast licensing revenues for football are likely to be ex-growth in the top five markets in Europe, with some limited upside from sponsorship and out-of-Europe rights. The broadcast revenue boom stoked the rise of super clubs with global fan bases, feeding player transfer valuations, and a potential downturn of the latter could magnify the impact of the revenue decline. The leagues in Italy, France and Spain are more exposed to the risks of broadcast licensing revenue decline, while the Premier League’s model looks robust
October 31, 2019Australian MVNO Market Overview
Focus Report, ReportsOn 29th October 2019, Venture Insights presented their views on the Australian MVNO market at Telstra Wholesale’s Business Connect conference in Sydney.Global MVNO market size is expected to nearly double between 2018 to 2025, growing at CAGR of about 8%.The Australian MVNO market has grown from 1.5m subscribers in 2010 to 3.2m subscribers in 2018. MVNO subscribers have grown at a CAGR of 10% (2011-18) compared with MNO handset subscribers which have grown at a CAGR of 0.9%. However, MVNOs have over 20% in metro areas – demonstrating continued market focus on pricing. In addition, our survey results showed strong future demand for MVNOs. ~40% of metro respondents who were considering shifting, indicating they would select a MVNO. As such, we expect MVNO subscriber market share to continue to rise especially in metro areas. With a focus on niche segments or linkages to strong brands, the test of most MVNOs is (i) how well they know their target customers, (ii) what other services could be bundled and (iii) are there new market segments to target.Sector Telecom.
October 30, 2019Webscale Playbook: Alphabet
Focus Report, ReportsAlphabet is out to prove that it is more than just an advertising business. That’s important as the company remains heavily exposed to ads, which accounted for about 86% of 2017 revenues. Yet, Alphabet is facing new competition in ads from Amazon, plus ongoing regulatory scrutiny in Europe. Fortunately the company is generating incredible amounts of cash each quarter, and now has just under $102B in cash & stocks on hand. That has allowed the company to invest heavily in its network, with capex amounting to a telco-like 17.2% of revenues over the last four quarters. Alphabet also spends another ~15% of revenues on R&D. The goal of these investments is help the company enter (or create) new markets, with less ad-dependent business models. Alphabet’s vast network infra supports the company’s cloud computing and device portfolio, as well as AI-based projects in transportation (Waymo), logistics (Project Wing), and healthcare (Verily). As a result, Alphabet’s network, IT & software capex has soared, to $8.2B over the 4Q17-3Q18 period (from $4.1B the year prior).
October 28, 2019UK SVOD subscriber trends: who is buying and how many subs
Focus Report, ReportsWith a raft of new streaming services about to hit, there remains a question as to the appetite for multiple subscriptions. Pay-TV subscribers continue to be more likely to take SVOD services—especially when they are distributed on their set-top boxes—however the average number of services per household is well below one. Greater variety and quality of services will likely increase the average number of subscriptions but given the siloing nature of these services, Netflix’s incumbency, library and distribution are its strength; new entrants will battle for a supplementary role
October 24, 2019Webscale Playbook: Alibaba
Focus Report, ReportsAlibaba, once viewed as China’s answer to Amazon, has grown into a giant since its inception in 1999. Though still just about a fifth of Amazon’s size (by revenues), Alibaba has grown rapidly and outshines Amazon in some areas. Its scale in e-commerce is impressive: (i) Alibaba ships 12 million packages a day, 4x of Amazon; and, (ii) Alibaba’s “Singles Day” has become the world’s biggest shopping event. Alibaba has invested heavily in network infrastructure to support its businesses, not just e-commerce but also cloud computing, audio/video streaming, and devices. As a result, Alibaba’s network-related demand has soared in the recent times. It now accounts for over 5% of global webscale network/IT capex, from about 1% in 2012. Alibaba’s network spend share will continue to grow, but will be reshaped by the ongoing US-China trade war.
October 23, 2019UK Telecoms sector returns: Money’s too tight to mention
Focus Report, ReportsMobile sector returns are low, particularly for smaller-scale operators, with H3G earning less than its cost of capital. Regulatory initiatives, spectrum auctions and 5G look set to worsen this picture as H3G strives to gain viable scale. Back-book pricing is crucial to the returns of fixed challengers. Regulatory intervention is likely to lead to a waterbed effect in the fixed sector and exacerbate challenges in mobile. New entrant business case in full fibre is limited to de facto monopoly opportunities. There is the potential for BT’s returns to increase markedly if it gets full fibre right but new entrants’ inferior economics are unlikely to offer sufficient investor appealSector Telecom.
October 22, 2019Programmatic OOH: Coming soon to a billboard near you?
Focus Report, ReportsProgrammatic advertising in OOH is still a new concept in Australia and the groundwork in terms of digitisation and audience measurement is still being laid. While, many OOH players have introduced their version of programmatic advertising, the risk of having a fragmented market with multiple proprietary systems means that programmatic OOH may fail to take off. Outdoor, or out-of-home, advertising is distinct from other forms of advertising. It is highly visible, often very large, and placed in heavily trafficked areas in order to attract as many viewers as possible. Moreover, unlike television, radio, print, internet, and mail advertising, outdoor advertising cannot be turned off, put away or easily avoided. Traditionally OOH was mostly a real estate or location play but with digitisation, it’s now becoming increasingly focused on audience targeting and improving engagement. Industry players are looking to bring additional functionality, formatting and effectiveness to advertisers beyond just digitising existing sites, along with investing in improving measurement technology to help build further advertiser confidence in out-of-home. In particular, programmatic advertising which has transformed the online advertising space could play an important role in the growth of the OOH market going forward. In this report, we explore what programmatic advertising is and the impact it could have on the OOH market. We also look at the key challenges that OOH players face and the risk of Google, a global leader in programmatic advertising, making an entry into the OOH market.Sector Media.
October 17, 2019Global & Australian gaming market trends – mobile, cloud a [...]
Focus Report, Free Sample, ReportsMobile gaming is now the dominant driver in the global gaming market accounting for more revenue than console and PC combined and the majority of all growth. This shift has been enabled by improvements to internet infrastructure, from stronger mobile networks to faster wireline bandwidth to better cloud-based delivery models; however, there hasn’t been a significant amount of direct monetisation by telcos, as they have only dipped their toes, at best, into this new source of demand.Sector Media.October 15, 2019Shared Infrastructure Models and O-RAN Vendor Disruption
Focus Report, ReportsWith mobile network operators facing increased network spend and still defining incremental 5G revenue opportunities, Venture Insights believes it is time to look again at network sharing models. In particular we believe a focus on regional RAN sharing and small cells may be targets for either joint venture or neutral host players. Venture estimates that Government (States/Federal) and Industry spend at the end of round 6 of the blackspot program could be as high as $1.2B. Plus there is additional regional connectivity spending from states around Australia. Examples of blackspot funding for regional rail projects highlight the lack of benefits for all end customers from non-shared network projects versus shared. If Governments continue to heavily subsidise regional network coverage then they should consider the customer benefits of active RAN infrastructure sharing and the use of train repeaters to maximise investment outcomes. In addition, since these networks are capable of wireless and fixed wireless solutions, these network models should also consider the role of NBN.Sector Telecom.
October 14, 2019Women’s sport: inching towards the UK media mainstream
Focus Report, ReportsMedia coverage of women’s sport escalated this summer thanks to the 2019 FIFA Women’s World Cup, which ignited national interest. The Lionesses attracted an exceptional peak TV audience of 11.8 million for England’s semi-final match against the USA. Still, coverage of women's sport remains minimal outside of major events: only 4% of printed sports articles reference female athletes. Quality press are leading the way—the launch of Telegraph Women’s Sport being the prime example—but the popular press are yet to follow. Freely-accessible coverage will generate greater interest and audiences for women’s sport, but continuous investment from all media will be needed to fulfil its potential.
October 10, 2019UK BVOD advertising: on-demand in demand
Focus Report, ReportsBroadcaster video on demand (BVOD) advertising is in demand with an £89m rise in 2018 spend to £391m, and is predicted to double within the next six years. The rise of on-demand viewing has created a scaled advertising proposition with a strong 16-34 profile – a relief for both broadcasters and advertisers, given the long-term decline in linear TV impacts for younger audiences. Big challenges remain: linear TV ad loads look excessive in on-demand, BVOD CPTs can be off-puttingly high, and measurement is still unresolved. BVOD is a welcome bright spot which faces online video competition head-on, but it won’t be able to turn broadcasters’ fortunes around alone
October 4, 2019Follow the Money – Australian VC in Tech
Focus Report, ReportsVenture Capital funding continues to offer potential for growth in Australia, despite reaching new peaks in aggregate capital in 2018. Overseas funds continue to maintain their contribution levels to total funding, while local institutions have also joined the fray. Australian has a thriving startup ecosystem which is driving growth across all parameters such as funds raised, funds deployed, revenue metrices and exits.
September 25, 2019eSports and 5G – can telcos cash in…
Focus Report, ReportsThe value of the eSports market is growing rapidly with both viewers and the prize money at stake beginning to rival that of traditional sports. With 5G’s ultra-fast data speeds and minimal latencies, there is an opportunity for telcos to carve a piece of this growing market. eSports could therefore emerge as an important use case as telcos look at extracting a revenue premium from their 5G networks. eSports or electronic sports commonly refers to multi-player video games played competitively. Fans can watch professional gamers compete or play themselves. Professional level gamers compete in tournaments, which are hosted at arenas or stadiums in front of a live audience. Games are often broadcast live and many more global eSports fans watch these tournaments remotely by streaming them online. Some of the most notable tournaments include League of Legends, The International, Evolution Championship Series and the Intel Extreme Masters. Most major competitions are generally held in South Korea, Europe, USA and China however eSports tournaments are starting to gain traction across the globe. In the past few years, eSports has seen significant changes from being played in small groups, to occupying world-class stadiums which accommodate tens of thousands of fans, with many more viewers online. The value of the eSports market is growing rapidly with both viewers and the prize money at stake rivalling that of traditional sports. As the first digitally-native sport, eSports is primarily streamed online and is most popular with younger male audiences. With similar properties to traditional sport, the opportunity to engage with these hard-to-reach millennials is appealing to advertisers, traditional broadcasters and traditional sports teams alike. But while eSports viewership is growing, Australian broadcasters have had limited success which has left the door open for Australian telcos to enter this space. Furthermore, the rise of 5G could alter the eSports landscape with higher data speeds, lower latencies and next gen AR and VR gaming platforms. Venture Insights conducted a mobile consumer survey focused on consumers and their eSports viewing and playing habits. In this report, we look at the results from our survey, why and how 5G could play a role in the rise of eSports, the role that telcos could play and global trends on 5G and eSports.
September 19, 2019Use cases for AI in Telco: An era of mainstream adoption
Focus Report, ReportsMany tier 1 telcos have begun to implement AI initiatives to build and operate their network, sell more efficiently and improve the customer support experience. Based on our industry interviews, we expect increasing competitive intensity in the telco market to drive increased adoption of AI beyond the largest incumbents and into RSPs
September 12, 2019Stakeholder management – where to from here?
Focus Report, ReportsThe Business Roundtable (United States), has recently revised its ‘Statement on the Purpose of a Corporation’ and walks away from the age old ‘shareholder primacy’ mantra. This new Statement re-positions the purpose of the corporation to include a focus on all stakeholders, rather than placing shareholders above all others. We believe this represents a significant symbolic turning point and will commence the process towards a new dissertation for the ‘Modern Corporation,’ apt for living in the post-industrial age. Our report revisits this age-old debate and provides insights for technology companies living in the 21st century.
September 5, 2019AI in ANZ: Our coolest homegrown startups
Focus Report, ReportsAI is expected to be the next revolution in computing with broad commercial applications. This has resulted in a significant amount of private investment flowing into the industry with funding in ANZ growing by 70% CAGR to reach $48mn.
August 7, 2019Do EVs change everything, and by when?
Focus Report, ReportsVenture Insights hosted a webinar with leading city planning experts Nic Frances Gilley (Councillor, Chair of the Transport Portfolio, City of Melbourne), Deb Cailes (Acting Director, City Strategy and Place, City of Melbourne) and electric vehicle expert Johan Karlsson (Head of New Technology, DC Power Co) to discuss the future of electric vehicles in Australia. The topic for discussion was “Do electric vehicles (EVs) change everything, and by when?”. Certainly, the view from the guest speakers and Venture Insights is that there will be an aggressive adoption of Electric Vehicles in Australia. In a world focusing on climate change and emission reduction, renewables will be the main source of energy in the future.
June 24, 2019Advertising Pays 7: UK Advertising’s Digital Revolution
Focus Report, ReportsOnline advertising plays a larger role in the UK economy than anywhere else in the world, having grown hand-in-hand with the highest ecommerce spend per capita and a business creation boom. There are many factors behind this success, access to investment and top talent (both technical and creative) structural characteristics in the economy and society—not least a culture of experimentation and entrepreneurship. As with all maturing industries, sustaining future growth will bring new challenges: along with economic headwinds, UK online advertising now faces an urgent need to restore public trust, with a combination of statute and self-regulation.
June 18, 2019Batteries powering our residential homes
Focus Report, ReportsThe cost of retail electricity is a hot topic in Australia, exacerbated by more frequent and volatile weather events and a rapid shift from traditional fossil fuels towards renewables. Considering that residential solar panels have reached 20% penetration, and this is set to grow to 50% over time, we believe that they have reached ‘mainstream’ market adoption with steady growth in panel installations likely to continue. As such, the discussion now shifts to the installation of batteries which will further shift the energy supply mix toward renewables in Australia. With the price volatility of retail electricity, there is an increased focus by governments and households on different ways to cut costs across the energy supply chain, from distributors to end users. This report looks at how and when battery technology will be adopted and forecasts the potential impact this could have on the consumption of ‘grid’ electricity.
May 22, 2019‘Is Orange the new Bank?’ Telcos and Fintech
Focus Report, ReportsAs OTT services grow in value, telco revenues are moderating and the lack of growth opportunities in the core business is driving telcos to look at adjacencies. Fintech is disrupting traditional financial services and offers a high value adjacency for telcos to play in where they can maximise their natural strengths.
May 16, 2019Australian Fintech Breakfast Roundtable: Fintech ready to disrupt [...]
Focus Report, ReportsOn May 14th 2019 Venture Insights hosted a Fintech Breakfast with a number of prominent members of the Australian fintech community. The breakfast centred on Venture Insights’ latest Fintech consumer survey which analysed the attitude of Australians to the incumbents and the challengers.
