Market Outlook

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    January 15, 2020

    Video Entertainment Market Outlook

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    We forecast the Australian video market to remain flat at about A$5.8bn through to 2023 even as the mix of revenues and consumption changes from traditional video to digital video platforms. While we don’t expect the size of the video entertainment market to change materially, we forecast household spending on video to decline gradually driven primarily by the revenue deflation from traditional to digital platforms. The launch of multiple new SVOD platforms in 2019 and 2020 will increase the competitive pressures on traditional platforms and accelerate the shift away from linear viewing. 

  • January 9, 2020

    Bopping along the bottom: European mobile in Q3 2019

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    European mobile revenues remain decidedly in decline this quarter at -2% – a slight worsening since Q2 as the full force of cuts to intra EU calls hits. There are signs that dual brand strategies may be reaching their useful limit as erstwhile premium customers shift to value. There is scope for some trends to slowly improve from here, although end of contract notifications will impact all markets before the end of 2020, with the UK first off the blocks in Q1.
  • December 13, 2019

    UK broadband, telephony and pay TV trends Q3 2019: Darkest before [...]

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    Market revenue growth fell in Q3 to below 1%, and may drop below zero next quarter as existing customer pricing comes under more pressure. New customer pricing is however rising, and average pricing should rise much further as ultrafast increases in availability and popularity. Political enthusiasm for full fibre should be welcomed, although some specific plans are likely to do more harm than good if implemented literally
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  • December 11, 2019

    UK mobile market Q3 2019: Weathering the storm

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    The UK mobile market suffered its worst performance in six years this quarter as competition heated up and regulation continued to bite. Vodafone’s unlimited tariffs have proven popular, reaching 5% of its contract base in one quarter, helping to drive its outperformance. Some reprieve is in prospect next quarter, before the impact of out-of-contract notifications and automatic discounts from February, although there is the possibility of pre-emptive moves bringing some of the effects forward
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  • November 27, 2019

    Australia Out-of-Home Market Outlook

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    The Australian Out-of-Home (OoH) market has been growing continuously for the past eight years at a CAGR of about 9%. Going forward, we expect the OoH market to grow at a 5.4% CAGR through to 2023. This growth will be primarily driven by growth of Digital Out-of-Home, which will be further driven by improving programmatic advertising and new and innovative audience targeting solutions. We forecast that Digital Out-of-Home (DOOH) will grow at a 14.3% CAGR from 2018 to 2023, reaching A$869mn by 2023 and representing 76.5% of the overall OOH advertising expenditure, while Physical OOH will decline at a -9.2% CAGR from 2018 to 2023, reaching A$275mn by 2023 and representing only 23.5% of  overall OOH revenues.

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  • November 26, 2019

    Local UK media at a crossroads: from incremental to radical innov [...]

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    Local newspapers are often identified as the most disrupted of all media. The impact of declining news media has widespread implications: for the healthy functioning of democracy, community and social cohesion as well as for local business and trade. In this report we look briefly at the existential state of local news media, and spell out a radical new approach that would require a complete rethink of local journalism and its commercial and operating models. We reimagine local media as a start-up would, rather than as incumbents with expensive models to maintain.
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  • November 20, 2019

    Consumer magazine publishing in the UK

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    Long-known market trends have become even more accentuated: circulation decline is -13% (consumer spend decline is c. -3%); print advertising is down -12%, with online advertising spend up a mere 1% (see pages 3, 11)

  • October 8, 2019

    Australian Data Centres and Submarine Cables Report

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    The Australian data centre (DC) market is rapidly expanding, forecast to reach over A$3bn by 2026 with nearly 1,200 MW of capacity. Current revenues are A$1.5bn with 530 MW capacity. Currently, a majority of data stored in outsourced DCs are from enterprise and government clients. However, the market is moving towards the hyperscale segment, due to ongoing shift to cloud-based computing. We predict hyperscale to generate 35% of total DC revenue in 2026, occupying 50% of total supply. The major providers of DC capacity in Australia are a mix of international players and Australian based DC specialists. We predict that relative market shares of these players will converge over time due to relatively small areas of product and service differentiation.Driving the DC market is the submarine cable industry with four new cables planned. Perth and Brisbane are key growth areas, while Sydney will continue to remain the market leader by a large margin. A cable landing station was completed in Sunshine Coast in September 2019.
  • September 23, 2019

    European mobile in Q2 2019: No real let-up

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    European mobile revenue trends are not yet improving. Italy is still flat-lining at almost -10%, Spain worsened again, and the UK deteriorated sharply. France is the only good news story. 5G rollouts seem somewhat tentative. Indications from the UK that it is leading to a more competitive environment may discourage European operators from exacerbating already challenging markets. Prior year comparables for Southern Europe will be more flattering in the second half of this year although a doubling in the drag from intra EU calls will dampen any recovery
  • September 9, 2019

    UK mobile market Q2 2019: Reality bites, and will bite some more

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    The UK mobile market suffered its worst performance in five years this quarter with Vodafone alone, somewhat inexplicably, bucking the trend.5G capacity is impacting pricing trends with SIM-only packages flattening and unlimited packages increasing in popularity and complexity.As the operators invest in solving rural coverage and rolling out 5G, they will continue to be hit by regulation. Out-of-contract notifications and discounts are next in a long series of assaults.
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  • August 7, 2019

    Australian Advertising Market Outlook 2019

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    Venture Insights expects total advertising spend to grow at a 3.2% CAGR to $18.7bn in 2023. Digital, while being the largest growth driver for AdEx in Australia, will see its growth moderate in the coming years. Programmatic and addressable TV solutions, along with BVOD, will help traditional broadcasters offset part of the structural decline in television advertising.
  • July 9, 2019

    RegTech: a new Australian export?

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    Though starting of as an offshoot of Fintech, RegTech has applications beyond financials services in regulated industries such as education, agriculture, law and more. The Industry is being driven by increasing regulatory burden and technology innovations. Australia dominates the Asia Pacific region, and is seventh in the world in terms of RegTech deal activity.  
  • July 1, 2019

    Reader-first news media: From transition to transformation

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    The number of people willing to pay for online news now roughly matches print paid circulation, and will soon be substantially greater, with publishers increasingly demonstrating that their strategies are influencing industry outcomes. Our thesis is that subscriptions work in some cases, but that a more systematic reader-first approach benefits all cases, recalibrating management focus to media’s core purpose. Effectively implementing such an approach is a more radical, transformative development than is sometimes assumed. The winners will deploy sophisticated, bespoke audience acquisition and retention funnels and undergo detailed appraisals of the trade-offs necessary for optimal user experiences.
  • June 25, 2019

    European mobile in Q1 2019: Toughest conditions in four years

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    European mobile service revenue growth slipped again to -2.0%; its worst performance in four years.Regulation limiting intra-EU call prices could hit hard next quarter – with the UK likely to be hardest hit by up to 6% of revenues and 20% of EBITDA. Excluding the EU-call impact, we see greatest scope for improving trends in Italy and France thanks to easier comps and diminishing competitive intensity.

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  • June 18, 2019

    UK broadband, telephony and pay TV trends Q1 2019: Price wars dom [...]

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    Market revenue growth dipped to around zero in Q1, with fierce competition on new customer pricing the major factor. All four of the big operators now suffer from declining ARPU, with existing customer price rises increasingly hard to land given falling prices for new customers. The rapid move to superfast is not helping as much as it should; the operators will hope that they fare better with the move to ultrafast.
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  • May 13, 2019

    Sky UK Q1 2019 results: weak ARPU hits bottom line

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    Sky made a surprisingly weak start to 2019, with revenue growth decelerating to 1.9% (the first time below 4% since the European businesses merged in 2015), due to weaker ARPU trends. However, Sky expects improvement to follow, blaming one-off factors in the quarter. The ARPU weakness drove EBITDA down 11.3%, but this should bounce back across the rest of 2019 as football rights costs turn from a drag to a positive. Comcast highlighted collaborations with Sky across tech, advertising, content distribution and even news, stating it is on track to achieve the anticipated $500 million in annual synergies over the next couple of years
  • May 7, 2019

    Sports streaming and 5G – everyone wants in…

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    Live sport remains an important content genre with the ability to attract consumer eyeballs and improve customer loyalty for both telcos and TV operators. However, TV operators (FTA and Pay TV) which until recently were the undisputed leaders in providing sports content, are being disrupted by sports streaming apps and telcos.
  • May 6, 2019

    UK Online media monetisation

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    The commercial challenges for media online are well-documented: online advertising pays for utilities such as search and social networking many times over, but not for media beyond user-generated content and low-investment journalism. There are also costs from a user perspective: wasted time, harmful content created to attract views, and the collection, sale, use and frequent leakage to criminals of personal data. Different sectors have found varying success with alternatives: games, video and music are attracting user payments, driving the paid online economy up 15.5% to £8.2 billion in 2018.
  • May 3, 2019

    Disney+ and Hulu: a flexible pitch to consumers

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    Disney now controls third-party content aggregator Hulu, which has 25 million subscribers in the US. Ramped up by Fox content, Hulu’s operating losses are expected to peak in FY2019 at $1.5 billion, with profits by FY2023 or FY2024. Serving only Disney content, Disney+ launches in the US at the low price of $6.99/month this November, and in 2020 in Europe and Asia Pacific in 2021, aiming to reach the challenging goal of 60-90 million subscribers in five years. ESPN+, Hulu, Disney+ combined could contribute 13% of Disney’s revenues by 2024, which does not intend to disturb existing channels and windows for catalogue and new content, aside from withdrawing content from Netflix.
  • May 2, 2019

    The new lifespan of UK TV content: wearing out more quickly

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    The economic model of TV production relies upon a vibrant market for back catalogue content; programming that has traditionally driven the desirability of many linear channels and slots. New release strategies, along with the hyper-concentrated viewing encouraged by video-on-demand and the round-the-clock availability of shows calls the longevity of the value of content into question. Our analysis suggests that programmes that previously would be leisurely distributed through broadcast could now feasibly be “worn out” more quickly. This could have ramifications for the whole sector, with more content investment required “upfront” and new financial and distribution models required.
  • May 1, 2019

    Say goodbye to SIM cards – the rise of eSIMs

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    The conventional SIM card has been integral for device connectivity for almost three decades. The arrival of eSIMs will remove space constraints greatly benefiting IoT devices and wearables. Although eSIMs can be seen as a threat to telcos - as they enable a more efficient churn process - we believe the benefits of eSIMs outweigh the risks.
  • April 29, 2019

    UK Out of Home: opportunities and threats crowd the doorway

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    Out of Home (OOH) is bucking the trend in UK traditional media and continues to grow, driven by the digitisation of inventory as the paper estate recedes. Digital OOH now accounts for 50% of total OOH ad spend. Soon digitisation will slow, as much OOH inventory cannot be converted from posters to digital screens; sustained growth will require a different form of change. The industry is amidst structural shift – driven by consolidation and automation – which could be wholly positive, but a lack of cooperation between major players risks stifling innovation and the medium’s growth.
     
  • April 23, 2019

    5G to change the shape of UK mobile

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    The capacity boost with 5G will be more important than any speed or latency uplift. We estimate a 7-fold increase in mobile capacity in the UK and 13x+ for O2 and H3G. We view fixed mobile substitution products as quite niche although the number of mobile-only households is likely to creep up. mmWave would have the capacity to substitute for fixed but has many hurdles to overcome. Capacity-constraints have tempered competition of late and their removal risks an increase in intensity, especially as H3G views itself as sub-scale – good for policy makers but another challenge to add to the industry’s woes.
  • April 17, 2019

    Cinema market trends 2019 – Australia and New Zealand

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    Cinema revenues in Australia are projected to decline gradually over the next 5 years primarily due to cheaper substitutes on offer for consumers. Netflix has paved the way for cinema disruption and distributed 75 original films in 2018. Fellow disrupter MoviePass has continued to struggle due to an unprofitable business model.