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February 26, 2020UK Media consumption: The ‘surprising’ endurance of broadcast [...]
Market Outlook, ReportsDespite two decades of online disruption, the UK remains reliant on traditional platforms and brands across the media sector—more so for older cohorts, but also for younger generations. 13% of adults still do not use the internet and, in reality, an online-only media ecosystem remains a distant prospect. Traditional providers, particularly within TV, radio and news, look set to endure for the long term, aided by the trajectory of the UK’s ageing population -
February 25, 2020Insurtech White Paper Part II: Australian Insurtech Market Overvi [...]
Focus Report, ReportsThis is the second of three reports in Venture Insights’ series on Insurtech, following on from our discussion of trends in global insurtech.Sector Technology. -
February 24, 2020Show me the money – broadcasters and sports rights on an unsust [...]
Focus Report, ReportsIt is Venture Insights’ view that traditional Australian broadcasters will be unable to fund further increases to the cost of tier one sports as they continue to suffer from declining revenues in hyper-competitive markets. As such, premium Australian sports are likely to further split their rights, selling portions to non-traditional telco or tech players. In the long-run, Australian sports may even look at selling their content direct to consumer through ‘over the top’ distribution models. -
February 21, 2020Seven 1H20 update – revenues fall in a declining market
Flash Report, ReportsIn this report, we briefly analyse the reported 1HFY20 earnings for Seven West Media and highlight some of the key trends across its businesses.Sector Media. -
February 20, 2020Consumers endorse Disney’s digital transition
Focus Report, ReportsRecruiting 29 million subscribers in twelve weeks, Disney+ has stormed the US market. Furthermore, the two million gain achieved after the holidays and the completion of The Mandalorian, relatively high ARPU, and rising Hulu and ESPN+ subscriptions bode well. Conversely, booming (but expected) losses of direct-to-consumer platforms—due to increase as Disney+ launches in Europe in March—are undermining group profitability -
February 19, 2020Telstra and Optus: Falling ARPUs, increase in price sensitive mar [...]
Focus Report, ReportsTelstra and Optus reported earnings on 13th February 2020. While Telstra reported its 1HFY20 earnings, Optus reported its 3QFY20 earnings. In this report, we have analysed some of the key trends observed across the two major telcos and compared these with Venture’s Australian telco market outlook and forecasts. -
February 17, 2020Vodafone plods on
Focus Report, ReportsVodafone’s revenue performance remains decidedly lacklustre. Italy and Spain are struggling to bounce back, Germany is still languishing, and the UK’s 0.6% service revenue growth is the highlight of the quarter. Liberty Global’s assets are disappointing both in terms of opening financials (revenues and EBITDA 8% and 12% lower than expected respectively) and outlook (now growing at half the rate at the time of deal announcement and guidance for Germany as a whole to be ‘flattish’). Vodafone’s guidance for a pickup in revenue growth to more than 1% in Q4 is encouraging but these are very tentative steps forward in challenging timesSector Telecom. -
February 14, 2020TalkTalk UK: FibreNation sorted but challenges remain
Focus Report, ReportsTalkTalk’s subscriber base and revenue fell again in Q3, and ARPU continued to decline despite good growth in its higher ARPU (but even higher wholesale cost) high speed base. The sale of FibreNation to CityFibre and the accompanying wholesale deal provides much needed cash and de-risking, although the migration to full fibre still brings challenges to TalkTalk given its low price focus. TalkTalk’s shorter term operational outlook is also still very challenging, with growing EBITDA in 2020/21 particularly difficult given stable/declining ARPU and the rising wholesale costs of migrating to high speed broadband -
February 13, 2020New Zealand 5G update: Still waiting on spectrum auctions with 2d [...]
Focus Report, ReportsAs New Zealand moves towards mass-scale 5G rollout, competition among telcos is forming and the debate around the spectrum sharing is intensifying. Limited 5G services are now being offered by Spark and Vodafone to select customers and they are counting on being able to provide mobile, fixed wireless and IoT services using the same network in the near future to increase their revenues. In this report, we look at the readiness of NZ consumers to move to 5G, the current state of critical spectrum holdings and the key 5G developments in NZ in 2019.Sector Telecom. -
February 12, 2020Sky UK FY 2019 results: a solid first full year under Comcast
Focus Report, ReportsDespite operating in a challenging market, Sky has continued to increase revenues, with the resilient performance of its direct-to-consumer and content businesses offsetting the disappointing drop in advertising income. Across FY 2019, EBITDA was up 12.2%; profit growth driven by a significant reduction in “other” costs as large one-off effects disappear and cost-cutting continues. Extended distribution deals with Netflix and WarnerMedia will protect Sky’s content proposition for the coming future, as would the mooted integration of Disney+ -
February 12, 2020BT: Searching for the nadir
Focus Report, ReportsBT had a weak December quarter, with revenue falling 3% and EBITDA 4%, despite a recovery at Openreach, mainly driven by tough competition and regulatory hits, with operating metrics solid but not noticeably improving. These hits look set to continue, so the company’s hopes of a return to EBITDA growth in 2020/21 probably hinge on brand and service improvements actually becoming visible in operating performance. A successful full fibre roll-out would be a boon for BT in the longer term, and regulatory developments are headed in the right direction, if not quite there yet. However, its affordability without a dividend cut remains questionable in the current challenging environment -
February 11, 2020Subscription BBC?
Focus Report, ReportsThe Government appears set on reducing the scale and scope of the BBC by dismantling the licence fee, and in its place pushing for subscription or making payment voluntary, without any evidence of the likely impact. DTT – the UK’s largest TV platform – has no conditional access capability, and so implementation would require another costly and long-term switchover. A voluntary licence fee would inevitably lead to a huge reduction in income. If just those on income-related benefits were not to pay, the shortfall would be over £500 million – in addition to the £250 million the BBC will be funding for over-75s receiving Pension Credit -
February 10, 2020Webscale Playbook: Facebook
Market Outlook, ReportsFacebook has grown through leaps and bounds since its inception 15 years ago, to currently become the world’s most popular social networking company with 2.3B monthly active users. When Facebook launched in February 2004, several other social networks such as Friendster (2002), MySpace (2003), and Orkut (Jan 2004) were already in the fray, triggering notions that Facebook would meet a similar fate as its peers – some of which are now defunct or are dying a slow death. Further uncertainties creeped in with its IPO going bust in 2012, reflecting doubts over its long-term worth. Fast-forward to 2019 and Facebook now has a market capitalization of over US$540B+, US$58.7B in annualized revenues at the end of 1Q19, and has become a force in advertising to reckon with, just after Google in the US.
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February 5, 2020Australian 5G update: Telstra and Optus build continues, VHA entr [...]
Focus Report, Reports2019 was the year 5G launched in Australia making it one of the first countries in the world to launch 5G services. Whilst Telstra and Optus both launched in 2019, Telstra’s focus was centered on 5G mobile services whereas Optus’ 5G launch centered on 5G fixed wireless broadband services. 2020 will see further competition from the MNOs through continued rollout, VHA entry and potential pricing changes. We expect Telstra to continue its rapid 5G footprint expansion in Australia, including to the regional areas. In this report, we look at the readiness of consumers to move to 5G and the key Australian 5G developments in 2019. -
February 4, 2020Winners and losers as the UK fibres up
Focus Report, ReportsThe speeds made possible by full fibre build are unnecessary for most users in the short term, giving limited commercial advantage to those that can offer them, but are likely to prove essential in the medium/long term. The economics of full-scale, independent alternative networks look very challenging in our view – especially without the support of Sky – although there are some limited arbitrage/cherry-picking opportunities. The Openreach full fibre model makes economic sense under Ofcom’s proposed regulatory framework, provided it retains the lion’s share of the market, although considerable risks remain -
February 3, 20202020 UK advertising forecasts: Robust growth despite the soft eco [...]
Market Outlook, ReportsWe predict 4-5% growth in advertising expenditure on UK media in 2020, driven by double-digit growth of pure play online, expected to reach 58% of total spend this year, up from 55% in 2019. The outlook for the economy in 2020 is more positive than in 2019 because the risk of “crash-out” has given way to a more hopeful prospect of an EU-UK free trade agreement by the end of the year -
January 30, 2020Top 5 Media Trends in 2020
Focus Report, ReportsThe 2010s have been an extraordinary decade in media, demonstrating the speed of disruption in the media industry and the need for market participants to constantly innovate to stay relevant and unlock new sources of growth. So, what can we expect to be the top trends to arise in 2020? At first glance, we expect: 1. The SVOD wars to continue to fragment the media industry 2. BVOD will become a centrepiece of the ‘Total TV’ ecosystem 3. Ephemeral social media will see exponentially growing revenue 4. Podcast revenues to grow due to improved infrastructure enabling effective monetisation and a simplified listening experience for greater adoption 5. Pushback against tech giants to create a more level playing field between local and global players This report explores these trends in greater detail and how they will impact the media landscape. -
January 29, 2020
Insurtech White Paper Part I: Global Insurtech Trends
Focus Report, ReportsThis is the first of three reports in Venture Insights’ series on Insurtech trends and development locally and globally. The term ‘insurtech’ is a combination of ‘insurance’ and ‘technology’, inspired by the term ‘fintech’. Insurance is a notoriously slow-moving industry, with high barriers to entry, complex business models and stringent regulatory requirements; it has lagged consumer tech and even other financial services in updating its offerings and technology stacks. However, the ‘insurtech revolution’ has been seen as a potential challenge to that complacency.Sector Technology. -
January 28, 2020Signs of life in UK property market: Property portals and classif [...]
Market Outlook, ReportsThis is the first of three reports on the classified verticals of property, autos and jobs. This section describes the overarching transition from Digital 2.0 to Digital 3.0 business models (see next page), then turning to trends for specialist property media in 2019 and 2020. -
January 28, 2020Peacock: the future of ad-supported TV brands?
Focus Report, ReportsComcast’s new, on-demand service, launching in April, is an attempt to break NBCU’s unsustainable dependence on sales to Netflix and other SVODs. Peacock provides a path of digital transition for advertising-funded TV with a revamped low-load, high cost-per-thousand model. Reach will be built with a free online tier and distribution to Comcast subscribers. Peacock seeks carriage from other pay-TV operators, with which reciprocal deals would make sense (i.e. HBO Max on Comcast alongside Peacock on AT&T’s platforms. In Europe, where Comcast has no existing major free-TV offering to transition, launching Peacock will be challenging but could present Sky with ideas to counterweigh Netflix on its own service -
January 23, 2020
Can’t spell Media without AI – AI in Media and Video Consumpt [...]
Focus Report, ReportsAustralians love their video content, but as the infamously high piracy of Game of Thrones has gone to show, we don’t like to pay ridiculous amounts for our weekly fix. New entrants in the video market have heeded the call for more affordable content in Australia with the launch of multiple SVOD services in recent years, including the recent announcement of the Disney+ November 2019 launch in Australia. However, overall market growth has been – and will continue to be – relatively stagnant as SVOD replaces incumbent video entertainment platforms. -
January 22, 2020Subscription game services: moving beyond core gamers
Focus Report, ReportsSubscription game services will finally allow platform owners and developers to deliver truly accessible gaming experiences for all, across devices, at a lower entry price point, and curated to ensure consumer safety—both in terms of cost transparency and content types. Consumer comfort with subscriptions should be embraced by the games industry and has already started in mobile. Apple’s Arcade subscription is the test case, providing focused all you can eat games that minimise exposure to violent gameplay, and the ‘free to play’ wild west. Core gamers remain the most vital and profitable games customer segment, but they have been overserved and are an obstacle to broadening the reach of games. Now is the time to move beyond this group, to restructure, expand, and normalise the games market in the next decade. -
January 15, 2020
Video Entertainment Market Outlook
Market Outlook, ReportsWe 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.
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January 14, 2020Netflix: churn, content release and marketing
Focus Report, ReportsNetflix’s US business provides an insight into the patterns of the subscriber take-up of a maturing streaming service, trends that the comparatively nascent international markets may yet have ahead. Through analysis of the relationship between Netflix’s churn, subscriber additions, marketing spend and content release schedule, a clearer view of the rhythms of the streaming business become apparent. Rising churn, and correlation—such as the emphasis on returning original series during the year’s turbulent second quarter—gives guidance on Netflix’s likely future course, including its use of debt.
