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July 2, 2019A strict early privacy verdict for UK online advertising
Flash Report, ReportsThe Information Commissioner’s Office reported on the UK online advertising sector, finding common industry practices unlawful under a strict interpretation of the GDPR and UK privacy law. The ICO focused on problems around transparency, consent and data sharing in the Real-Time-Bidding ecosystem, which comprises 16% of UK online ad spend, but most of publisher online ad revenue. The ICO is giving the industry six months to shape up, with the next steps still unclear. The Competition and Markets Authority has had under consideration an investigation into the entire online advertising sector, but is hampered by Brexit-related considerations.
July 1, 2019Reader-first news media: From transition to transformation
Market Outlook, ReportsThe 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 27, 20192019 UK TV advertising backstopped by Brexit
Flash Report, ReportsWe expect total TV ad revenues to decline 3.3% in H1 2019, partly due to a return to Earth following the idyllic conditions of the World Cup in June 2018. Bad omens for advertising for H2 include the sagging economy since April and the Government’s impetus to achieve Brexit on 31 October, with or without a deal. Our forecast remains a 3% decline for total TV ad revenues for 2019 as a whole, with the risk of a more serious downturn in 2020 in the wake of Brexit.
June 26, 2019Do batteries change everything, and by when?
Flash Report, ReportsWebinar Review: Venture Insights hosted a webinar with leading solar and battery experts Nick Brass (Co-Founder, DC Power Co) and Ryan Wavish (Principal, Marchment Hill Consulting) to discuss the role of household batteries in Australia. The topic for discussion was “Do batteries change everything, and by when?”. Certainly, the view from the guest speakers and Venture Insights is that batteries are a ‘game changer’ technology on the horizon for residential electricity markets. In a world made up of cheaper renewable electricity (zero marginal cost) there are profound opportunities for all participants in the electricity supply chain, from battery manufacturers, demand side software models, fossil fuel and renewable generators, transmission and distribution network owners and the incumbent and challenger retailers.
June 26, 2019Facebook Libra – the cryptocurrency arms race has begun…
Flash Report, Free Sample, ReportsFacebook announced the launch of Libra, a new digital currency that aims to transform how we pay and transfer money. Calibra, Facebook’s Libra ewallet, has the potential to shake the entire payments industry through its scale and value. However, Libra faces multiple challenges, including regulatory hurdles and Facebook’s chequered past with privacy and data security.
June 25, 2019European mobile in Q1 2019: Toughest conditions in four years
Market Outlook, ReportsEuropean 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.
June 24, 2019Monthly Australian TMT Wrap: May 2019
Monthly wrap, ReportsMay was another busy month for the telco sector with significant announcements on three major M&A deals in the market. Furthermore, M&A activity continued to be strong in May with several deals announced.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 20, 2019Network Slicing – business transformation opportunities from me [...]
Flash Report, ReportsNetwork slicing is a key feature of 5G networks, allowing MNOs to allocate independent virtual networks to customers with specific capabilities and quality of service guarantees. In addition to improved performance, network slicing will create new business models that will bring new revenue streams for MNOs. There are a range of opportunities across media, gaming, emergency services, IoT, transport and MVNO market segments.Free
June 18, 2019Batteries powering our residential homes
Free Sample, 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.June 18, 2019UK broadband, telephony and pay TV trends Q1 2019: Price wars dom [...]
Market Outlook, ReportsMarket 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.
June 17, 2019UK mobile market Q1 2019 – Pressure to mount after mixed bag in [...]
Flash Report, ReportsThe UK mobile market posted its slowest growth in more than two years this quarter; just 0.5% service revenue growth although net adds were strong and churn was down. ARPU is under considerable pressure thanks to regulation limiting out-of-bundle spend which will exacerbate as the year progresses. Several other negative developments look set to be layered on the pressures this quarter, including a step-up in competitive intensity as 5G launches – with H3G’s pricing of unlimited data a sign of a resurgence in its aggression
June 14, 2019UK Channel 4’s balancing act: 2018 annual report
Flash Report, ReportsMindful of the uncertain future effects of ongoing events, most notably the stagnating TV ad market and the costs of establishing an HQ in Leeds, Channel 4 returned a £5 million pre-tax surplus in 2018, which after investment in Box left its cash reserves at £180 million. Increased digital revenue more than made up for the anticipated drop in spot advertising and sponsorship (with group viewing share and SOCI down) while cautiousness necessitated lower content spend (down 5% from the peak in 2016); a concern given rising content costs. Nevertheless, Channel 4 is doing a good job delivering its remit in a tough environment, continuing to broadcast programming no-one else would and leveraging long-standing relationships to nurture television and film of a quality and ingenuity that belies the modest size of the organisation
June 13, 2019O2 UK: holding its own in toughening conditions
Flash Report, ReportsAfter a period of significant outperformance, O2’s Q1 results reverted to sector average revenue growth with ARPU down by 3% and all of the growth coming from ‘other’ revenues. Regulation limiting out-of-bundle spending has been a significant drag which will continue to worsen. A more competitive market and a punishing regulatory outlook will make it very challenging to sustain 2018 growth trends as this year progresses
June 12, 2019Monetising user-generated video
Flash Report, ReportsVideo sharing platforms, like YouTube, Facebook Watch and Twitch, are vying to attract creators with monetisation options such as branded content and user payments. Advertising income, already limited for many small and medium-sized creators, has been undermined by YouTube’s response to brand safety concerns. The new tools come with their own obstacles, but are necessary to keep platforms attractive to video creators.
June 11, 2019Mobile Blackspot Programs: Telstra likely to be the future winner [...]
Flash Report, ReportsThe Commonwealth Government and States have funded four rounds of blackspots resulting in 1,047 new base stations. In March 2019, the Government announced two more blackspots rounds with total federal government funding of $160 million. Similar to the previous rounds, we expect the majority of total state and federal funding to go to Telstra. However, there are still bidding concerns for the rounds.
June 6, 2019Foxtel and OTT – a tough balancing act…
Flash Report, ReportsFoxtel has made several attempts at building a successful OTT service, but the results have been mixed so far. With Kayo and the potential launch of a ‘Netflix’ competitor, Foxtel is clearly aiming to increase household penetration beyond the 30% mark. However, in a crowded SVOD market and the potential for further disruption from new entrants and other players, Foxtel faces a tough battle.
June 5, 2019UK HFSS advertising ban consultation
Flash Report, ReportsThe UK government is now consulting on a wider TV advertising ban until 9pm for food and drink high in fat, salt and sugar (HFSS), to combat childhood obesity. TV and TV advertising are not the cause of children being overweight or obese (O+O). Policy change in this area should inform and educate parents and young children, as they have in Leeds and Amsterdam. With 64% of the UK population being O+O, obesity is a complex societal issue requiring a multifaceted approach. The evidence from existing rules, and plummeting TV viewing amongst children, says that further restrictions on TV advertising will be ineffective in curbing the rise of obesity in the UK.
June 3, 2019TalkTalk UK: a welcome slowdown?
Flash Report, ReportsTalkTalk hit the bottom end of its (revised) 2018/19 EBITDA guidance, an achievement given fierce price competition and the margin-dilutive effect of high speed upgrades. This is however helped by one-off Openreach price cuts, and price rises for ancillary products (voice calls and pay-TV) and out-of-contract customers that look hard to sustain. Subscriber growth slowed dramatically in Q4, and continuing this more measured approach could help the company counter multiple market pressures, and perhaps even lead to a détente in the current price wars
May 29, 2019Facebook’s video strategy – loads of content but nothing to W [...]
Flash Report, ReportsBy 2020, online video will account for 82% of all internet traffic in Australia. It is therefore not surprising that global tech giants are investing in and acquiring different genres of video content as they make a play to dominate online video consumption. Facebook’s half-hearted attempt at video streaming has had its fair share of issues so far and is playing catch up in a market already dominated by other SVOD players.
May 29, 2019Vodafone – pressure is still on
Flash Report, ReportsVodafone’s operating performance worsened again this quarter with revenues down 3.3% and an extension of its underperformance relative to peers. Vodafone was right to cut its dividend given the extremity of the cash constraint. With financials in Euro terms in negative territory and worsening, an elevated and progressive dividend was not sustainable. In spite of difficult market conditions, the lower end of guidance looks achievable as comparables will become easier and football rights costs decline. The transformation programme will need to pay off fast to deliver any meaningful growth
May 28, 2019Virgin Media UK: contemplating its strategic future as pressure m [...]
Flash Report, ReportsQ1 results evidenced the downturn that Virgin Media had flagged in February. Consumer cable weakened sharply to just 1% growth vs 3%+ historically, partly thanks to ‘increased promotions in response to market dynamics’. Monetising Virgin’s speed advantage is becoming more challenging. Competition is hotting up for high-speed broadband in particular, fuelled by Openreach targets for smaller players and BT’s full fibre and G.fast rollouts. The company faces two vital strategic decisions – whether to wholesale BT’s fibre products outside its footprint, and whether to allow wholesale access to its own network. The former is likely to have the most legs and offers an alternative to further Lightning extension
May 27, 2019BT UK: Promising future, but investment required
Flash Report, ReportsBT is accelerating its ‘full fibre’ rollout, likely due to a combination of a successful build to date, very promising regulatory developments, and (let’s not deny it) worrying competitor build plans. Full year results were a little weak versus consensus, with guidance a little soft as well, leading to questions of how this can be funded, particularly the roll-out acceleration from 2021/22 to cover half the country by the mid-2020. Whatever the funding mechanism, we regard the investment as sound, with BT’s planned operational transformation also promising but potentially requiring further upfront investmentMay 23, 2019Monthly Australian TMT Wrap: April 2019
Monthly wrap, ReportsWe have seen an uptick in M&A activity in April on the back of a relatively quiet period in March. Strong deal activity has been distributed throughout the telecommunications, media and technology industries.
