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  • May 22, 2019

    ‘Is Orange the new Bank?’ Telcos and Fintech

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    As 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 20, 2019

    Disney gets the final piece of Hulu

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    Disney announced that it would acquire Comcast’s 33% share of Hulu in a put/call agreement that can be enacted by either party from January 2024, while taking full operational control of the vehicle immediately. Under the agreement Disney will pay Comcast a minimum of $9 billion for its current stake, provided Comcast fulfils agreed capital calls, which going forward would be just over $500 million/year. Disney secured the continued licensing of NBCUniversal content for Hulu, contributing about 30% of Hulu’s library, but Comcast can loosen obligations to Hulu for the launch of its own SVOD service in 2020.
  • May 16, 2019

    Australian Fintech Breakfast Roundtable: Fintech ready to disrupt [...]

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    On 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.
  • May 15, 2019

    An alternative model to the proposed TPG-Vodafone merger

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    The ACCC has blocked the $15bn merger between TPG and Vodafone, citing its belief that a merged entity would reduce competition given TPG’s ability to become a fourth mobile operator. TPG and Vodafone intend to appeal the decision and have extended their merger agreement to 31 August 2020. Venture Insights believes there is an alternative model which would enable infrastructure efficiencies and benefit competition.
  • May 14, 2019

    Facebook doubles down on advertising

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    After the most challenging period in its history since 2012, Facebook has been able to stabilise its fundamental metrics and announce a major product overhaul. Despite talk of a business model pivot, Facebook’s focus remains on advertising, whose growth will remain concentrated in developed markets. News publishers wishing to stay relevant on the upgraded product set need to target exclusive layers of social interaction, with groups particularly important.
  • 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.
  • April 16, 2019

    Google and game streaming: double or quits

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    Google’s Stadia promises the most credible game streaming service yet, but building a subscription bundle of top titles would require an all-out bet in the sector. Google is building its own game studios – to win over others it must overcome a troubled history in gaming, mitigating risks to developer business models and creative integrity. Games are much more technically demanding to stream than video, presenting an advantage to Google, Microsoft and Amazon – and a boost to telecoms network demand, welcomed by operators.
  • April 12, 2019

    Monthly Australian TMT Wrap: March 2019

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    The number of announced transactions in March is low relative to February. A number of companies raised capital for a range of purposes, which were well received by the market. The volatility in Lyft’s share price post listing has shown that the market has struggled to price Lyft due to a lack of comparable listed companies in similar sector.
  • April 10, 2019

    Mobile Sports Streaming, Gaming and E-sports: A revenue opportuni [...]

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    There’s been a lot of speculation in the market about the revenue upside for 5G operators. Our latest Australian consumer survey shows there is good 5G market awareness and that 18% of subscribers would consider paying a price premium for a better 5G network experience. Venture Insights believes a 5G product which allows subscribers to move to a separate 5G slice which provides enhanced data throughput would clearly work with the gaming and sports consumer segments and benefit the network provider if offered as a (for example) $5 - $10 monthly option. The risk is that if Telcos stick with AYCE and unlimited plans, then the platform operators (such as Google Stadia) will benefit from the cloud based gaming subscriptions and take advantage of a better 5G network
  • April 8, 2019

    The North heads south: European mobile in Q4 2018

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    European mobile service revenue growth dropped to -1.3% – its lowest level in three years – particularly disappointing as growth should be bouncing back post-EU roaming tariff cuts. Having enjoyed relatively favourable dynamics in 2018, the UK and Germany are facing marked changes in momentum from here. Regulation limiting intra-EU call prices could hit hard – up to 6% of revenues and 20% of EBITDA in the UK, although other EU countries may be less exposed due to lower tariffs currently.
  • April 5, 2019

    Apple’s showtime: everybody gets a service, partners get pennie [...]

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    ­­­­Apple is strengthening its household model by doubling down on family-friendly content subscriptions and payments. The model is reliant on hard bargains with mainly US partners, which risks sacrificing potential scale for a short-term boost in margin dollars. The new services offer glimpses of novel concepts, but stop short of taking risks to truly differentiate—a problem in TV, where Apple’s distribution advantage is slimmer than Oprah would have it.
  • April 4, 2019

    BBC Studios and Discovery in the UK: a new SVOD and the UKTV spli [...]

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    The split of UKTV has been announced with the lifestyle channels going to Discovery, while the balance, along with the UKTV brand and VOD service, retained by the BBC, costing BBC Studios £173 million. In the same release, a new, global Discovery SVOD “powered” by BBC natural history and factual programming was announced, backed by a ten-year content partnership. The deal is a positive step for the BBC, which safeguards against flaky brand attribution internationally and the potential loss of revenues from Netflix, which is becoming more choosy when acquiring content.
  • April 3, 2019

    eSports and Broadcasters – to TV or not to TV…

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    eSports viewership and revenues have grown significantly in the past few years and look set to continue growing rapidly. The rapid growth and the much-coveted millennial viewer base has caught the eye of traditional broadcasters who are looking at ways to explore this new content genre. But has the eSports ‘gravy train’ already left the station?
  • April 2, 2019

    UK broadband, telephony and pay TV trends Q4 2018

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    Market revenue growth accelerated to 3% in Q4, but it might never reach this level again, being helped by a never-to-be-repeated BT overlapping price rise. With price rises becoming more challenging in general, and superfast pricing under pressure in particular, maintaining/increasing ARPUs is becoming more difficult despite superfast volumes surging. Openreach’s ultrafast roll-out has accelerated, challenging Virgin Media and bringing the prospect of further price premia, but perhaps too late to be of significant benefit in 2019.
  • April 2, 2019

    Apple Card – allowing the fox into the henhouse…

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    In the four years since Apple Pay was launched, major banks and retailers around the world have allowed customers to use their iPhones to make payments. On 25 March, Apple went one step further and announced its plans to release a digital-first credit card, Apple Card, partnering with global payments network MasterCard and investment bank Goldman Sachs.
  • April 1, 2019

    Expectations versus reality in data-driven healthcare – how [...]

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    On 19 March 2019, Venture Insights conducted a health sector breakfast roundtable (in our Melbourne and Sydney offices) to discuss the topic “Expectations versus reality in data-driven healthcare – how do we solve the medical data conundrum?”. We had two speakers: Karn Ghosh, CEO and founder of health-tech firm Hit100, and Dr Sam Prince from the Sam Prince Group and broad discussions and healthy debate among our 35 attendees. We discussed the challenges faced by health-tech businesses that arise from the current siloed, unstructured nature of health data across the Australian healthcare industry and what can be done to improve the collection and sharing of health data for the benefit of both industry participants and patients. The consensus view was that governments, health service providers, communities, individuals and emerging health tech businesses would all play a role in improving the quality of data collected, how it is stored, shared, analysed and used. These improvements will help build trust and grow consumer confidence which in turn should lead to health system efficiency improvements and better health outcomes.