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    March 18, 2003

    Piracy

    The troubles of the global music industry are usually assumed to derive from the growth of piracy. This report argues that physical piracy is probably no more of a problem than it has been in the recent past. Digital piracy is indeed becoming more important, but still is by no means the only explanation of declining music sales.

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    March 7, 2003

    Churn

    Little research has been done into why consumers move from one supplier to another. Churn, as this phenomenon is known, is much discussed but little understood. We carried out some research to show what types of people churn, why they do it, and whether it is an outcome of a certain type of personality.

  • March 5, 2003

    Camera Phones & MMS in 2003

    In this report we look at the sales and usage of camera phones in Europe, and estimate future sales based in part on the results of our regular survey of UK mobile users. As a consequence of these findings, we have downgraded our forecast of UK MMS revenues.

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    February 28, 2003

    Fixed Line Telecoms

    In this report we look at three regulatory initiatives to increase competitors access to the 'last mile' of incumbent monopolists: CPS and WLR in the UK, and UNE-P in the US. BT's market shares losses have accelerated in the business market due to CPS; we ask whether this will continue, whether it will happen in the residential market, and whether WLR will have an even worse effect.

  • February 24, 2003

    UK TV Viewing Trends (Issue 4)

    This issue of our regular report on TV trends in the UK looks at pay-TV subscriber numbers, the position of Freeview, and the impact of the huge expansion in the number of digital channels. Our analysis tries to clear away the fog produced by problems with BARB data over the past year.

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  • February 12, 2003

    UK Broadband & Internet Trends Q4 2002

    BT will be announcing tomorrow its latest results on meeting the target of 1 million broadband connections by H1 2003. Some difficulty could be anticipated from the slow monthly pace of connections in H2 2002, mainly due to disappointing take-up of the revolutionary ISP-less BT Broadband product (as we had anticipated), despite high levels of marketing investment.

  • February 11, 2003

    The ITV Merger

    The public debate about the ITV merger has revolved around whether the maintenance of two separate sales houses is the appropriate remedy to be imposed by any Competition Commission inquiry. We argue that the real issues are more complex.

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    January 31, 2003

    SMS TV

    Interactivity via the TV set was one of the most misguided bubbles of the late 1990s. Fancy software and mini keyboards were supposed to provide a replacement for the PC. As matters have turned out, the use of SMS to accompany TV programmes is the means by which new technologies provide a limited form of interactivity to viewers.

  • January 30, 2003

    Canal+ vs. TPS

    On 23 January, the French Competition Council dealt what is likely to be a deathblow to the ambitions of Canal+ Group to obtain exclusive rights to French Premier League football events. The Competition Council ruled in favour of TPS and ordered the 2002 competition suspended pending delivery of its final ruling.

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  • EMI
    EMI
    January 24, 2003

    EMI Music Group

    A few weeks ago, it looked as though EMI would follow Safeway into a frenzied auction in which trade buyers competed with canny buy-out funds. The rumoured interest was sparked by the steady fall in EMI's share price over the course of 2002, which had reduced the value of the entire company to close to the perceived worth of the Music Publishing division.

  • January 22, 2003

    Tracing the Decline in ITV1 Viewing

    This report picks apart the evidence on why ITV1 is rapidly losing audience share. It shows that more intense competition in terrestrial homes is the key reason, not the impact of the growth of the multichannel universe. The decline of ITV1 is across all times of day and almost all demographic groups. Can ITV turn itself around in the face of this secular decline in audiences?

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    January 10, 2003

    French Broadband: The Final Battle?

    ISPs have long found it difficult to challenge Wanadoo on its home French market successfully. Wanadoo has built a commanding lead in the narrowband segment of the Internet access market, and dominates the DSL segment. This report examines whether 2003 will be any different, and finds that, if anything, the intensity of competitive pressures is likely to grow rather than diminish as market focus shifts from narrowband to broadband.

  • December 19, 2002

    UK Handset Survey

    We have recently completed our December survey of UK mobile users, which shows increased purchase intentions for handsets in general and camera phones in particular. We summarise the results in this note, which are good news for handset manufacturers, but more mixed for the operators.

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    December 17, 2002

    UK Competition Commission Investigation Update

    In January the UK Competition Commission (CC) is expected to issue its report on the pricing of mobile termination rates, an issue that was referred to it by Oftel after the UK operators rejected Oftel's initial decision. In this note we speculate on the likely contents of the report, and the impact on the UK mobile industry.

  • December 13, 2002

    Digital Television in Europe

    This report provides our forecasts for the growth rate of digital television homes in Europe over the next three years. We split countries into four groups and predict how the numbers of households with access to digital delivery of television will change in each group. The growth in satellite delivery has slowed considerably during late 2001 and 2002. The digitalisation of cable has stalled almost everywhere. So the only major uncertainty lies in the growth of digital terrestrial homes. This year has seen the failure of two of the four existing services, but the rebirth of the UK operator, in the form of the BBC's Freeview, may herald a more successful era. First indications are that Freeview is doing well. In other countries, however, the obstacles to the growth of a free-to-air service are more significant than in the UK and we do not believe that DTT will experience rapid growth in many other countries, despite the plethora of launches planned in the next few years.

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    December 12, 2002

    Can NTL Service its new debt?

    In the next few days, NTL expects to emerge from Chapter 11, relieved of $11 billion of debt. While the long negotiations over financial restructuring have been in progress, NTL management has been conducting a huge cost reduction exercise largely out of the public eye.

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    December 10, 2002

    TF1 – The Future of TPS

    This note looks at the position of TPS, the satellite pay-TV venture largely owned by TF1 in France. We particularly focus on the issue of payments for football rights because sports rights have become the crucial ingredient in pay-TV success, in France and elsewhere.

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    December 5, 2002

    Universal Music – Valuation

    Universal Music is an important component of Vivendi's business. As M. Fourtou shuffles his cards, the disposal or flotation of Universal becomes more likely by the day and this report values this market-leading record company.

  • November 29, 2002

    C4 and E4

    One response to the growth of the satellite and cable households has been for terrestrial broadcasters to launch their own digital channels. These channels are beginning to absorb significant fractions of the total programming budget and in this report we look at the implications for the parent broadcasters. We examine E4, Channel 4's main satellite entertainment channel, showing that it is likely to remain a drain on the parent for many years to come. Rather than ‘strengthening the brand' of terrestrial broadcasters, which is the reason normally given for diversification into satellite channels, our research shows that E4 and other services do nothing for the parent company and divert programming expenditure that would otherwise be usefully spent on the terrestrial service.

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  • November 27, 2002

    Mobile and Internet Substitution

    Weak revenue growth has been a feature of both European and US fixed line incumbent operators over the last six months, with the root of the problem lying in poor growth, or even decline, in the volume of voice calls. This report looks at the reasons.

  • November 26, 2002

    Canal+ The Showdown

    Based on the recent announcement by the French Professional Football League, we now expect Canal+ to be awarded the exclusive rights to broadcast Premier League events for the three seasons starting in 2004, for which it offered €480 million. (Rival TPS is challenging the League's approach to the Competition Commission, so the story may yet have an unexpected ending.) These payments will add to an already hefty calendar of payments for Canal+ under the 1999 contract, as a result of which Canal+ is likely to report no or low profits in FY 2002. This note details the aggressive cost cutting and revenue-raising measures that will be needed to achieve a modest level of profitability going forward. By FY 2005, when Canal+ becomes the sole purveyor of Premier League events and payments rise by 60%, the subscriber base will have to be 180,000 higher just to maintain profits at 2004 levels. This seems a challenging target given that Canal+ lost 70,000 subscribers this year. In short, we think that Canal+ may have won the battle for Premier League rights at the price of its profitability in the medium-term.

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  • November 15, 2002

    The Song Remains the Same

    In spite of the widely publicised decline in sales of recorded music, the 'music publishing' business grew at an average annual rate of over 4% between 1995 and 2000. This report assesses the prospects for this important segment of the music industry.

  • November 8, 2002

    Canal+ and Cegetel

    The November 12th bids for football rights are a nightmare for Canal+. Its operating margins and cash flow are under pressure, but failure to outbid TPS would mean a probable loss of perhaps 25% of its subscribers. This makes it likely, we think, that TPS will end up buying Canal+ from Vivendi, whoever wins the football rights, at a much lower price than the valuation of €3.5bn suggested recently by Morgan Stanley. Similarly, Vivendi may realise that it will be forced to sell the studio and the record business to Bronfman/Diller for less than current valuations. This potential devastating scenario perhaps explains why M. Fourtou is so keen to buy the rest of Cegetel, rather than selling out to Vodafone. Otherwise he would have little else left to manage. Or perhaps he is simply playing poker with Chris Gent, but running the risk that he ends up over paying. Vodafone cannot lose. It will either buy Cegetel now, or wait for it to fall into its hands when the bankers withdraw support for Vivendi.

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  • November 6, 2002

    UK Digital TV Forecasts

    This note provides our forecast for the number of UK households able to receive extra television through satellite, cable and terrestrial multi-channel platforms. Though Sky's performance has been strong this year, subscriber growth has been largely at the expense of cable and digital terrestrial. We expect this pattern – Sky outperformance within a slowly growing multi-channel universe – to continue. We are pessimistic about the prospects for Freeview, the BBC's new digital terrestrial platform. The programme offering is weak and too directed towards the under 35s, who now largely already have digital television. The technical problems of obtaining better coverage for the service remain severe.

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