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    July 26, 2017

    Netflix passes 100 million: buy more steak, get less sizzle?

    After a quarter coloured by big, returning series Netflix now has just shy of 104 million subscribers worldwide, with, for the first time, the majority living outside the US. Content expenditure continues to dazzle with $4.2 billion spent in the first half of 2017. Negative free cash flow looks set to hit $2.5 billion for the year, with large upfront payments for self-produced and commissioned content coupling with rights acquisition expenditure to create a library of programmes that necessitates continual subscriber growth. Current international growth is small considering the magnitude of the opportunity, revealing the difficulty of creating sizeable customer bases outside of the West, where competitors are cheaper, US programming less desirable and internet access comparatively limited
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    July 24, 2017

    Channel 4 set for the future: 2016 annual report

    2016 has seen Channel 4 break new records in growing revenues and investing in content origination, whilst making further progress in delivering its remit and maintaining audience share for its main channel. However, the second half of 2016 and early months of this year promise a significantly tougher 2017 as the economic and TV advertising climate has worsened and the future is clouded with uncertainties. Channel 4 nonetheless starts from a relatively strong position financially and we expect it to be well capable of sustaining its remit under the leadership of its new CEO Alex Mahon, though much hinges on the outcome of the Government consultation on relocation
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    July 24, 2017

    SME marketing: a local and global battleground

    Accelerating print advertising declines in 2016 are placing pressure on local newspaper publishers to deliver faster online growth. However, digital growth is being supported yet compressed by Google and Facebook; we estimate SME expenditure on Google is roughly 2x the local press, and we expect SME spend with Facebook to match local newspaper advertising revenues in two to three years. Publishers need to grow consumer registrations and subscriptions, digital display and also digital marketing services, in partnerships with the tech giants – but first they have to convince consumers they have relevant use-cases that global platforms cannot replicate
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  • Retransmission fees back on the burner
    Retransmission fees back on the burner
    July 21, 2017

    Retransmission fees back on the burner

    The debate over the entitlement of free-to-air PSBs to retransmission fees from pay-TV platforms has simmered for the last few years, yet promises to boil over once the Digital Economy Act 2017 (DEA 2017) comes into force; as expected in late July/early August. The repeal of section 73 of the Copyright Designs and Patents Act 1988 (CDPA 1988) has removed a barrier to negotiations between the PSBs and the cable operator Virgin Media over retransmission fees, seen by some as the thin end of a wedge for obtaining such fees across all pay-TV platforms. However, pressing for retransmission fees could have the opposite effect of what the PSBs – in particular the commercial PSBs – wish for, threatening as it does to undermine the principles of universality and free access at the point of use, so long the bedrock of public service broadcasting in the UK.

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  • July 20, 2017

    Facebook’s charm offensive is over – at least as we k [...]

    The big blue giant is losing its allure with Australians, media companies and news publishers alike. What scenarios will we see play out as Facebook seeks to draw users back in to secure its advertising revenue?. The fight over content rights: are we beginning to see news agencies take the power back?

  • July 13, 2017

    Verizon merger with Yahoo

    Verizon has undergone two large-scale acquisitions within the past two years in a bid to compete against internet giants, Facebook and Google. Are these mergers a step in the right direction for the Telco giant, or will the company remain in the shadow of the duopoly?

  • July 12, 2017

    Cometh the hour for the commercial PSBs

    The first half of 2017 has seen the announced departure of three CEOs from the commercial PSBs within the space of less than two months: David Abraham of Channel 4 (14th March), Rob Woodward of STV (25th April) and lastly Adam Crozier of ITV (3rd May). Responding to the challenges of digital switchover and the advertising recession of 2008/09, as well as their own specific company issues, one of the first tasks for all three CEOs has been to raise staff morale. The last seven to ten years may have been taxing at times. The next seven to ten promise to be no easier, and may yet be harder, as the successor CEOs chart their way through the continuing transformation of the UK digital landscape

  • European scripted content - Rising demand and consolidation
    European scripted content - Rising demand and consolidation
    July 11, 2017

    European scripted content

    The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results. Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising. Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse.

  • July 10, 2017

    Tinder and online dating: who’s paying?

    Tinder is one of the most high-profile mobile apps on the market and has transformed the adoption of online dating.Tinder’s success is due in large part to its understanding of user experience, which is key to getting, keeping and upselling users through network effects.But the financial value of this success is limited by the industry: even a mobile revolution has not created a high- revenue mass market where none existed before

  • July 7, 2017

    News publishers accelerate membership drive

    In an immersive industry workshop in Turin celebrating La Stampa’s 150th anniversary, quality news publishers from around the world expressed a strong collective belief in membership, an editorial strategy supported by an emerging advertising opportunity. Editorial and service relevance was defined by widely varying publisher missions, categorised by a range of local and specialist use-cases, creating highly differentiated services for print, mobile and other delivery. A low-level hum in the discussions was a recognition that fundamental change in company culture – editorial and commercial as well as business operations – is a complex but urgent requirement for achieving a long-term sustainable news service.

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  • July 4, 2017

    BBC Three: one year online

    In February 2016, the BBC moved its youth-focused channel BBC Three out of the broadcast sphere and into an online-only delivery system, as part of plans intended to find an extra £100m in savings laid out in 2014.The new service would aim to continue fulfilling the channel’s remit of delivering innovative and diverse content to a key audience of 16-34s, but with greater emphasis on short-form and various more digitally focused formats.Now, more than a year on, the effort shows the difficulty traditional media brands have in adapting to space occupied by niches that primarily digital brands have carved out, although the ‘channel’ still manages largely to deliver on its remit with much of its original content

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  • July 3, 2017

    End-game for the merger of 21CF and Sky

    Secretary of State (SoS) Karen Bradley has made an initial decision to refer 21CF’s bid for Sky to the Competition Markets Authority (CMA) for a detailed consideration of media plurality concerns, to be finalised in the near future. The issue at hand is the potential increase in the influence of the members of the Murdoch Family Trust (MFT) over the UK’s news agenda and political process. The SoS rejected the remedy for Sky News brokered by Ofcom. Ofcom’s non-negative decision on the fitness and propriety of 21CF to hold Sky’s broadcast licences cleared another hurdle in the event the merger is finally accepted.

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  • June 29, 2017

    The map is now the territory

    We are in the midst of a rapid change in how maps are made and used, from a world of cartographers making records of physical features to sell to consumers and businesses, to one where information about the world is automatically tracked and measured, and built into every service we use. A whole host of industries traditionally unconcerned with geography are being and will be transformed by maps and location, from retail and advertising to finance and insurance. Every business needs to know what maps can offer them. A variety of maps suppliers are jostling for position in serving this growing need: local or international, free or commercial, seeing mapping as a core or side-business. Different suppliers suit different requirements.

  • June 27, 2017

    UK broadband, telephony and pay TV trends Q1 2017: Profit warning [...]

    UK residential communications market revenue growth dipped modestly to 2.7% in Q1, from 3.3% in the previous quarter. This was mainly driven by ARPU weakness arising due to the timings of Sky and Virgin Media’s price rises, but weakness also stemmed from the sustained decline in broadband volume growth and continued new customer price competition.Looking forward, the implementation of an overlapping price increase from BT, as well as Sky’s price increases coming into full effect, should boost market revenues by around 1ppt in Q2 2017, but this will drop away again by Q3. The churn fallout from the communication of these price increases should also dissipate in Q2, benefiting BT and Sky competitively, and making it challenging for TalkTalk to repeat the feat of recovering to positive retail broadband net adds

  • June 23, 2017

    How to sell games: borrowing ideas from Netflix and Apple

    A Netflix-like subscription model for console based video gaming is a big step closer with Microsoft launching a clear and easy Xbox subscription game solution, and it may even work. Sony’s strategy for premium online services across all its businesses remains muddled and complicated, but could be fixed quickly: dropping game streaming is the first step, providing a lower cost subscription service is the second. Google’s admission that more curation in its games app store will be needed finally indicates a better understanding of the games industry, in parallel with the company’s efforts to win over other creative industries

  • June 22, 2017

    US music publishing royalties for 2018-22

    The “fair return” to US music publishers and songwriters for rights used by interactive streaming services will be decided in 2017 by the Copyright Royalty Board (CRB). Rights owners want to switch to a fixed per-stream or per-user rate on all tiers, arguing music has an inherent value. Apple is asking for a much lower per-stream rate. Amazon, Google, Spotify and Pandora warn of disruption to free and ad-supported tiers if the revenue-share tariff is not rolled over, and the CRB could side with them

  • June 13, 2017

    Sky is favourite in twin (and odd) Italian football auctions

    Domestic championship and Champions League rights for 2018-21 are auctioned almost simultaneously. The main uncertainties are the extent to which Sky will increase its exclusive coverage of Serie A, and whether it will try to win the Champions League auction to take advantage of rival Mediaset Premium’s announced retreat. We doubt that telecom or digital operators will be tempted by the €200m minimum price for the two internet-only packages with patchy regional coverage – a bad idea mandated by the regulator. However irrational behaviour at auctions should never be ruled out.

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  • June 10, 2017

    BT Q4 2016/17 results: Mobile strength, pressure elsewhere

    BT had a reasonable quarter in its consumer broadband business given market pressures, and a very strong one at EE with continued growth acceleration. It had a good quarter for fibre adoption as well, helping its wholesale divisions stabilise their revenue, but business/IT was weak as expected.Regulatory pressure remains intense despite the (welcome) Openreach agreement, with price cap regulation proposed or due on a range of products, and a regulatory approach which is far from investment-orientated. Pressures in the business/IT market are likely to continue, and pressures in the consumer broadband market are likely to intensify, justifying BT’s current cautious approach to guidance and dividends.

  • June 9, 2017

    UK General Election online: news and advertising

    In contrast to print coverage, most shared news and opinion content on social media was decidedly pro-Labour this election season, with fake news relatively non-existent compared to the US election in November. Facebook’s role in news distribution has steadily grown and now rivals Google’s, but only a half of the UK’s electorate are active users – for the platform to become decisive in political news would require much stronger turnout among young voters. Facebook was the chief digital ad platform for both main parties, with Conservatives targeting Labour seats, Labour defending them and both adopting a negative tone.

  • June 8, 2017

    Nintendo Switching to a new console era

    The successful launch of the Nintendo Switch creates a new console model, and demonstrates the staying power and long term value of great franchises. Microsoft reveals the specification for Scorpio, but it won’t be enough to catch up to Sony. New franchises, and probably new leadership, will be the key to stopping Xbox sliding into irrelevance outside North America. Sony’s PlayStation 4 now exceeds 60m units worldwide, allowing Sony more freedom to publish a wide range of challenging creative console games, while VR games continue to gain momentum.

  • June 7, 2017

    Australian Advertising Expenditure Market Outlook

    The Australian Advertising Expenditure market outlook report discusses the actual (2009 – 2016) and forecast (2017 – 2021) advertising revenue alongside the key drivers within the Digital, Broadcast Television, Print, Radio and Outdoor markets.

  • June 6, 2017

    BBC Studios: make or break

    The launch of BBC Studios - the relocation of most of the broadcaster's in-house production capability into a commercial subsidiary - gives it the ability to compete for work elsewhere at the expense of a guaranteed quota at the BBC. The upside is large, with the opportunity to retain an increased amount of intellectual property, a requirement of growing importance. However, so is the risk, with sustainability dependent upon a major cultural shift; from comfortably retained provider to competitive production engine. Outside of a weak track record when competing for work, other entwined issues must be overcome for success in the medium term; demonstration of transparency in the commissioning process and watertight transfer pricing practices, and the dispelling of state aid concerns.

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  • June 1, 2017

    Australian Out-of-Home Market Outlook 2017: Widespread growth dri [...]

    The Australian Out-of-Home (OoH) market has been growing continuously for the past seven years, with CY16 posting a notable 15.8% year on year increase.Total revenue for 2016 was at an all-time high of $789.5 million, up from $682.1 million in 2015

  • May 25, 2017

    Amazon Channels: bite-sized pay-TV for the whole family

    After a US debut, Amazon’s marketplace of SVOD services arrives in the UK and Germany, but without the major draws of HBO and Showtime. Unbundling SVOD for premium content strengthens Amazon’s position in the fast-developing connected TV landscape, where Prime Video is taking on Netflix, NOW TV and YouTube. For niche content providers, Amazon Channels provides a new, low-friction route to go direct-to-consumer with a mix of live and on-demand premium content alongside existing distribution strategies.

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