April 27, 2015 Reports
Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 17 March 2015. The event featured talks from 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts from some of the talks, and you will find accompanying slides for many of the presentations here. Videos of the presentations are available on the conference website.
Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 17 March 2015. The even [...]
April 24, 2015 Reports
Sky plc has produced a strong first quarter across its three markets in terms of subscriber growth, record low churn and continuing firm control over costs, which has contributed to a 5% increase in revenues and 20% increase in operating profit over the first nine months of fiscal 2015. As expected, practically all the retail customer growth in Q3 occurred in the UK & Ireland and in Germany & Austria. Nevertheless, the results were also positive in Italy, as it registered the highest net customer increase in 3 years and record low churn. It is still too early to judge the success of the Sky plc strategy in terms of synergies, innovation and content origination. Whilst the potential appears great, the imminence of the next Bundesliga auction is a reminder that the issue of sports rights inflation is unlikely to disappear even after the latest PL auction.
Sky plc has produced a strong first quarter across its three markets in terms of subscriber growth, record low churn and continuing [...]
April 20, 2015 Reports
There are still two and a half weeks of the campaign to go before polling day, but postal votes are already being sent out to voters and many have already made up their minds. We believe there is now a small range of likely seat outcomes, and therefore possible governments. Our central case sees the two main parties almost level on seats, resulting in a Labour minority government dependent on the support of the SNP and its allies (the Greens and Plaid Cymru). Slightly different outcomes are also possible, depending on the final size of the swing from the Conservatives to Labour in England and Wales, over which there is still considerable uncertainty. If Labour does worse than we expect, it could require the votes of the Lib Dems as well as the SNP; if it does better, it could require only Lib Dem votes. The upside case for the Conservatives is now that they win enough seats to make a minority government dependent on the support of the Lib Dems, DUP and UKIP possible. We think that scenario is now unlikely, but even if it were to occur, we think it would be very challenging to both knit those parties together and persuade the parliamentary Conservative party that its interests are best served by doing so. For these reasons, we think a government led by the Conservatives can now be all but ruled out.
There are still two and a half weeks of the campaign to go before polling day, but postal votes are already being sent out to voter [...]
April 20, 2015 Reports
Prospects for European free-to-air commercial broadcasters are clouded by a weak advertising recovery, decline in TV set viewing by younger age groups and increased competition from pay-TV and international operators. Growth opportunities are nevertheless to be found in fine tuning families of channels to sustain audience shares, increased production of differentiating original content, wider HD and catch-up programmes distribution and smart pay-TV developments – broadcasters must focus on strengthening the quality gap between the TV set experience and online entertainment. ITV has shown the greatest increase in profitability, benefitting from its global production strategy. RTL and ProSiebenSat.1 have a modest upside from carriage fees for HD channels but production and pay-TV initiatives have yet to pay off. TF1 and M6 have withdrawn from pay-TV and face regulatory obstacles to launching channels and production investments. Mediaset in Italy should benefit from the ad market stabilising, but risks large pay-TV losses. In Spain, Mediaset and Atresmedia enjoy an ad boom.
Prospects for European free-to-air commercial broadcasters are clouded by a weak advertising recovery, decline in TV set viewing by [...]
April 16, 2015 Reports
Local newspaper circulation continues to decline precipitously, while decline in some categories of print advertising has slowed marginally. Digital traffic exploded in 2014, however, substantially outperforming the market generally, resulting in signs of stabilisation across print and digital in some marketing categories, notably recruitment and pockets of display. Industry leaders have moved beyond cost-cutting and are no longer reproducing their print products online: local platform solutions, and strategic technology and business partnerships, mean fundamentally different companies are emerging in local media.
Local newspaper circulation continues to decline precipitously, while decline in some categories of print advertising has slowed ma [...]
March 30, 2015 Reports
Radio’s transition from analogue to digital has been slow, with no switchover date yet in sight 16 years after Digital Audio Broadcasting’s (DAB) commercial launch. Recent initiatives intended to boost DAB are welcome, but most will not be transformatory as they offer little new to the consumer. However, the award of the second national commercial multiplex to Sound Digital with the launch of new, compelling content in 2016 could finally give radio listeners the reason to upgrade and make a case for switchover.
Radio’s transition from analogue to digital has been slow, with no switchover date yet in sight 16 years after Digital Audio Broa [...]
March 16, 2015 Reports
Apple has provided more details on its smartwatch range, on sale from April, priced between $350-$17,000 to appeal to a wide range of would-be buyers and initially focusing on enhancing the iPhone through added convenience. The Watch is likely to develop quickly in the next few years, and has the potential to become an indispensable tool for managing payments, health data and identity, as well as controlling other connected devices. The company is laying the foundations for Watch to become a must-have device, but the case is still to be made and ultimately its success depends on a number of key groups and factors outside Apple’s control.
Apple has provided more details on its smartwatch range, on sale from April, priced between $350-$17,000 to appeal to a wide range [...]
March 12, 2015 Reports
Scotland could produce up to 57 SNP MPs (of a total of 59 seats in Scotland), up from 6 in 2010: from “How many seats to the SNP?”, the question now is “Which Scottish seats won’t the SNP win?”. Labour’s losses in Scotland could be more than offset by Con-to-Lab and Lib-to-Lab swings in England, leading to our estimate that Labour and the Conservatives will each garner ~270 seats, well short of the practical majority of 322 seats, producing a hung Parliament as the initial outcome of GE2015. A possible scenario for the emergence of a working government is a Labour minority government sustained by the SNP votes through a ‘confidence and supply’ agreement for major votes and issue-by-issue on other votes, a weak form of government.
Scotland could produce up to 57 SNP MPs (of a total of 59 seats in Scotland), up from 6 in 2010: from “How many seats to the SNP? [...]
March 10, 2015 ReportsYouTube remains the dominant online video site globally, although competition for the viewer is growing from OTT video and other popular apps. Reach and consumption appear to be slowing in the US and the UK, but YouTube reports strong growth in global watch time as smartphone adoption proceeds. The number and variety of Multi-Channel Networks (MCNs) on YouTube continues to grow. Music video MCN Vevo has so far been the largest single presence on YouTube, but it is being overtaken by the combined Disney/Maker Studios MCN. In contrast to the aggregator MCNs with tens of thousands of channels, studio MCNs have much smaller network sizes and a higher share of owned channels. Their focus on content curation and creation has allowed some to build global audiences of repeat viewers, a unique strength and of significant appeal for advertisers.YouTube remains the dominant online video site globally, although competition for the viewer is growing from OTT video and other popular apps. Reach and consump [...]
February 18, 2015 Reports
Consumer expenditure on recorded music continued its decline in 2014 by about 6% to $18 billion, as purchasing of download-to-own (DTO) albums and singles passed its peak in 2013, adding to the ongoing decline in total sales of CDs that started a decade ago Streaming is now the only growth story left for the industry, and it has a global footprint, being embraced by developed and emerging markets alike, unlike purchasing The US phenomenon of rapidly rising revenues from ad-supported audio streaming services such as Pandora and music video streaming on YouTube is quite unique as other markets currently lack the potential for online advertising.
Consumer expenditure on recorded music continued its decline in 2014 by about 6% to $18 billion, as purchasing of download-to-own ( [...]
February 16, 2015 Reports
News has entered a new phase, defined by the disruptive forces of mobile, social media and video, effecting rapid changes in consumption and the underlying economics for news businesses: the level of change and innovation is rewiring the structure and financial models for news more quickly than many news providers are able to respond. While charging for news looks to be a successful route for some brands, we note that the scale of charging for the industry is substantially smaller than in print. Apart from this, three models are gathering traction: selling audience engagement; selling news services; and selling news to businesses. Each of these options involves very different strategies and opposing objectives which can only be pursued at the same time by those with the deepest pockets. Everyone else has to choose.
News has entered a new phase, defined by the disruptive forces of mobile, social media and video, effecting rapid changes in consum [...]
February 9, 2015 Reports
The iPhone 6 and 6 Plus drove Apple’s most extraordinary quarter ever, with the company’s position in the smartphone market improving on all fronts: explosive growth in China, rising market share in the US and a rising average sales price. By contrast, iPad sales continued to decline in spite of the iPad Air 2’s release, suffering from cannibalisation by the phablet-sized 6 Plus and saturation in developed markets. Apple has a strategy to revive sales, which may bear fruit later in the year. A slate of new products is coming this year, led in the spring by Apple Watch. The question is, will Watch be a significant new source of profit or just a way to protect the iPhone’s dominant position in the smartphone market.
The iPhone 6 and 6 Plus drove Apple’s most extraordinary quarter ever, with the company’s position in the smartphone market imp [...]
February 9, 2015 Reports
Sky plc, the coming together of BSkyB, Sky Deutschland and Sky Italia, has enjoyed an excellent start, as adjusted H1 2015 figures delivered a 5% increase in revenues versus a 3% increase in costs, resulting in EBITDA growth of 7% and with free cash flow up by 25%. The strong financial results were accompanied by strong subscriber growth figures, especially in the operations covering Austria, Germany, Ireland and the UK, while all markets showed large reductions in churn, reinforcing confidence in the strategic approach of Sky plc. It is too early to assess Sky’s delivery of its target group synergies. Individually, the former BSkyB and Sky Deutschland markets may be showing much stronger subscriber and product growth, but they also look to be more exposed to risk over football rights, while Sky Italia has more going for it than may appear at first sight.
Sky plc, the coming together of BSkyB, Sky Deutschland and Sky Italia, has enjoyed an excellent start, as adjusted H1 2015 figures [...]
February 3, 2015 Reports
This Digital UK 2015 report is a collaborative effort by research partners Enders Analysis and EY. Encapsulating materials in the public domain and proprietary to the partners, it sets out to demonstrate the vibrancy of the UK’s digital economy and its potential for growth. Key UK strengths include: Rapid expansion of Next Generation Access (NGA) network coverage and 98% population coverage of 4G by the end of 2015 thanks to private and public investment. 45 million adult consumers on fixed line broadband and 45 million forecast to be using mobile broadband by 2020, thanks to the embrace of smartphones and tablets. Business e-commerce sales to consumers and other businesses of £556 billion in 2013, or 20% of non-financial business turnover, on a par with the US. The UK’s world-class digital infrastructure and its vast pool of smart connected consumers are unique strengths, and could be converted to leadership on the digital business models of the future. However, as important as the tech industry is to the future of the UK, the UK’s many existing businesses in other sectors could also aspire to be ‘fit for the digital age’. This will not only drive value for UK businesses, but if pursued energetically, it will help resolve the UK’s productivity puzzle.
This Digital UK 2015 report is a collaborative effort by research partners Enders Analysis and EY. Encapsulating materials in the p [...]
January 29, 2015 Reports
Ofcom anticipates opposing the use of core DTT spectrum for mobile broadband at WRC-15 in November in recognition of the importance of broadcasting. Assuming the aligned UK and wider European position prevails at WRC-15, DTT spectrum will be exclusive to broadcast until 2030, providing certainty for broadcasters and programme makers to enable ongoing investment in the platform. However, there will be continued pushback from the mobile network operators to expand the spectrum made available to mobile broadband earlier, and broadcast will need to remain as vibrant and competitive as it is today.
Ofcom anticipates opposing the use of core DTT spectrum for mobile broadband at WRC-15 in November in recognition of the importance [...]
January 28, 2015 Reports
Speculation has arisen about a possible acquisition by Sky of Mediaset Premium, the DTT competitor to Sky Italia. The unprofitable platform faces a 50% cost increase this summer due to the start of new football broadcast contracts. Getting rid of competition would allow Sky to raise prices, but also burden it with the new contracts. At best, if it kept the Premium subscribers on DTT to limit churn, Sky would have a small revenue upside. But the regulatory risk looks substantial, including mandated third-party access to the platform and wholesale of content. On balance, we believe that it would be better for Sky to let the situation play out.
Speculation has arisen about a possible acquisition by Sky of Mediaset Premium, the DTT competitor to Sky Italia. The unprofitable [...]
January 26, 2015 Reports
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead of company guidance and consensus expectations. The positive news about subscriber numbers, which saw a sharp jump in share price immediately after the results, was heavily reinforced by Netflix’s announcement of its aim to expand its global base from 50 to 200 countries over the next two years and generate a material profit from 2017. As usual Netflix provided no international details other than to say that LatAm had passed the 5 million milestone in Q4. Elsewhere, BARB data suggest that Netflix passed the 4 million milestone in the UK, while it is still too early to assess the longer term potential of its September launches in France and Germany.
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead o [...]
January 15, 2015 ReportsFor the second year running, 2014 has seen a steep year-on-year decline in total daily average viewing time, which fell by almost 5%, and was again, as in 2013, greatest among younger age demos, especially among children aged 4-15 where the decline reached double figures. Connectivity and the rapidly growing population of smartphones and tablets appear the main, though not the only, causes of a decline that appears general across the main PSB, PSB family and non-PSB channel groups. The decline nevertheless varies by channel genre, with the more youth oriented, such as Children and Music, feeling the connectivity squeeze the most. Whilst the great majority of non-PSB channels are only available on the pay-TV platforms, the DTT platform provides a significant audience and advertising contribution (ballpark estimate of £150-200 million per annum) to the relatively small group of leading free-to-air non-PSB channels, which are also less constrained in developing their online initiatives than the mixed advertising/subscription non-PSB channels on the pay-TV platforms.For the second year running, 2014 has seen a steep year-on-year decline in total daily average viewing time, which fell by almost 5%, and was again, as in 2013, [...]
December 17, 2014 Reports
Underpinned by a legislative regime since the 1970s designed to prevent sex discrimination and unequal pay between men and women, the UK has enjoyed successive and ever bigger waves of young women gaining the education and skills to enter the work force as professionals, now standing at 5 million strong. The UK also boasts 1 million female-led companies and the digital age has greatly expanded the opportunity for entrepreneurship for women to be their own bosses. The workplace inflicts a stiff ‘motherhood penalty’ that produces a yawning gender pay gap for women in their 40s and 50s as men more readily gain access to managerial and executive positions, radiating from there to board positions, where Lord Davies’ initiative for FTSE companies has led some to endorse the merit of a diversity of directors on boards. On the whole, however, employers often overlook the potential to optimise talent management practices to accommodate maternity and support the work-life balance of employees, prevent sexism and unequal pay, and offer women an equality of opportunity to accede to top jobs. Companies that do so could be more likely to establish a lasting competitive advantage and the UK economy will gain too from releasing the talent and energy of women at work.
Underpinned by a legislative regime since the 1970s designed to prevent sex discrimination and unequa [...]
March 1, 2012 ReportsIn 2011, UK admissions were up 1% on 2010 and box office receipts rose 5% to just over £1 billion. Retail revenues were flat and screen advertising fell sharply. 3D took a lower share of box office receipts in 2011 on the success of British content and the rise of 2D in 3D dual release box office receipts. Although UK cinema-going appears insulated from home entertainment trends such as streaming video content, the weak slate of films in 2012 is a risk factor for admissions.In 2011, UK admissions were up 1% on 2010 and box office receipts rose 5% to just over £1 billion. Retail revenues were flat and screen advertising fell sharpl [...]
June 13, 2006 ReportsIn the attached report we are publishing the 2006 edition of our regular review of UK mobile user trends, based on a survey of 1,000 adults. We look at handset ownership, replacement trends, handset manufacturer choice, network operator choice, camera phone ownership and usage, 3G handset ownership and usage and, finally, interest in Mobile TV.We cannot see how Phones4U can fulfil the volume requirements without significant damage to its business and competitiveness, and Vodafone may also suffer from a vengeful CPW encouraging its subscribers to churn away. Vodafone appears to not understand that it is its competitors that are driving up subsidies rather than its business partners, and is instead trying to shoot the messenger.In the attached report we are publishing the 2006 edition of our regular review of UK mobile user trends, based on a survey of 1,000 adults. We look at handset [...]