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  • December 1, 2014

    UK quarterly internet trends Q2 Q3 2014

    The shift to mobile continues, with the smartphone replacing the laptop as the device with the most users, although the rate of tablet adoption has slowed somewhat. This shift will change the online revenue mix, with mobile being better suited to content, native and video advertising than traditional display and search. Mobile devices also now account for the majority of visits to retail sites, and more than a third of spend online. We see large age-based differences across all internet activities, but the split is particularly significant for smartphone adoption and usage, with only a quarter of over-55s using smartphones, and only a third of those reporting downloading apps.

  • November 7, 2014

    Sky Deutschland delivers weak ARPU ahead of BSkyB takeover

    The Sky Deutschland platform, which will fall under BSkyB's control by mid-November, continues to post strong subscriber growth, thanks to steady gross additions and declining churn. However, average revenue per user remains flat year-on-year, and declined sequentially for the first time in over four years, raising questions about Sky's capacity to sustain the recent pace of total revenue growth. On current trends, cash flow break-even will not happen before the last quarter of calendar 2016, months before the possible price hike from a new domestic football rights auction. Meanwhile, deployment of Sky's connected TV services appears to be keeping OTT competitors at bay.

  • October 20, 2014

    The TV/digital advertising debate

    In the last few days we have spoken to key authorities in advertising in the US, UK and Europe. We have been exploring the critical debate: the degree to which TV consumption and TV advertising are shifting and will shift to digital. Recent media coverage has argued traditional TV business models could start to unravel in the medium term. We disagree.

  • The Internet of All Things - Towards the Hyper-connected World
    The Internet of All Things - Towards the Hyper-connected World
    October 1, 2014

    Privacy and the internet in the UK

    UK consumers have embraced data-hungry services like Facebook and Google, but many also have concerns about privacy online; young people have a more positive view of the trade-off and know how to avoid targeted advertising. Businesses that are conscientious about consumers' data gain their trust, and the gap between trusted brands and the market as a whole may grow substantially in the future. Despite Edward Snowden's revelations on ‘Big brother snooping', the UK Government has secured vast access to communications data without serious challenge to date.

  • September 18, 2014

    Indyref settled for now, Devo-Max ahead?

    In a huge victory for the Union, 55% of Scotland's voters said ‘No thanks' to independence. The follow-up to the cross-party pledge on devolution shifts to London and will be dictated by the winner of the General Election on 7 May 2015; the Conservatives are aiming for a wider constitutional settlement for England to resolve the West Lothian question, while Labour will stick with a minimalist approach to preserve Scottish MPs. The 1.6 million votes for independence demonstrate the strength of the separatist movement; we expect the SNP to continue its mission, actively supported by the Scottish Government, and to renew its mandate for independence by winning the May 2016 election with a solid majority.

  • September 15, 2014

    Wrists and rewards: Apple’s announcements

    Apple has fulfilled its promise to roll out innovative new products this year, launching Apple Watch into the nascent wearables market and Apple Pay, a new mobile payments service, as well as moving the iPhone into ‘phablet' territory. The larger-screened 6 and 6 Plus should revive growth in iPhone sales and ASP, as well as providing another variable to compete in the mid-tier handset segment; Apple Pay further enhances Apple's lock on its customer base. Apple Watch's likely impact is harder to discern; to date sales of smartwatches have been lacklustre but although Apple's offering is the most commercially viable yet, it still feels like a solution in need of a problem.

  • September 14, 2014

    Media in an independent Scotland

    Claire Enders set out the implications of a Yes vote in the Scottish independence referendum for the media available in Scotland. She critically examines the SNP's plans for a Scottish media, and argues that Scotland's small population would make an independent media hard to sustain. When the effect of a nationalist 'nation-building' project is factored in too, the overall results would be serious costs to the quality of democracy Scots enjoy.

  • July 13, 2014

    UK quarterly internet trends Q1 2014

    The UK's love affair with mobile devices continued in Q1 2014, with four times as many smartphones and tablets as PCs shipped during the quarter. Smartphones now account for three quarters of mobile phone sales, and shipments of tablets exceed sales of PCs, though the latter improved during the quarter. The device mix for internet access is changing rapidly: more people now have a smartphone than have a laptop in the home, though the overall PC audience (including desktop) is still larger. For many people, smartphones are becoming the core device to get online, and almost half of all households have a tablet. Commercial revenues derived from mobile devices still trail their share of internet usage but the gap is closing: in Q1, smartphones and tablets generated a third of e-retail sales, while mobile ads represented a fifth of internet search and display advertising.

  • June 19, 2014

    Putting out Fires: Amazon’s phone

    Amazon has announced a new smartphone, the Fire Phone – a premium-priced device with some unique features and solid hardware; only available in the US at first, its high price and small number of apps limit its appeal. Although initial sales are likely to be low and mainly confined to Amazon Prime members, in the short term the purpose of Fire Phone is simple: to drive increased mobile sales of everything Amazon sells. In the longer term, Amazon needs to avoid being locked out of digital media purchasing on smartphones, increasingly the primary connected device – this is a first, although insufficient, step in that direction.

  • June 4, 2014

    TV and video advertising boom in the UK

    Strong growth in the UK economy has created a very positive short term outlook for display advertising, with TV Net Advertising Revenues (NAR) expected to increase by 5% in 2014. That bright prospect is nonetheless overshadowed by online video advertising, where 2014 is expected to add almost £200 million to the estimated £300 million spent in 2013. YouTube is leading the way, but the TV broadcasters also stand to benefit. All the indicators point to yet more rapid growth in online video advertising over the next three to five years. So far it has had little apparent impact on TV NAR, but this should change from 2015 as TV and online video become more closely meshed.

     

  • May 13, 2014

    The media day

    We have estimated the breakdown of the media day for UK adults (16+) using standard industry sources. The charts in the attached PDF present a picture of overall time spent with different media in the UK. Over the last 10-15 years the digitisation of content, coupled with internet connectivity and device proliferation, particularly recently with smartphones (now at 63% penetration) and tablets (35%), have given individuals far more ways and means to consume media and communicate with each other. However we also note that 'traditional' media has held steady and still accounts for 6 hours and 50 minutes of daily media time. We have not yet arrived in a post-print, post-TV world, rather a multi-layered one where consumers access media from a wide variety of sources and devices.

  • May 5, 2014

    Facebook extends its ecosystem

    At its f8 developer conference, under the slogan “Build, Grow, Monetise”, Facebook rolled out a slew of new policies and initiatives designed to boost its appeal amongst users, app developers and advertisers. In its drive to encourage developers to build more apps that support the social network, Facebook is attempting to position itself as a “cross-platform platform” with 1 billion+ users that sits on top of iOS, Android and other mobile operating systems. Key announcements included App Links, an open source solution enabling linking across apps, which may drive additional usage, and Facebook Audience Network, an app ad network rolling out this year, which should drive additional margin and could challenge Google AdSense.

  • April 27, 2014

    Facebook: mobile acceleration continues

    Facebook has successfully transitioned its business to mobile, with the number of mobile users now exceeding those on PC, and mobile newsfeed ads accounting for nearly all revenue growth and over half of total revenue, now on a $10 billion annual run-rate. North America and Europe continue to account for the vast majority of revenue and revenue growth, despite flat audience penetration in both regions, as increasing mobile consumption and advertiser take-up have driven sharp increases in ARPU, particularly in the US. Despite tougher comparables and declining desktop revenue going forward, the rapid ramp up in mobile ad revenue, plus initiatives such as video ads, ads on Instagram and planned mobile ad network, should deliver strong growth through 2014 and into 2015.

  • April 21, 2014

    UK internet device and consumption forecasts to 2020

    The boom in mobile device sales accelerated in 2013, with more than four times as many smartphones and tablets as PCs shipped in the UK: smartphones accounted for three quarters of mobile phone sales, and shipments of tablets surpassed PC sales, which fell sharply. By 2020, we forecast that smartphone penetration will rise from two thirds of the population to over 80%, and the number of tablet users will exceed 60%, outstripping the PC internet audience, which we expect to shrink. We now predict that the majority of internet usage will go to mobile devices this year and three quarters by 2020. Mobile is well on its way to becoming the predominant access platform in the UK, as in the US, and most, if not all, future growth in commercial internet revenues will be driven by mobile devices.

  • April 16, 2014

    Netflix extends its tightrope part 2: Abroad

    Netflix is making steady progress with the global expansion of its streaming business, which now makes up 20% of total revenues, but is still far short of its long term vision of 70-80% share. Building a large presence in Europe is vital to long term success. The signs are that Netflix is steadily growing its UK and Ireland base, and performing even more strongly in the Nordics and possibly also in the Netherlands. We are reaching the most critical point of Netflix's European journey, as it contemplates entry into the key markets of France and Germany. Germany looks the more obvious first choice, with rumours of a September launch, but ideally Netflix will want an autumn launch in France too, if it can handle the extra strain on budgets.

  • April 3, 2014

    Prime time: Amazon enters the living room

    Amazon has entered the increasingly crowded digital entertainment TV device marketplace, one which could be strategically more important for the ecommerce giant than tech rivals Apple and Google. The frictionless integration of entertainment and ecommerce on TV represents a bigger consumer milestone than competitor services are offering, and Amazon's brand has huge appeal, though at present it has less market traction for streaming than it does for other products. Content owners and broadcasters remain the real TV gatekeepers, with integration of TV and digital a service-level pipe dream for now, and so Amazon will likely have to accept being one of many, rather than the runaway winner as it is in books.

     

  • April 2, 2014

    Netflix extends its tightrope part 1: At home

    The core US long form streaming subscription business, so vital to Netflix prospects of long term global as well as domestic success as competition increases, shows no sign of slowing, while guidance points to Q1 2014 as another strong quarter Although market research indicates a positive brand image, boosted by Netflix's entry into original content commissions, Netflix cannot afford to slacken in its efforts to build its subscriber base due to strong upward competitive pressures on content obligations Content delivery is the other big cost challenge. There is no guarantee that the recent deal with Comcast will last, as the leading ISPs contend with conflicts of interest that arise from wishing to support the traditional model of linear TV but also to exploit the potential of long form online video.

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    March 18, 2014

    Creative UK

    This report on the digital transformation of the creative industries in the UK was produced by Enders Analysis and research partner Bain & Company, to support the Creative UK event organised by Enders Analysis and held at the BT Centre on 18 March 2104. The event is sponsored by BT, Enders Analysis, Bain & Company, Powerscourt and Shine Group. The UK's rate of business creation since 2010 has been especially strong relative to other major economies, backed by a solid trend to self-employment. Business creation in the creative industries – music, film, television, advertising, the arts, book and newspaper publishing - has been a major contributor, up 17% since 2010. Underpinned by a generation of investment in broadband, digital technology is changing how many creative-sector companies produce and distribute products. But experiences vary widely:

    For advertising and marketing companies, the transition has had a benign impact on revenue; online's share of total advertising was at 36% in 2012, placing the UK in the vanguard of digital advertising. Television has remained relatively resilient to disintermediation by the internet and TV remains the single biggest advertising medium. Consumer-facing newspapers have undergone a painful transition as pennies from digital replace pounds from print and ad sales. Recorded music sales halved in the decade to 2013, but digital accounted for 50% of revenues in 2013, and the corner has been turned; artist management is being transformed by the use of online media. New online pure play businesses have sprung up, like Rightmove and Zoopla Property Group, AutoTrader, LoveFilm and Spotify. The crafts industries have been transformed by online marketplaces like Etsy, which allow them to serve their customers wherever they may be. YouTube is emerging as an important outlet for UK creative talents.

  • March 7, 2014

    Slides for Media & Telecoms: 2014 and Beyond, part 2

    Slides from the presentations by the following speakers at the Media & Telecoms: 2014 and Beyond conference on 4 February 2014: James Purnell, BBC; Dido Harding, TalkTalk; NIcola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco.

  • March 7, 2014

    Media & Telecoms: 2014 and Beyond, part 2

    Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts of the talks given by seven of those speakers: James Purnell, BBC; Dido Harding, TalkTalk; Nicola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco.

  • March 5, 2014

    Media & Telecoms: 2014 and Beyond, part 1

    Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts of the talks given by six of those speakers: Sir Martin Sorrell, WPP; Gavin Patterson, BT; Andrew Griffith, BSkyB; Thomas Rabe, Bertelsmann; David Dyson, Three UK; David Abraham, Channel 4.

  • March 5, 2014

    Slides for Media & Telecoms: 2014 and Beyond, part 1

    Slides from the presentations by the following speakers at the Media & Telecoms: 2014 and Beyond conference on 4 February 2014: Andrew Griffith, BSkyB; Thomas Rabe, Bertelsmann; David Dyson, Three UK.

  • February 21, 2014

    Facebook & WhatsApp – an expensive limited defence

    In an audacious move to minimise the risk of mobile social disruption, Facebook is to acquire leading messaging app Whatsapp for up to $19 billion, or $42 per user, or 11% of Facebook's current market cap. Messaging platforms are becoming the new social media, particularly for younger demographics, and while Facebook/WhatsApp will be huge in mobile, other services could still side-step into Facebook's territory. The price for WhatsApp may be justifiable to counter the threat, but Facebook has only bought one of many, and paying a full price may encourage the others; expensively buying every competitor does not feel like a long-term strategy.

  • All together now – Why aggregation is the future of TV
    All together now – Why aggregation is the future of TV
    January 23, 2014

    Where have all the young viewers gone?

    Watching traditional linear TV has shown a sharp decline among younger adults over the last two to three years and the question is how far it has to go before bottoming out. This report explores the causes and presents our forecasts up to 2020. We see the main causes of this as the growth of online connectivity associated with the proliferation of screens via smartphones and tablets, the increasing functionality of these other screens, the increasing population of connected TV sets and the growing volume of long and short form content that can be accessed over the internet. Examination of current “connectivity” trends suggests that 2013 will prove the peak year of decline. Thereafter we expect trends to stabilise over the next three or four years without fundamental change to the linear TV landscape.