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May 23, 2019Monthly Australian TMT Wrap: April 2019
Monthly wrap, ReportsWe have seen an uptick in M&A activity in April on the back of a relatively quiet period in March. Strong deal activity has been distributed throughout the telecommunications, media and technology industries.
May 14, 2019Facebook doubles down on advertising
Flash Report, ReportsAfter 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.
April 16, 2019Google and game streaming: double or quits
Market Outlook, ReportsGoogle’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, 2019Monthly Australian TMT Wrap: March 2019
Market Outlook, ReportsThe 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, 2019Mobile Sports Streaming, Gaming and E-sports: A revenue opportuni [...]
Market Outlook, ReportsThere’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 5, 2019Apple’s showtime: everybody gets a service, partners get pennie [...]
Flash Report, ReportsApple 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 3, 2019eSports and Broadcasters – to TV or not to TV…
Flash Report, ReportseSports 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, 2019Apple Card – allowing the fox into the henhouse…
Focus Report, ReportsIn 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.March 22, 2019Monthly Australian TMT Wrap: February 2019
Monthly wrap, ReportsFebruary saw an increased level of market activity in comparison to January. The uncertainty around the TPG-VHA merger continues, with TPG is likely to write down the value of its spectrum licenses and mobile network assets in event the merger doesn’t get ACCC approval.
March 15, 2019TikTok’s challenge to Western social media
Flash Report, ReportsLaunched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe. Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year. Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination.
March 13, 2019Equity crowdfunding in Australia: We have lift-off
Market Outlook, ReportsEquity crowdfunding has been celebrated as a game-changing alternative to venture capital and traditional business loans but has until recently been off limits to most retail investors. With the lifting of Australian restrictions on who can use equity crowdfunding platforms, there is cautious uptake from consumers and start-ups – with several platforms establishing a clear lead – but the claim of outsize returns will take time to be tested.
March 11, 2019ACCC’s Digital Platforms Inquiry – more regulation on the hor [...]
Flash Report, ReportsGoogle and Facebook have made their submissions relating to the ACCC’s Digital Platforms Inquiry. Both tech giants have focused their attention on the ACCC’s recommendation for the need to establish an "algorithm" regulator. If implemented it will have major consequences to the tech giants and potentially other players.
March 8, 2019GDPR tested on Google, ad tech and Facebook
Flash Report, ReportsRecently issued regulator rulings on Google, ad tech companies and Facebook challenge prevailing online advertising practices of obtaining user consent under the EU’s General Data Protection Regulation (GDPR). Rulings from France on Google and ad tech partners of media owners called them out for inadequate disclosure to users, and excessive merging and processing of data. In a landmark precedent for Germany, the Federal Cartel Office found that Facebook lacked “freely given” consent from users, calling its terms “exploitative” and an abuse of its dominant position, also harming competitors.
March 7, 2019Mobile payments – New Zealand moving from cashless to walletles [...]
Flash Report, ReportsThe New Zealand payments ecosystem has seen considerable disruption in the last decade with new technologies, innovations and new industry players changing the way we pay. In particular, contactless payments has laid the foundation for mobile payments with consumers increasingly looking to ditch their cards and wallets in favour of digital wallets or mobile payment apps.March 4, 2019MWC – all very exciting but where’s the money?
Flash Report, ReportsThe combination of 5G, AI, IoT and big data were evangelised at MWC as generating massive scope for the transformation of multiple industries. That much is probably true, but it is the tech and consultancy companies who will likely receive the benefits, with connectivity revenue likely to be modest. For the operators, 5G brings more capacity much needed for hungry smartphone users, and perhaps the opportunity to transform themselves into a leaner operating model.February 20, 2019Monthly Australian TMT Wrap: January 2019
Monthly wrap, ReportsJanuary was a rather quiet month in the Australian M&A space, with the ELMO Software/ BoxSuite’s binding sale agreement as the only major transaction. The launch of 5G networks in Australia continues with the results of the 3.6GHz spectrum auctions, though TPG will scale down its deployment due to the Huawei equipment ban.
February 13, 2019AI in Insurance: Disruption Assured
Market Outlook, ReportsArtificial intelligence (AI) has enormous potential to disrupt across the data- and process-heavy insurance value chain. The growth of AI startups and adoption of (AI) by Australian insurers began in earnest over the last two years. The approach taken so far is one of collaboration rather than direct competition between incumbents and disruptors.
February 5, 2019Why does Amazon sell the Echo?
Flash Report, ReportsSmart speakers like the Amazon Echo and Google Home accelerated their prodigious rate of adoption in Q4 2018, and we expect they will soon be in 20% of UK homes. Amazon and Google price devices low to drive adoption to mass-market levels and win the race to own the home, in contrast to Apple’s profit-making strategy for its speaker. Echo’s main strategic benefits to Amazon are the scope for data collection and the intelligence it supports, and gatekeeping partners’ access to customers.Sector Technology.
January 29, 2019AI in Financial Services: Who wins the future of banking?
Market Outlook, ReportsFinancial services are ripe for AI disruption; they are data-heavy, with significant potential for automation. The question is not if, but how fast, and how profoundly, would AI reshape the competitive landscape. In Australia, the AI ecosystem is exciting, but has yet to reach critical mass.
January 21, 2019UK advertising spend: Brexit year forecasts
Market Outlook, ReportsOur central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019. The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms. In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession.January 17, 2019Apple and Amazon bury the hatchet
Flash Report, ReportsAmazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations. The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify. The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews.
January 16, 2019Disruption in Australian Super: Only skin deep?
Focus Report, ReportsAustralia’s superannuation system is broadly admired. Disruptive entrants have thus far focused on user experience, ethical alignment and branding rather than fees or performance. However, regulatory change will drive significant shifts in the industry in the coming years.December 18, 2018UK Vertical marketplaces overview and property classified outlook
Market Outlook, ReportsThe UK consumer’s loss of confidence since the June 2016 referendum vote in favour of Brexit has reduced the revenues of both estate agents and auto dealers, with knock-on effects on their media spend, entrenching further the leadership positions of Rightmove and Auto Trader respectively. Only the UK’s recruitment marketplace is buoyant with a record level of vacancies, benefiting general recruitment aggregator Indeed, although deepening Brexit gloom among businesses will rapidly melt away vacancies. With internet users flocking to portals and away from print media, advertisers have followed suit with media spend on these portals to stimulate purchaser interest, although transactions are still conducted offline. Facebook and Google, which have long histories of contesting markets for local advertisers with little success, have re-entered classifieds. Facebook Marketplace is now accepting listings from estate agents and dealers, expanding from C2C to B2C in homes and cars. Google Jobs launched in the UK in July 2018 and enjoys partnerships with all the major portals other than Indeed. The sharp decline in sales and shift to lettings, sluggish price growth and pressure on estate agents’ commissions, are making marketing key to driving transactional activity in a longer sales funnel. Rightmove’s revenues are on track for a 10% increase in 2018 on the uplift in average revenue per agent (ARPA). Zoopla's market share rose with the end of OnTheMarket's 'one-other-portal' rule for shareholders upon its AIM listing in February 2018.
December 4, 2018SVOD in the US and UK: A tale of three-player markets
Focus Report, ReportsThere is a belief in some quarters that there is space for a myriad of large SVOD services in the UK. Like the UK, the US market is dominated by three services, but there is also evidence that there is appetite for further offerings: Netflix households tend to take a secondary SVOD service to complement Netflix’s content library, and are likely to take up a third service, and in some cases a fourth and fifth. Potential domestic UK services will struggle to compete with the resources that foreign tech giants can marshal, along with NOW TV’s steady position and top content.
