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  • September 25, 2017

    Netflix’s edge over broadcasters

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    The development and utilisation of streaming technologies has allowed major SVODs, such as Netflix and Amazon, to attain a growing proportion of video viewing. However, tech is just one of the advantages held by these services: plateauing content expenditure, the inability to retain IP and inconsistent regulatory regimes hamper the efforts of the UK’s public service broadcasters. The localised nature of audience tastes, as well as the diversity of PSB offerings remain a bulwark to aid in the retention of relevance but content spend cannot lag
  • September 5, 2017

    Network TEN – SOLD (probably)!

    A late twist in the Network TEN saga will see the Australian media asset most-likely owned by US media giant, CBS Corporation.
  • August 28, 2017

    Voicing concerns: virtual assistants and the media

    Voice, and the smart virtual assistants that power voice interfaces, will be a key transformative force over the next five years. Any business providing content or services via digital means is potentially affected, as these virtual assistants promise a single front end for all digital services, representing an extraordinary concentration of control over discovery, delivery and data. Media businesses will clearly be affected. But there is an opportunity for them right now to influence the assistant providers to their advantage, a window that will not stay open forever
  • August 16, 2017

    Channel 4 relocation and dislocation

    Channel 4 revenues and content spend hit record levels in 2016, but the company faces a declining TV advertising market in 2017 due to a weaker economy and competition. The company’s ability to deliver its unique remit to audiences and producers is also under pressure from Government proposals to move staff outside London. Because Channel 4 can only commission, a move will not stimulate a creative cluster. Risks to the remit include the loss of talent and lower content spend due to higher opex
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  • August 9, 2017

    Sky progress against headwinds: FY 2017 results

    Sky's full year results for fiscal 2017 are largely in line with company guidance on revenues, costs and synergies given on Investor Day last October, while the company expects further progress in fiscal 2018. Operating profits were badly hit by the massive increase of £629 million in annual payments to the Premier League, however, due to revenue and cost efficencies elsewhere, they fell by just £97 million, testifying to the overall strength of the Sky business. The results presentation revealed a clear sense of strategic direction, supported by much glossy and positive detail, yet revealed relatively little about the headwinds that Sky and other pay-TV operators now face, including the evident decline in Sky UK DTH subscriptions
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  • August 4, 2017

    ITV Studios offsets weak NAR: ITV H1 2017 results

    ITV H1 2017 results are in line with guidance contained in its Q1 trading update issued in May, while full year guidance has remained largely unaltered. The 8% decline in TV NAR, timing of programme deliveries and increased business investment were main reasons for the 8% drop in group EBITA despite growth elsewhere limiting the decline in group external revenues to 3%. ITV continues to deliver strong group profit margins of close to 30%; however, online poses several threats to TV NAR. The threats can only be increased by the quest for retransmission fees, whilst the spate of production acquisitions raises questions about risk management
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  • August 4, 2017

    Facebook video: escaping the News Feed

    Facebook video consumption - and video ad revenue - is still concentrated on the mobile News Feed, limiting engagement growth and appeal to brand advertisers in the interim period before VR and AR go mainstream. Features like a dedicated video hub and ad breaks have seen limited deployment, likely as a result of lukewarm user reception, but Instagram Stories holds promise. To attract long-form viewing Facebook is cautiously investing in original TV content and sports rights, but is late to the game over audiences on connected TVs
  • July 26, 2017

    TalkTalk Group Q1 2017/18 results: Still growing the base

    TalkTalk sustained positive broadband net adds in the June quarter, adding 20k to its base, largely driven by reduced churn, which was largely driven by re-contracting a large proportion of existing customers onto its new cheaper bundles. Unfortunately, this had a negative effect on revenue growth, with Group revenue growth (ex-carrier) dropping to -3.2%, as the new cheaper bundle adoption diluted ARPU, but the company remains confident that revenue growth will turn positive for the full financial year as the ARPU dilution effect annualises out. The company recently announced a price rise due in August of around 5-6% for customers not on its new cheaper bundles (around 38% of its total broadband base), which will help with the ARPU turnaround, but may make maintaining positive broadband net adds more challenging
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    July 26, 2017

    European subscription and pay-TV monitor

    Across Europe, markets are becoming more competitive. Incumbent pay-TV paltforms (e.g. Sky or Canal+) face increasing threats from both internet-based services (e.g. Netflix and Amazon), and telecoms operators.Telecoms providers are proving the most potent challengers as they enter the premium football rights market to create attractive triple and quad play bundles – examples include BT, SFR and Telefónica. The latter is now the main pay-TV operator in Spain whereas France’s Canal+ has entered into a strategic alliance with Orange. Across the top five markets (UK, France, Germany, Spain, and Italy), Sky remains the leading operator with an estimated 21.5m video subscribers, twice as many as Netflix
  • 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
  • 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
  • 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 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

    Ten Network– going once, going twice, gone…?

    Artificial Intelligence (AI) is the biggest technological revolution since the digital age. Businesses and industries will experience a huge boost to productivity and efficiency, and save costs across their entire value chains. Economic, legal and ethical challenges need to be overcome for AI to become widespread.

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  • 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 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 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

    ITV et al. facing the NAR squeeze

    ITV’s latest trading Q1 trading update has sent a clear warning signal to the commercial TV industry as it gave guidance of 8-9% year-on-year decline in TV NAR (Net Advertising Revenue) in H1 2017. A substantial portion of the projected decline may be attributed to economic issues and relatively tough Q1 comparatives as per ITV guidance; however, there are clear signs of growing intrusion by online video advertising on traditional broadcast TV NAR. A review of trends points to major biases that swing the market towards the online space. It is time for all to reconsider both the impact of CRR (Contract Rights Renewal) in restraining TV NAR and the factors – by no means all sound – pushing up online video spend

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  • 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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  • Free
    May 25, 2017

    Disruption in Payments: Time to throw out your wallet?

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    As the usage of cash declines, we are trending towards a cashless society supported by new payment technologies.Within the next decade, cashless methods will be preferred, and have mostly positive implications for both businesses and consumers.However, cash will still be with us and being used for well over the next 20 years.