TV

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  • 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.

  • UKTV 2016 results: viewing continues to climb, what awaits online
    UKTV 2016 results: viewing continues to climb, what awaits online
    May 19, 2017

    UKTV 2016 results: viewing continues to climb, what awaits online [...]

    2016 was another good year for UKTV, with appreciable growth in revenue and linear viewing share; a trajectory the product of a sensitive pay/free balance of its channels, investment in productive EPG slots and development of its original programming suite. Recent deals with both Sky and Channel 4 will go some way to providing financial stability, allowing UKTV to invest with more certainty in new content and encouraging further development of its online proposition. UKTV Play has underperformed, chiefly due to a lack of content. But with plans to significantly ramp up both its offering and marketing spend, it may well unlock further audiences; specifically targeting elusive 16-34 year-olds.
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  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    May 5, 2017

    TV platform forecasts to 2026: DTT and pay-lite set to grow

    Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today. Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTT-only homes is set to increase by 13% by 2026. The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV—which are of greater appeal to younger audiences.

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  • May 3, 2017

    People, not devices: Audience buying in a cross-device world

    Cross-device identity profiles are used to stitch together fragmenting online ad audiences, but also to enable new links between advertising and marketing, across European markets. This moves value from media itself to understanding each consumer and how they access content and services on proliferating connected devices. By 2020 we predict that 58% of all UK online ad buys by value will make use of high-quality audience IDs, led by the largest advertising platforms but limited by privacy regulation and cost.
  • May 3, 2017

    Sky still on track: Q3 2017 results

    Sky delivered 5% year-on-year revenue growth over the first nine months at constant exchange rates, although operating profits fell due to several factors, most notably the massive step-up in UK Premier League TV payments under the new contract. On closer inspection, relatively weak UK & Ireland Q3 revenue growth compared with previous quarters largely reflects one-off special factors . Otherwise, positive quarters for Sky Germany & Austria and Sky Italy and improving cost efficiencies suggest that the Sky Group remains broadly on track to deliver its Investor Day 2016 guidance objectives.

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  • March 23, 2017

    Video viewing forecasts to 2026

    2016 was yet another year in which we saw big changes in the UK’s video consumption habits amongst the under-45s, with little let up in the decline of traditional broadcast linear TV viewing for the younger age groups. Online video-on-demand services will continue to grow, partly at the expense of traditional TV audiences. We also expect the overall volume of viewing to rise, mainly due to wider production of and access to short-form content. Despite these changes, conventional broadcasters look to be strong for years to come—we estimate they will still account for 80% of all video viewing in 2026
  • March 22, 2017

    360 and Virtual Reality: a new angle for video entertainment

    The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium. Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment. 2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers.

  • March 21, 2017

    21CF and the bid for Sky: state of play

    Secretary of State Karen Bradley has intervened on two UK public interest grounds in 21CF’s bid for 100% ownership of Sky: media plurality, as in 2010, and a commitment to broadcasting standards, new in 2017. Ofcom will assess any implications of 21CF’s full control of Sky on whether it is ‘fit and proper’ to hold a broadcast licence, reporting back on 16 May. Undertakings are a live issue in the 2016 bid, notably to protect the editorial independence of Sky News, noting the bid faces determined opposition from certain quarters.
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  • March 16, 2017

    BT tightens grip on Champions League TV

    The latest auction of UEFA Champions League televised UK rights has seen further high inflation (32%) as BT renewed its ownership for the three seasons from 2018/19 for an annual payment of £394 million. Although BT annual payments are to increase by £95 million from 2018/19, the new contract offers added commercial attractions, though we expect BT’s efforts to monetise them will fall some way short of the cost increase. However, BT had to win to cement its position against Sky as a strong number two in UK premium pay TV and we expect weaker future inflation of premium football rights. For Sky followers, the focus is now on the UEFA auctions in Germany and Italy, where the outcome is far from certain.
  • March 14, 2017

    The last demographic: How is TV catering for its oldest and most [...]

    Linear television's audience is ageing; with the drop in viewing by younger demographics, consistent viewership by the over 65s has seen them increase their share of total viewing since 2010 from 24% to 31%. The difficulties and efforts to re-engage with the younger cohorts are well documented. But what of the resilient, older group that forms the stable core of the television audience? Conspicuous attempts are being made to create specific shows targeted at the oldest viewers, but outside of limited categories, creating relevant programming may be more difficult than expected.
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    March 8, 2017

    The connected evolution of UK TV platforms

    The past 14 months have seen a flurry of activity from the major UK television platforms, with all but one releasing a revamped version of their television offering; a neccessary reaction to the rise of VOD consumption and the threat this poses to traditional models. The result is 'connected' offerings, with the major players aiming to exploit the impact of this technology by seamlessly integrating on-demand capabilities, and in doing so mitigate the further shockwaves resulting from its emergence. No offering is likely to single-handedly alter the current subscriber landscape radically; with the pay platforms' each taking a unique—and to a degree—entrenched path that affirms its core consumer base, the greatest shifting of sands will likely come from changes in consumer trends or content quality.

  • March 7, 2017

    Mobile World Congress: a look at tech & media

    Smartphone hardware did not take centre stage at the year’s premier mobile industry event in Barcelona, with license-built Nokias generating as much excitement as flagship smartphones from HTC, Sony and Samsung. In VR, AR and IoT, the most impressive signs of progress were under the hood rather than in flashy device announcements – as the actual use cases become more specific, so does hardware and software. Concrete business applications around the personal data generated by connected mobile devices was a major theme, with new types of automation and personalisation in services and media – and a growing market for security.

  • February 28, 2017

    ComCom says no to ‘Skodafone’ – What now?

    The proposed merger of Sky TV and Vodafone in New Zealand was rejected by the Commerce Commission on 23rd February 2017. We discuss the reasoning behind this decision as well as the wider implications for Sky TV, Vodafone and the industry.
  • February 27, 2017

    Amazon’s ad business: shoppers for sale

    Amazon’s marketing services bring in a growing stream of direct, high-margin revenue, but their main role is still in supporting vendor partnerships. Amazon uses customer profile data to profit from its own media and that of others, illustrating the value of a direct customer relationship in online advertising. In the future, Amazon’s moves into video content and voice interfaces are likely to significantly expand ad inventory, but maintaining the trust of shoppers is not straightforward.

  • February 8, 2017

    Apple TV: Is video streaming taking the lead in TV consumption?

    The video streaming market continues to grow with a greater number of devices being sold year on year and the four big players in video streaming devices continue to compete for market share. We discuss the changes to consumer behaviour driving this growth and what impact this might have on the wider TV market and look further into Apple TV and how their new update has affected their position in the market.
  • February 1, 2017

    BT Q3 2016/17 results: Strong core, let down elsewhere

    BT had a solid enough quarter, with revenue and EBITDA growth dipping due to pre-warned temporary factors, consumer continuing to outgrow business, and very solid operating trends evident, especially in high speed broadband and mobile. This has of course been entirely overshadowed by the profit warning, with prospective weaknesses in UK public sector and international corporate of far more concern than the contained, albeit surprising, accounting irregularities in Italy. BT has a large share of revenue and a much smaller share of profit from corporate/government data network/IT services, which are erratic in nature and arguably in long term decline in their current form, and without major changes they will continue to be so.

  • January 27, 2017

    Netflix at 10: still growing, still spending

    Netflix celebrated the 10-year anniversary of its streaming service by posting its largest quarterly rate of subscriber growth, adding just over 7m new subscribers in Q4 2016, smashing its own forecast for the period of 5.2m.

    5.12m of the new subscribers were for its international services, attributed to acceptance of its growing suite of English language original programs. But growth is just as likely related to the bolstering of overseas offerings with acquired programming, after launching worldwide with relatively small libraries.

    While re-establishing confidence after a period of doubt when missing targets in Q2, challenges await; most notably concerns around net neutrality, diversifying content genres, and the open question as to how effectively original programming will be able to carry the service.