July 15, 2015 Reports
The recently elected Conservative government took less than a week to negotiate a licence fee settlement with the BBC immediately prior to Charter Renewal in which it will offload the government’s over-75s licence fee subsidy on to the BBC in return for various financial benefits. But, there are strings attached to a financially poor settlement, making it very difficult for the BBC to protest in the run-up to a charter that promises a major diminution in its ability to contribute to the UK creative economy. The only possible gainers are the commercial media, though the benefits may prove much less than some anticipate, however pleased the newspaper publishers may be by the Chancellor’s criticism of the BBC’s “imperial ambitions” in online news. Much more to be feared is the likely negative impact on the UK TV production sector.
The recently elected Conservative government took less than a week to negotiate a licence fee settlement with the BBC immediately p [...]
July 13, 2015 Reports
Last Monday’s (6 July) announcement by the Secretary of State marks the second major direct intervention by government without recourse to public consultation in the financing of the BBC throughout the corporation’s history. The previous occasion was 2010. As in 2010, the government has interfered by top-slicing the BBC’s licence fee revenues. We estimate the current annual top-slicing component that will appear in the annual accounts for 2014/15 (BBC year running from April to March) to be in the region of £525 million, including funding the BBC World Service for the first time (est. circa £245 million). By the time the BBC fully absorbs the over-75 subsidy (worth £608 million) in 2020/21, we are looking at a total revenue impact of circa £750 million; that is without taking inflation into account.
Last Monday’s (6 July) announcement by the Secretary of State marks the second major direct intervention by government without re [...]
July 6, 2015 Reports
Brands are investing more than £5.2 billion a year in content strategies, £1.2 billion of it with consumer media, and investment is growing at 25% per annum, massively outstripping growth in traditional advertising. Content marketing defies the broader direction of travel in the digital era – response-measured programmatic advertising – by expressing value in content and context, much of it at the top of the discovery funnel. In a rapidly converging marketing value chain some consumer publishers are adopting agency values and practices by responding to the changing demands and expectations of their advertisers.
Brands are investing more than £5.2 billion a year in content strategies, £1.2 billion of it with consumer media, and investment [...]
June 30, 2015 Reports
BT will soon for the first time charge the majority of viewers for their own channels with the launch of the BT Sport Pack. The Pack includes BT Sport Europe, home to UEFA’s European football tournaments from this August, the rights to which BT are paying £299 million a year. Viewing figures for the big European tournaments are not as high as one might expect given their prominence. Consumer demand for the new channel will also be highly dependent on the success of British teams, notably lacking in recent seasons. We therefore do not expect a dramatic impact on BT Sport (or BT broadband) subscribers, and the widening losses will put pressure on BT’s margin squeeze test regulation, although they are easily absorbable at BT Group level.
BT will soon for the first time charge the majority of viewers for their own channels with the launch of the BT Sport Pack. The Pac [...]
June 16, 2015 Reports
After a testing 2013, which saw an 11% fall in audience share of main Channel 4, 2014 has seen a £30 million increase in total revenues to £938 million and return to financial surplus for the first time since 2011. Channel 4 is much more challenged than any other PSB group as well as much of the non-PSB sector by the steep recent decline in viewing among younger age-groups, yet has stuck close to its public service remit of reaching out to the 16-34s and a wide selection of minorities while maintaining its investments in programme origination. A buoyant TV advertising climate, innovative approach to content investment and focus within the digital space on getting to grips with the changing viewing behaviours of the 16-34s point to strong revenue growth in 2015.
After a testing 2013, which saw an 11% fall in audience share of main Channel 4, 2014 has seen a £30 million increase in total rev [...]
June 5, 2015 Reports
The latest numbers for Q1 2015 show strong device and internet user growth, with more of the population online than ever before, including more than 90% of under-55s. Growth amongst older groups, however, has slowed to a crawl. Participation in online activities is up across the board, but digital media data shows spend on ebooks and digital music struggling, with the latter being heavily impacted by the rise of unlimited streaming models such as Spotify. The story of mobile's surge continues, with almost a half of e-commerce transactions and a third of search and display ad spend now going to mobile. Most of these mobile devices are Android, but iPhone seems to have gained long term share with its larger phones. Google services, however, have cross-platform reach.
The latest numbers for Q1 2015 show strong device and internet user growth, with more of the population online than ever before, in [...]
May 29, 2015 Reports
UKTV 2014 results show a 2% increase in total revenues and a 10% year-on-year increase in EBITDA to £74.1 million, though the costs associated with the launch of Drama in 2013 will have contributed to the higher EBITDA increase. The 2% total revenue increase is surprisingly low, since we would have expected a circa 8-9% increase in UKTV’s main advertising revenue stream in 2014 due to a 5.4% increase in total TV NAR on top of a 2.9% growth in UKTV adult SOCI during 2013, with the lagged revenue benefits accruing in 2014. Whilst the outlook for 2015 appears very promising, the focus is now on investment in content, above all on new commissions, as a driver of revenue and audience share now that the factors behind UKTV’s successful rise since the Freeview launch in 2002 have largely played out.
UKTV 2014 results show a 2% increase in total revenues and a 10% year-on-year increase in EBITDA to £74.1 million, though the cost [...]
May 7, 2015 Reports
The US is seeing steep decline in measured TV viewing by younger age-groups and rapid increase in digital media adspend, prompting fears about the future of TV ad revenues across the major broadcasters and cable networks. The UK has seen similar trends, prompting suggestions that it will see similar effects. However, comparison of US and UK TV ad revenue trends since 2000 shows big differences in the underlying growth rates after taking economic factors into account. These undermine the inference that the decline in viewing and rise in digital adspend will have similar effects on either side of the Atlantic. Examination of the US and UK TV ad markets further points to big differences across a raft of major variables relating to supply and airtime trading practice, such as can be expected to yield very different outcomes with respect to TV ad revenue growth.
The US is seeing steep decline in measured TV viewing by younger age-groups and rapid increase in digital media adspend, prompting [...]