Facebook - the IPO effect
Facebook’s IPO prospectus confirms that the social network is an internet colossus, with 845 million users worldwide and $3.7 billion in revenue in 2011
Growth potential in display advertising, which accounts for the majority of revenue, seems limited with increasing mobile substitution in major ad markets and future user expansion largely in lower yielding countries
There is significant potential to increase income from payments and other businesses beyond social games, but the company’s strategy is unknown at this point |
Media, Internet |
February 2012 Access this report
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Virgin Media Q4 2011 results and strategy update: speed bumps
VMed’s Q4 results were again mixed, with underlying cash flow growth hit by high capital expenditure primarily relating to accelerating TiVo box installations
But this strong take up of next generation TV, and real progress at the Mobile and Business divisions, give us confidence that the company’s strategy is working
Management guidance of further cash flow growth from the second half of 2012 is credible, though we continue to expect underlying growth to be limited |
Media, Mobile, TV, Fixed line, Internet, Telecoms |
February 2012 Access this report
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BT Q3 2011/12 results: reasonable progress, on balance
BT’s results for the December quarter saw continuing trends of gradual improvement at BT Retail and efficient deployment of next generation access at Openreach, plus strong control of unallocated property costs, enabling management to issue slightly improved group-level guidance for the current financial year to March
Cash flow growth at group level continued to be compromised by the cost of overseas expansion at Global Services and a continuing shift to LLU and IP-based services at BT Wholesale |
Media, Fixed line, Internet, Telecoms |
February 2012 Access this report
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Google UK results: mobile and display ascendant
Google’s UK revenue grew 23% to £676 million in Q4 2011, taking 2011 revenue to £2,525 million, up 20% year-on-year, 2 ppts below our November estimate
Globally, gross revenue rose 25% year-on-year, with mobile and display performing strongly, but rising costs pulled net revenue growth down to 8%
Our growth forecasts for Google’s UK revenue remain unchanged; we expect UK internet ad spend to rise from £4.7 billion last year to £5.8 billion by 2013, representing 35% of total advertising, as print continues to fall |
Media, Internet |
January 2012 Access this report
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Netflix faces uphill battle in the UK
The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT
Unlike in the US, Netflix’s UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free
The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US |
Media, TV, Internet, Technology |
January 2012 Access this report
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Virgin Media's cable broadband speed upgrade: put that in your pipe
Virgin Media’s plan to double the line speed of most of its broadband customers is the latest in a series of moves to retain its position as the leading high speed internet service provider in the face of BT’s deployment of next generation access (NGA)
The move presages further price increases and an upgrade to offers for new cable customers, but is in the first instance about retaining the large existing base of cable customers currently on 10 Mbit/s |
Media, Fixed line, Internet, Telecoms |
January 2012 Access this report
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Google versus Facebook: display advertising
Facebook is winning the battle for eyeballs and advertising in the internet display arena, with revenues projected to reach $5.3 billion in 2012
By comparison, we expect Google to achieve revenue of $2.5 billion, after traffic acquisition costs, though it remains the king of internet advertising, due to its dominance of search
Increasing advertiser demand for scale and performance will make many publishers increasingly reliant on one or both of the internet giants for audience and revenue growth |
Media, Internet |
December 2011 Access this report
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The Netflix whirlwind
The spectacular growth of Netflix in the US has underlined the potential of online streaming subscription services offering films and other premium entertainment
As Netflix plans to enter the UK and Ireland in Q1 2012, its core US operations are in a critical phase of extremely rapid adoption, rising competition and escalating content costs, the successful outcome of which appears crucial to the international expansion of online streaming |
Media, TV, Internet |
December 2011 Access this report
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AOL, Microsoft and Yahoo! seek solace together
AOL, Microsoft and Yahoo! are partnering to cross sell non-guaranteed display inventory in the US, highlighting their need for scale in the face of increasing competition from Google and Facebook
Aggregating unreserved ads via their respective networks may boost share of ad budgets, but the focus on less valuable inventory means any impact is likely to be small
Short of extending the partnership to include all inventory and greater investment in technology there seems little the three companies can do to stop further erosion of display share, though revenues should continue to rise |
Media, Internet |
November 2011 Access this report
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Zoopla’s merger with the Digital Property Group: implications for digital property media
Zoopla and The Digital Property Group, DMGT’s property portfolio which includes Findaproperty, Primelocation and Globrix, announced a merger on 14 October 2011. Under the terms of the proposed merger, DMGT would receive a 55% interest in the merged entity
A merged Zoopla and DPG will compete more effectively with market leader Rightmove, in a property market scaled down by one-third in terms of the number of transactions |
Media, Press, Internet |
November 2011 Access this report
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Spotify's freemium model gains traction
Spotify has just passed the 2 million subscriber mark in Europe and the US, and could reach 2.5 million by the end of 2011
Smartphone adoption and partnerships with MNOs and ISPs have proven a key driver of subscription in Europe for Spotify, which lacks a telecoms partner in the US. We think subscription is profitable
Spotify’s lower usage caps on the freemium tier will help compress total losses in 2011 in relation to the £25 million reported in 2010, despite the US launch |
Media, Internet, Music and Radio |
November 2011 Access this report
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Leaner future for content farms
Content farms, which once threatened to undermine traditional publishers by flooding the internet with low value content, face significant challenges
Google’s changes to its search rankings in February 2011 reduced the prominence of content farms in favour of higher value content suppliers
In recent quarters, revenue growth at Demand Media’s content farm business has halted and revenues of About Group have declined |
Media, Internet |
November 2011 Access this report
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UK social gaming outlook
This presentation analyses the social games market in the UK. UK consumer spending on games software, like other recession-battered markets, has been flat for the last two years. At the same time, however, there has been rapid growth in PC-based social gaming, fuelled by the free to play nature of most games and viral marketing capabilities of social networks particularly Facebook. |
Media, Internet |
October 2011 Access this report
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Google UK Q3 results beat expectations
Google’s UK gross revenue jumped an impressive 25% YoY in Q3 to £651 million, with its paid search business continuing to outperform the advertising market
We have raised our YoY growth estimate for Google’s UK revenue to 22% for 2011, pushing our growth forecast for UK internet ad spend this year to 15% (up 3ppts). Our forecast for 2o12 is unchanged at 13% YoY growth
UK revenue growth fell shy of Google’s global revenue growth of 33% YoY, with Asia, India and Brazil particularly strong, and mobile increasingly significant |
Media, Internet |
October 2011 Access this report
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Competitive pressures on the press: presentation to the Leveson Inquiry
In the context of his Inquiry, Lord Leveson invited Claire Enders, as “one of the UK’s foremost media business analysts”, to kick off the seminar series on the 6 October with a synoptic presentation on “Competitive pressures on the press”. The Inquiry is interested in understanding the market economics of the mainstream media, including the impact of technology
This presentation brings together our existing work on the newspaper and consumer magazines industry, with an emphasis on the former, highlighting the challenges to the print media of the internet |
Media, Press, Internet |
October 2011 Access this report
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UK internet advertising strong in H1 2011
Internet advertising rose strongly in H1 2011, according to the latest IABUK/PwC figures, increasing 13.5% YoY compared to 1% growth in spend on other media
Search grew 12.6% YoY while display was up 18.6%, in line with our forecasts, but classifieds slowed, up just 3% YoY, with recruitment and other sectors stagnating
Our internet advertising forecasts for 2011 and 2012 remain unchanged at 12% and 13% respectively |
Media, Internet |
October 2011 Access this report
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Video streaming and news online
The UK is now entering a period of intense discussion of the regulation and ownership of news outlets. In this context it is revealing to look at a case study of news viewing online
Livestation is an online service which aggregates several dozen TV news channels and makes them available online. Two of the most prominent are Al Jazeera and Al Arabiya. These channels experienced explosive growth during the ‘Arab Spring’ events, and this was reflected in the statistics for access to their online streams, which we analyse here |
Media, TV, Internet |
September 2011 Access this report
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Google TV in the UK: friends with few benefits
Nearly a year after rolling out Google TV in the US, Google has confirmed plans to launch its ‘smart TV’ operating platform in Europe and the UK by early 2012
To date, Google TV in the US has been a disappointment, with little broadcaster support and, until recently, expensive devices, resulting in low adoption
The content issue is likely to dog Google TV, both here and in other European markets; access to key broadcaster TV and video programming will be a major challenge |
Media, TV, Internet, Technology |
September 2011 Access this report
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UK internet travel market
This presentation details our assessment of the UK travel market to 2015, covering the package holiday, flight, accommodation and cruise sectors. UK consumer spending on holidays has been hit hard by the recession, but should bounce back as household finances recover, though the macro risk is still on the downside. We project that the internet will account for 60% of bookings by 2015, up from 45% in 2010, with growth fuelled by increased bargain hunting, as well as improving choice and functionality. |
Media, Internet |
September 2011 Access this report
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UK advertising growth slows to a crawl
Whilst UK GDP growth crawls along at a snail’s pace in 2011, (real) private consumption, its principal component, has been in sequential decline since Q4 2010, dragging consumer facing industries down
UK media are not equally affected. The internet continues to grow through search as well as display, but we expect TV NAR to be flat in 2011
Press advertising is worst affected by the downturn due to its exposure to retail advertising on top of the structural shift of classifieds to the internet |
Media, TV, Press, Internet, Music and Radio |
September 2011 Access this report
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