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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Feeling the economic chill: Sky interim 2012 results
Sky’s 16% year-on-year increase in interim profits reflects strong operating efficiencies and reduced marketing costs due to the slowdown of TV gross additions in a tough economic climate, while continuing low churn underlines its product strengths
Fibre broadband deployment and the January launch of streaming-only services by Lovefilm and Netflix signal increasingly competitive conditions, but Sky is well placed and the challenges should take several years to materialise |
Media, TV, Fixed line, Telecoms |
February 2012 Access this report
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TV NAR forecasts: 2012-2016
With the economy drifting sideways, we have set our centre case forecasts at 0-1% average annual growth in TV NAR and assigned a low probability to a repeat of the hyper-cyclical downturn of 2008/9
Comparative international data show a pervasive long term weakness in display advertising trends across the developed world, while emerging markets in Asia, Latin America and Central/Eastern Europe take an increasing share of global budgets |
Media, TV |
January 2012 Access this report
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Al Jazeera needs Canal+
Qatar’s Al Jazeera will launch its French pay-TV channel by this summer, showing weekly Ligue 1 and Champions League games, but it has yet to disclose a business plan and distribution deals
The new channel is a complement to Canal+, which broadcasts the most attractive games. Al Jazeera would need to obtain distribution on the Canal+ platform
Even if such a deal were to be struck, Al Jazeera would struggle to break even |
Media, TV |
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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Digital platform growth post analogue
As Phase 1 digital shift from broadcast analogue to digital nears completion, individual platform growth trends have almost flattened out
The most likely area of change in platform trends over the next ten years concerns basic only subscription pay-TV, where we anticipate an overall increase in the total pay-TV base and change in platform balance arising from the introduction of low price basic packages |
Media, TV |
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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Virgin Media Q3 2011 results: mixed not nixed
Q3 results were contradictory, with accelerating demand for enhanced services and resilient revenue, but high churn and weak growth in fundamental cash flow
Cost increases struck us as justifiable in the longer term and were in some cases temporary. We share management’s confidence that there is better news to come, particularly at Virgin Media Business
Nonetheless, we remain of the view that future cash flow growth is likely to be significantly lower than that seen over the past two years, particularly given the deteriorating economic outlook |
Media, Mobile, TV, Fixed line, Telecoms |
October 2011 Access this report
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Sky still climbing, but going getting tougher
Sky’s Q1 2012 produced strong 16% year-on-year headline growth in adjusted operating profits, although weakening TV product net additions underlined the challenging economic conditions
Churn remains comparatively low in spite of the economic conditions, while Sky’s current round of major investment in entertainment content, now showing the first signs of bearing fruit, could prove vital to holding churn down and stimulating gross additions |
Media, TV, Fixed line, Telecoms |
October 2011 Access this report
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ECJ Murphy judgment - Who will win?
The European Court of Justice (ECJ) judgment in the Portsmouth pub landlady case looks to have opened the door to legitimising the private or domestic use of decoders to watch premium sports and other pay-TV content outside the territories for which they were licensed
The outcome could prove to be a significant commercial opportunity for Sky to expand its overseas distribution among residential customers, but an extra test for the Football Association Premier League (PL) as it designs the next round of contracts with a view to at least maintaining current revenues |
Media, TV |
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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Local TV: watch this space
Jeremy Hunt is pressing ahead with plans to inject television into the local media ecosystem, the latest in a series of attempts by successive governments to promote local news provision
This presents a challenge to local media, threatening to fragment consumption and intensify the competitive environment in perennially difficult times, but in certain areas these pressures will be attenuated
A ‘community’ model may allow local TV services to survive in areas where advertising revenues do not provide a sufficient income stream |
Media, TV, Press |
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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Canal+ bursts into free TV
Advancing its free-to-air TV project, France’s Canal+ is to buy Bolloré TV’s national channels for €465 million to gain (scarce) licences for FTA terrestrial broadcast
Canal+ plans to leverage its library of original programming to attract upscale audiences, neglected by commercial rivals
However, the Vivendi investment case of a 9% return on capital is built on incompatible assumptions about profit margins and market share – to grow the latter in a mature market, a channel needs to sacrifice the former |
Media, TV |
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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Sky Movies: the Competition Commission investigates
The provisional findings of the Competition Commission’s (CC) investigation into pay-TV echoed the conclusions of the Ofcom pay-TV investigation in April 2010, concluding that Sky’s control of pay-TV movie rights was having an adverse effect on competition
The big difference between the CC and Ofcom lies in the choice of remedy, with the CC preferring to explore a range of other options rather than proceed with Wholesale Must Offer, a solution that the CC sees as entrenching Sky’s market power rather than undermining it |
Media, TV |
August 2011 Access this report
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Starting the transformation: ITV interim 2011 results
ITV reported strong year-on-year growth in profits in H1 2011, enabling a substantial reduction of net debt and putting the company in a stronger position to invest in growth as it pursues its five year transformation plan
Important to longer term success, ITV Family share of viewing has held up, and ITV looks well placed to expand its market share of TV NAR (Net Advertising Revenue) over the next two years, albeit in an uncertain and challenging economic environment |
Media, TV |
August 2011 Access this report
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Sky FY 2011 results: excellent year of delivery
Fiscal 2011 was a vintage year for Sky, which reported a 23% growth in operating profit and 51% increase in free cash flow as it started to reap the full benefits of its investment in multi-product growth
Q4 2011 showed signs that tougher economic conditions are starting to bite, although the sharp fall in TV product additions was balanced by a fourth consecutive bumper quarter in home communications, in which Sky outperformed the rest of the market |
Media, TV, Fixed line, Telecoms |
August 2011 Access this report
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UK video-on-demand forecasts to 2015
This presentation details our assessment of the UK prospects for video-on-demand advertising through to 2015, covering through-the-middle and over-the-top services
While video-on-demand consumption is set to grow strongly, particularly to the TV, linear broadcast services, supported by PVR timeshift, will continue to account for over 90% of viewing to the TV and PC/ tablet over the next five years. As a result, we forecast that VOD advertising will equate to 7% of TV NAR by 2015, with current high prices for in-stream video ads falling as it becomes more integrated with TV airtime sales |
Media, TV, Internet |
August 2011 Access this report
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Virgin Media Q2 2011 results: resilient but with limits
VMed’s Q2 results were respectable, but quirky, with resilient underlying revenue and strong cash flow, but exceptionally weak cable volumes
Virgin Mobile is performing better than ever, but steam continues to seep from the cable cash flow boiler
A TiVo push and further progress at Virgin Media Business are still to come, but we expect a trend of gradual decline in fundamental cash flow growth |
Media, Mobile, TV, Fixed line, Internet, Telecoms |
July 2011 Access this report
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