Reversal of CC decision to impose remedies on Sky Movies
The Competition Commission has decided to reverse its provisional decision of August 2011 and has cleared Sky Movies of having ‘adverse effects on competition’ This change of heart – which we think is the first time in the Commission’s history of market investigations – was forecast by Enders Analysis in March BSkyB is the primary beneficiary of this announcement, which will almost certainly delay the growth of SVOD in the UK |
Media, TV |
May 2012 Access this report
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Still headroom for growth - Sky Q3 2012 results
The weak spot of 15,000 net TV additions in a positive quarter for operating profit growth reflects the continuing downward pressures of a struggling economy, with little indication of headwinds to do with connected TV Very strong growth in home communications in a weak quarter for TV net additions underline Sky’s competitive strengths in a market now close to maturity, as well as bringing revenue growth and churn reduction benefits Overshadowing Sky’s Q3 results, Ofcom’s investigation into the “fit and proper” status of News Corp’s shareholding in BSkyB is unlikely to affect the company |
Media, TV, Fixed line, Telecoms |
May 2012 Access this report
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The Netflix tightrope
Netflix resumed strong growth in domestic US streaming subscriptions in Q1 2012, but weak Q2 guidance and high churn reinforce doubts about long term profit growth in an increasingly competitive market. Netflix has embarked on a global expansion strategy in the belief that achievement of global scale will improve its bargaining power, but the rationale is questionable and the prospects of incremental profits at best long term. |
Media, TV, Internet |
May 2012 Access this report
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VMed Q1 12 results: increased spending on customer equipment and advertising weighs
VMed’s underlying financial performance in Q1 was hit by continuing high capex on customer equipment for TiVo and high speed broadband, and on marketing opex to retain customers Strong take-up of next generation TV, lower cable churn and continuing progress at the Mobile and Business divisions continue to give us confidence that the company’s strategy is working Despite early indications that most cable customers will accept the latest round of price increases, the outlook for underlying cash flow growth in 2012 appears limited |
Media, Mobile, TV, Fixed line, Telecoms |
April 2012 Access this report
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Predictable Sky Deutschland
Sky Deutschland has renewed its broadcast rights contract with the Bundesliga until 2017, removing the most important source of uncertainty for investors and consumers, albeit at the cost of a 77% jump in the fee from 2013/14
Combined with Sky’s new exclusive channels, high definition offer and on-demand services, the contract will sustain subscriber growth, but ARPU will only rise slowly
Although we forecast Sky to meet its EBITDA breakeven target in 2013, cash flow should stay negative until 2015 due to rising spend on receivers |
Media, TV, Non-UK Media |
April 2012 Access this report
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London Olympics win-win for free and pay TV
The London Olympics promise to be a major success for both the free-to-air broadcast licensees and the leading pay-TV platforms as a result of co-operative deals being forged between them
Recent distribution agreements with Sky provide the BBC and Eurosport with a massively bigger window to showcase their credentials in in-depth sports coverage and new technologies, especially 3D |
Media, TV |
April 2012 Access this report
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Sky News email revelations
On 5 April, it emerged that Sky News had authorised a journalist to access emails on two occasions. Although Sky News may have committed a criminal offence, the likelihood of a successful prosecution is extremely slight, in our opinion |
Media, TV |
April 2012 Access this report
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TV platform growth forecasts 2012-2020: the impact of digital convergence
In this first of two reports on TV platform growth, we consider the impact of digital convergence on the traditional broadcast channel distribution platforms. As the analogue era draws to a close, the new era of digital convergence across multiple screens and devices is gathering momentum. We assess the various forces of change, including superfast broadband rollout, the continuing growth of pay-TV adoption and the strategic resilience of Sky and Virgin Media. We provide our forecasts for TV platform penetration to 2020. |
Media, TV |
April 2012 Access this report
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A U-turn at the Competition Commission?
The CC seems to be preparing to reverse its provisional conclusion that Sky’s hold over premium movies is damaging competition |
Media, TV |
March 2012 Access this report
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Sky Italia vs Mediaset Premium
Sky Italia’s strategy of selling low-priced satellite packages and HD set-top boxes has sharply reduced profitability, but helped subscriber growth
Escalating per user costs of football rights in a PAYG model has dissolved the profitability of Mediaset Premium, with no real upside visible
Sky Italia and Mediaset Premium both face the strong headwinds of the long consumer recession in Italy |
Media, TV |
March 2012 Access this report
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Transformation buds: ITV FY 2011 results
Year-on-year increases of 4% in total revenues, 13% in EBITA before exceptional items and positive net cash for the first time in seven years sees ITV much more strongly placed to handle future challenges post digital switchover
ITV continued to outperform the market by raising its share of TV NAR, whilst the early signs of revival in its content production business were particularly encouraging
Online still poses ITV the toughest challenges with regard to providing it with significant new revenue streams despite strong improvements in the audience metrics – an issue familiar to many |
Media, TV |
March 2012 Access this report
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TiVo in demand
TiVo is central to Virgin Media’s strategy for building value in its cable platform, offering next generation applications and software search, recommendations and navigation instruments
The challenge of deploying TiVo across the entire VMed base within five years for a monthly charge of £5 (as of April 2012) is considerable, but promises several other financial benefits besides subscription income |
Media, TV |
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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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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