Enders Analysis

On 9 April Facebook bought the 547-day-old Instagram for about $1 billion in cash and shares, acquiring 40 million users, strengthening its positioning in mobile and photo sharing and preventing anyone else from buying it first

That Instagram could grow to be so big, so quickly, and with just 13 staff and $7 million of funding shows how precarious Facebook’s market leadership might still be. This is not a one-off – many more companies will use cloud services, mobile and social to achieve similar growth in future

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

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

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

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

Analysis of comScore data suggests that ad volumes fell in April on Facebook’s PC-based website in the US and UK, which we estimate account for 60% of ad revenue Seasonal effects may account for some of the decline, but increasing pressure on ad performance and pricing, due to the tough economic climate, and slowing growth in PC usage of Facebook are other probable factors As a result we expect Facebook’s ad revenue growth slowdown to continue in Q2, with audience saturation in key internet markets and increasing mobile substitution limiting future growth potential from display advertisin

The New York Times has generated $243 million from its digital services in the four quarters since the launch of its new subscription strategy, representing about 15% of New York Times Media Group revenues, according to our estimates.

This scale is the clearest signal yet that digital-only newsrooms could be able to generate enough revenue to fund expensive breadth and depth in journalism – though there will be many fewer profitable scale players than in the print news era.

Recent news flow and feedback from media buyers indicates that growth in UK internet advertising is slowing due to the ongoing weakness in the economy

Paid search, buttressed by its link to e-commerce and measurable ROI, is suffering less than internet display, with growth in spend on social media slowing and price deflation especially for non-premium inventory

Online classifieds are also being hit by the economic woe, resulting in some sectors growing more slowly and non-advertising communications taking a larger share of spend; the secular shift to the internet continues

Apple sold 67m iPads through March 2012, and retains over 70% market share for premium tablets. Apple is aiming for the same long term dominance it enjoyed with the iPod, which maintained similar market share for a decade Microsoft and Google are taking radical steps to try to change this. Both are now making and selling their own hardware, while Google will sell a tablet at cost Microsoft and Google now have coherent tablet propositions, but they remain far behind on broader app ecosystems. Like Nokia, they are now back in the game, but they still have to play