Enders News

BBC 19 July 2017

Matti Littunen was quoted in an article on Google ‘news feed’ addition to their website and app. A personalised Facebook-style news feed will show users content they may be interested in before they search. It will display news stories, features, videos and music chosen on the basis of previous searches by the same user. Matti said "Google has a strong incentive to make search as useful as possible. Facebook's news feed is one of its main rivals. It is competing with other ways of accessing content. Search ads are more lucrative than in-feed ads such as Facebook's". He added that "Google's business is based on selling advertising, so this gives them more contact points with consumers”. However, the company did not divulge whether it would insert advertisements or sponsored posts into the feed, but Matti suggested that the focus of the service was to make Google more useful and drive users to its other services. Google has a long term project of anticipating user needs. It's a move to make sure people aren't going elsewhere for information".

Les Echos 19 July 2017

Tom Harrington was quoted in an article on Netflix decision to invest more on its own series and films. The firm believes that they are the most profitable futures. Even if this strategy widens its consumption of cash flows even more. Tom said "this is when the service, which targets 30% to 40% of internal production in 2019, compared to 25% today, will have muscled this segment to see the end Of the tunnel from a financial point of view”. Even if this strategy carries its risks "the consumer needs to appreciate".

BBC 19 July 2017

Gill Hind was quoted in an article on the S4C review, which has been commissioned by the UK government. The review will examine the remit, governance and funding of S4C, and examine how it can meet the future needs of Welsh-speaking audiences. Gill said that the review would need to focus on the challenges facing all public service broadcasters, "It needs to be able to make its content available on every single device, it needs to be able to do different types of programming. S4C should be appealing to every single age group, and thinking: 'What sort of content do they want and what's the best platform to deliver that?'". She added the fact that S4C's content was in Welsh may mean it is better placed to fight for attention in a crowded TV market.

Financial Times 17 July 2017

Claire Enders was quoted in an article on Dame Carolyn McCall, who will take charge of ITV next January. Although her appointment was widely welcomed by analysts and media executives, the boss of the no-frills airline will nevertheless need to steer the UK’s biggest commercial broadcaster through some potentially turbulent times. Under former chief executive Adam Crozier, ITV reduced its reliance on the cyclical advertising market by expanding its production division, ITV Studios, to become a major player in the international content business. But advertising still made up 47 per cent of ITV’s revenues of £3bn in 2016, and the problem for Dame Carolyn is that she is taking over just as the ad market heads into its most severe downturn since the financial crisis of 2009. Claire said “TV revenue is heading into the unknown, and there’s no end in sight to the decline of the core TV business”.

The Drum 17 July 2017

Gill Hind was quoted in an article on ITV’s four biggest challenges and how the new chief executive Carolyn McCall can solve them. McCall’s experience rising through the advertising sales ranks at Guardian Media Group to eventually become chief executive puts her in good stead to understand the commercial side of ITV’s business, which Gill believes is “hugely important” given the downturn in TV advertising since mid-2016. She added that “the market is likely to be down at least 5% this year so it’s clearly beneficial that the new chief executive has significant advertising experience and can support her commercial team. Her (McCall) skills nicely complement the current chairman, Peter Bazalgette, with his background in TV production. ITV has a strong operational team in place, so overall a very good appointment”.

The Hollywood Reporter 14 July 2017

Alice Enders was quoted in an article on the on Fox's Sky acquisition. Alice suggested that Fox would likely wait for what the CMA decides in its six-month review and discuss concessions then. "We are not sure 21st Century Fox has the appetite to lodge [an undertakings] offer [now], given the company’s incentive to obtain an expeditious process to clearance of the merger," she wrote in a recent report. "21st Century Fox may have an incentive to short-circuit the [undertakings] track and accept [a] CMA phase 2 [review]," which would likely lead to negotiations about concessions down the line, Alice said.

the Guardian 13 July 2017

Claire Enders was quoted in an article on Karen Bradley’s competition referral decision on the Sky/Fox deal. Bradley has given 21st Century Fox, which is controlled by Rupert Murdoch and his sons Lachlan and James, until Friday to offer further concessions to attempt to prevent the deal being referred to the Competition Markets Authority for further scrutiny. Fox will make a submission to Bradley that will criticise Ofcom’s review process and conclusions, but will not look to offer a remedy to strengthen the editorial independence of Sky News further to try to avert the deal being referred to the CMA. Claire said “at this stage of the process [Bradley] has only thin cover for any decision she makes. Her job is to get maximum cover from any potential judicial review in the future. To protect herself and Theresa May from blowback by depoliticising the deal as much as possible. For the Murdochs, if the alternative [to an in-depth investigation] is to be a political football they would probably view the CMA as a good option. They may even come out of it giving up less [than negotiating now]”.

Financial Times 12 July 2017

Douglas McCabe was quoted in an article on Bertelsmann announcement to expand its stake in Penguin Random House, cementing the German media conglomerate’s position as the dominant force in global publishing. The billion-dollar deal with Pearson gives Bertelsmann overall control of a company that is already a behemoth in publishing. The transaction should strengthen PRH at a time when publishers are facing pressure from Amazon, which dominates the ebook market. Douglas said “it’s important to have serious clout if you’re trying to negotiate with giants like Amazon, and that’s part of the recipe”, adding that, “Bertelsmann is adapting to the digital world, but they’re also taking the view that the business of physical books will remain robust, for the near future at least”.

Digiday 12 July 2017

Douglas McCabe was quoted in an article on Vox Media expansion. It has made its first international move with the launch of Eater London, the 24th city site the brand has set up, which is a lean operation of just two full-time editorial staffers, led by editor Adam Coghlan. It plans to publish between four and six text articles a day, but will also draw on freelancers, particularly well-known food critics Grace Dent and Marina O’Loughlin. Douglas said that there’s no doubt that food publishing is a busy market. He added that “the BBC particularly prominent in this category, and a wide variety of successful native businesses, led by Tastemade, which has a growing, impressive, well-targeted and curated U.K. presence”.

Arab News 11 July 2017

François Godard was quoted in an article on the new niche players in sports broadcast. In fact, Twitter expects further growth in sports broadcasting, following the announcement that it is to live-stream the 2017 Arab Championship, the Middle East’s inter-club soccer tournament, free to a global audience. The news follows a trickle of deals being made by social media giants Twitter and Facebook, with Facebook Live streaming American basketball’s NBA D-League, and Twitter earlier this year paying $10 million to live-stream 10 Thursday-night American football NFL games. Francois said “ they are just putting their finger in the water to check the temperature. It is a model of complementing the broadcaster, and for Twitter/Facebook it’s a way to reach audiences that (are) not reached by traditional broadcasters”. He added: “Sports needs some ad-supported broadcasting. It’s not healthy for sports broadcasts to be entirely pay-TV, and it’s not bad to have free-to-air exposure. Beyond a short-term return on investment, it’s also a strategy, as more people get to see club brands, which creates an emotional relationship to the club; then these people will (subscribe) to pay-TV later on”.
The action of traditional sports broadcasters in partnering with social media giants could be seen as a mistake, according to Godard, but he added iIt is a fact that pro-sports are mostly not profitable as an ad-supported product. Most of it is pay-TV, so it’s not that Facebook will suddenly find advertisers who were not advertising before. In the 15-20 year outlook, Godard thinks that regular TV will focus on drama shows, news and sports, and live sports will “remain important”.

Campaign 10 July 2017

Toby Syfret was quoted in an article on the Sky – Fox deal, which has been referred to the Competition & Markets Authority by the Culture secretary Karen Bradley. Bradley agreed with Ofcom’s assessment that Fox would be a "fit and proper" owner and that the takeover was no threat to broadcasting standards. However, she felt there was a risk that the deal could threaten media plurality, especially over the provision of news if other providers were squeezed in an already tough market. According to Enders Analysis, advertising is set to fall "over the next two years". However, Toby said "I don’t think this deal will affect advertisers. Advertising is not the strategic focus for Fox, which is a separate business from News Corp. This is all about Fox wanting to increase its scale in a global marketplace without boundaries".

The National 6 July 2017

Joseph Evans was quoted in an article on the new Snapchat feature, which allows users' locations to be accurately displayed on a map, has sparked fears it could expose children to stalkers. Snapchat has previously drawn criticism for appearing to facilitate underage sexting (sexually explicit messages). The Snap Maps feature, which uses augmented reality technology, has prompted warnings from schools and child welfare campaigners who fear the information could put youngsters in danger. Joseph said “Snap is hoping that brand ad budgets will move from TV to mobile, providing a windfall that will make it profitable. But it faces a series of daunting challenges: growth is slowing; it can’t differentiate when rivals like Instagram quickly match new features; and costs are high due to computing requirements and its need to innovate. He added that most importantly, TV budgets are likely to stay with quality content watched on TV sets, and Snap doesn’t yet have access to smart TVs or longform content. In the long term, its investments in Augmented Reality may give it unique inventory suitable for brand advertisers”.

The Drum 5 July 2017

Joseph Evans was quoted in an article on Thinkbox commissioned research by YouGov and House 51 which has found that TV sponsorships drive long-term brand health and awareness with viewers at a time when digital advertising often leans on short-term gain. The research found that sponsoring a TV show raises brand awareness for all brands. Interestingly, this is particularly poignant in lesser-known brands, which found both their brand and advertising awareness scores were substantially higher for viewers of the TV shows they sponsored. However, sponsorships have remained a resilient medium in the face of ever-increasing competition for ad spend from the digital giants, leading TV ad spend to fall nearly 2.1% in the final quarter of 2016, and is predicted to decrease by a further 0.5% in 2017. Joseph said “I think sponsorships have been resilient because they serve a valuable and hard-to-substitute purpose. Digital ads are mostly focused on activation: driving clicks, installs and sales in the short term”. He added “looking ahead, the line between TV-like content online and “traditional” TV content are blurring, as smart TVs, broadcaster VOD services and the delivery of TV content over IP become more prevalent. Broadcasters will be able to sell sponsorships of TV shows watched online and on-demand, while digital media companies will sell sponsorships of things that look very similar; distinguishing between the two will be less and less useful”.

Royal Television Magazine 3 July 2017

Claire Enders was quoted in an article on the effects of Brexit on media giants. Claire said “it’s a disaster”. She notes that the Brexit vote immediately knocked £18bn off the value of media stocks in the UK. ITV was badly hit because of its reliance on advertising. Shares can rise as well as fall, but Claire fears that the loss of three years’ worth of stock-market growth in the media sector will not quickly be made good. A remain vote, she believes, would have added 10% to the value of media stocks and the pound. In other words, the downside is even greater that it first appears. Claire predicts other big changes “A financially weak Government is going to have few places to look for increased income. We will have a greater risk of privatisation of Channel 4 and privatisation of BBC assets”.

The Daily Beast 30 June 2017

Claire Enders was quoted in an article on Fox's Sky acquisition, which has been delayed by British authorities for further study. Claire said “this is a time when there is an entirely new level of political risk. The avoidance of controversy is a priority”. She added that Karen Bradley has purposely left open two options to avoid arousing the elder Murdoch’s wrath. The first is giving him the chance to make the July 14 deadline with more concessions on the independence of Sky News to avoid the “media plurality” probe. The second option is to pass the issue to the Competition and Markets Authority with a wink and a nod, with the expectation that the agency will ultimately clear the deal. The CMA has a reputation of leniency, following a long-standing Tory policy of “soft touch” financial regulation.

Financial Times 30 June 2017

Alice Enders was quoted in an article on the Fox-Sky deal. Yesterday, the UK culture secretary Karen Bradley announced, in a statement to MPs following a three-month investigation by the media regulator Ofcom, that she was likely to refer the deal, where 21st Century Fox would acquire the 61 per cent of the company it does not own, to Britain’s competition enforcement. She added that Rupert Murdoch’s effort to take full control of European pay TV broadcaster Sky would probably give him too much power over the UK media and the political process, throwing up a significant hurdle to his effort to seal the £11.7bn takeover. Alice said that the formation of a separate legal entity, similar to the one created by BT to tackle regulator concerns over its ownership of the broadband network Openreach, might convince ministers. She added “this is a political decision. We have always said the takeover has inherent merit, but there’s powerful political opposition”.

Deadline 29 June 2017

Alice Enders was quoted in an article on today’s announcement from the UK Culture Secretary on Fox’s Sky acquisition. Karen Bradley said she was “minded” to refer the bid to the Competition and Markets Authority — largely over Ofcom’s concerns about “the risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process”. 21st Century Fox’s £11.7B ($14.6B) bid to acquire the 61% of Sky that it does not own now depends on the remedies, or so-called “undertakings in lieu” (UIL), it can offer. Alice said that the UILs are integral because “the Secretary of State must accept them in order to not refer” a Phase 2 probe to the competition authority. Adding that “we don’t expect for this transaction to be approved without some form of UIL/remedy relating to Sky News”. Besides, today’s findings are not a major setback to the transaction, analysts say. Alice calls them “completely expected!” and “just part of the process”.

Reuters 28 June 2017

Matti Littunen was quoted in an article on the EU antitrust regulatory actions against Google's business. The European Commission fined Google €2.42bn for favouring its own shopping-related product listing ads over competing price comparison sites. Matti said "just being put on notice can limit Google's strategic options into the future”. The EU ruling is a warning shot for two on-going EU probes into Google's Android mobile operating system and AdSense ad system. Matti continues by saying that while Google may be able to meet EU objections in the AdSense case by making relatively modest changes to its advertising systems to enable website customers to run ads from Google advertising rivals, the Android case has many complicated factors with no easy solution.

Royal Television Magazine 26 June 2017

Toby Syfret was quoted in an article on the new series “Genius” which encapsulates the new-look content strategy of National Geographic Partners, a joint venture between the National Geographic Society and 21st Century Fox. Toby said that times are tough for factual broadcast channels “they’re doing it to sex up their schedule, the amount of scripted drama made in the past few years has more than doubled, with Netflix and Amazon holding a terrific advantage in the marketplace”. However, Toby said “they need to consider the move carefully, it is a good thing to try but it is by no means certain that it will be a success”. In the UK, Genius debuted on Sky Atlantic and the National Geographic channel simultaneously. Toby observed that “it makes sense for a network majority owned by Fox to put it on Sky Atlantic in the UK to promote it and help drive people back to National Geographic’s channels”.

Financial Times 26 June 2017

Enders Analysis was quoted in an article on traditional media groups that are starting to feel the biggest impact from digital disruption. For the first time since the financial crash drove the advertising industry into recession in 2009, advertising’s big four — WPP, Publicis, Omnicom and Interpublic Group — are stalling. Enders said in a recent report “the advertising industry is undergoing profound change. Overall advertising spend continues to grow at a faster rate than consumer spending. But . . . vital signs in the market are alarming”. Adding that, the increasing focus on short-term slots — driven by the speed and efficiency of programmatic online advertising — poses a serious threat to the traditional role agencies have played in developing memorable campaigns for big brands such as Coke, Apple and McDonald’s. Moreover, Enders found that the balance between long-term brand building and short-term activation was broadly equal at 50 per cent, but would soon tip to 60/40 in favour of the short term, handing even more power over advertising to the tech platforms. Research shows that chief marketing officers hold their posts for shorter periods than other senior executives, adding to the short-termism.