Commenting on the ruling of the Copyright Royalty Board in Washington on the adjudication of royalty rates for the music industry (Panel of judges imposes truce between music producers and digital sellers), the FT observed that "the ruling gave none of the parties what they had asked for, but allowed each to claim that it would boost the nascent but growing digital music market".

Asked for his view, Ian Maude said: "Even number two looks like a big ask unless Ballmer can somehow persuade Yahoo! shareholders to sell to Microsoft."

Commenting on the success of the BBC iPlayer (iPlayer is a runaway success … but could it backfire on the BBC?), the Sunday Herald explained that the introduction of the iPlayer raises numerous questions about the licence fee. "With more and more people opting out of viewing schedules in favour of the iPlayer, the old system for deciding who pays a TV licence is in danger of becoming outdated", the Sunday Herald claimed.

Toby Syfret was asked for his view. He was not in favour of including internet access in the licence, regarding it as impractical and outmoded, observing: "That would involve the collection of all sorts of data". Although he did not offer an alternative, he argued that moving away from the licence fee, rather than widening it, would reduce what he sees as an unfair financial advantage for the BBC.

He said the loss of revenue to commercial stations in the current market is creating a widening gap between the BBC and its competitors: "I think that the licence fee is too big at the moment."

He added: "We've got a very difficult advertising market and you now have the BBC coming in as a competitor on the internet. What you have is a funding gap and that is something that is going to have to be looked at when the charter comes up for renewal in 2012."

Signalling a slowdown in the relentless subscriber growth for pay-TV (Sky "likely to miss" 10m target as economy bites into pay-TV boom), the Daily Telegraph forecast that Sky will miss its key target for new subscribers when it reports its full year results at the end of July.

Asked for his view, Toby Syfret explained that cheaper pay-TV options like BT Vision could see some growth, but that satellite and cable, which now has 3.3m subscribers, were nearing their peak. He said: "The pay TV market will taper off at around 50% penetration. All the major growth has happened. The only thing driving pay-TV now will be pay-light options and population growth."

Commenting on the ambitious plans of the French Government to stamp out internet piracy (France sets date for anti-piracy law; Offenders to lose Internet access), Variety quoted French Culture and Communications Minister Christine Albanel, who claimed that the new proposals will cut unauthorised downloading by 70-80%.

Alice Enders was asked for her view. She said: ``The problem has always been that legal action against a person on a site has been considered like Godzilla against Bambi, very disproportionate. The idea of having a soft-enforcement mechanism is more appealing. The measure will not halt physical piracy and copying works after they've been downloaded legally. Copying CDs for friends, for example. That's become accepted social practice."

Commenting on research published recently by Enders Analysis (Online adverts put TV in the shade), The Times reiterated our forecast that spending on online advertising will increase by 26% this year to £3.56 billion - compared with a 2.5% fall in revenue to £3.39 billion for television - and concluded that the internet will surpass television this year to become Britain’s largest advertising medium.

Ian Maude was asked for his view. He said: “The TV market is flat at best if not weakening, whereas online advertising has continued to grow much more strongly than expected,”

Following publication of a report by Enders Analysis on the UK regional press [Regionals at the cliff edge] the Daily Telegraph highlighted the sharp decline in advertising revenue (Local papers hit by surge in online ads), and emphasised the report's conclusion that regional papers have reached a point of "no return".

Interviewed for the article, Douglas McCabe disputed the industry's view that the decline in advertising represented a cyclical trend: "This downturn is different because it was preceded by a massive shift of classified advertising online," he said, and added: "Online is just cheaper and a much more effective classified ad medium. Publishers will be under pressure to rethink their advertising rates."

Overall, he suggested that the regional newspaper sector is facing difficult times: “It’s a one-way street, that money is simply leaving the sector as a whole and will never return," he said.

Commenting on news of 21CN, BT's long-awaited flagship modernisation project (Plaudits for Verwaayen’s success), The Financial Times reminded its readers that the £10bn plan is meant to replace 17 increasingly out of date fixed line networks with a single platform carrying phone and broadband services with download speeds of up to 24 megabits per second – three times faster than currently available.  However, Ian Watt explained that BT’s update reveals its plans are running a year behind schedule.

Asked how realistic he found BT's claim that "it would roll out next generation broadband to 10m homes and businesses by April 2009", Ian said that BT had indicated in 2006 that it would achieve this 10m milestone, equivalent to half of the population, by March 2008.

Commenting on the strategic alliance formed between Best Buy and Carphone Warehouse (Carphone to focus on broadband after Best Buy deal), Reuters speculated on the opportunity for Carphone Warehouse following the $2.1bn sales of its retail unit. "Its plans could ultimately result in a demerger and the possible sale of Carphone's telecom arm to the likes of Telefonica or Vodafone... it is now seen as the front runner to acquire the UK broadband unit of Italian group Tiscali  which is up for sale", claimed Reuters.

Ian Watt was asked for his view. He said: "Tiscali is the last major acquisition opportunity... Tiscali itself acquired Pipex which had previously consolidated small (Internet Service Providers). The top four providers are now accounting for something around 80 percent of subscribers and the only guys left are niche players."

In an article which revealed the thinking behind the launch of Freesat (Freesat satellite launch signals HD intent of BBC and ITV), the Daily Telegraph explained the significance of the new free-to-air satellite service, with the advent of HD broadcasting, comparing its introduction to the transition from black and white to colour TV.

Asked for his view, Toby Syfret said: "Freesat is very important to the armoury of the public service broadcasters because it could allow them greater control of their destiny as regards HD, without having to deal through Sky. HD is attractive because people are getting bigger and bigger TV sets, and the bigger they get, the more noticeable the quality difference between HD and non-HD."

He added: "On a 44-inch screen, the quality difference is going to be very clear and the high quality is what people will come to expect..."That relatively high percentage for Sky shows switchover is a big opportunity for a satellite platform and Sky is the only one offering it at present. Freesat is important for the independent future of public service broadcasting if it wants to have a presence that is not wholly dependent on Sky."

Highlighting the vacuum at Five, the UK’s smallest terrestrial broadcaster, as it looks forward to a year without a CEO (Five to endure a long wait for Dawn), the Financial Times revealed the sting in the tail of Dawn Airey's appointment.

When asked for his view, Toby Syfret noted: “It is not a good time to be without a chief executive. There are a lot of important issues coming up for Five, such as whether they can become involved in Kangaroo and the beauty parade for high-definition TV spectrum".

Commenting on the terse official statement from ITV which made reference to the fact Ms Airey would be “taking an extended period of gardening leave”, Toby Syfret observed: “Judging from the tone of the press release, they did not leave on the best of terms and I can’t see any particular reason why Michael Grade would want to release her early.”

Following the news of the departure of Ben Verwaayen, the FT marked the succession of Ian Livingston as new chief executive of BT (Livingston picks up the BT mantle). Ian Watt was asked for his view on the appointment. He said that Mr Livingston may find it particularly challenging to get to grips with the 21CN project, which is central to future cost reductions. He added that BT had encountered problems with technology for the project, and highlighted how it involves complex software as well as hardware.

Announcing BSkyB's decision to challenge the Competition Commission's recommendation that it should sell most of its stake in ITV (BSkyB to appeal over ITV ruling), the FT explained that BSkyB is targeting its appeal at the Competition Commission rather than at the government, and will take its case to the Competition Appeals Tribunal before the end of the week, thus prolonging the uncertainty over ITV’s shares. A person close to the company was quoted saying: “We think the Competition Commission got it wrong at every key step leading to this decision.”

Chris Goodall was interviewed for the article. He said: “On this occasion we think Sky has a small, but not negligible, chance of success.”

Commenting on the restructuring plan conceived by GCap Media (GCap plans fail to knock out Global), the FT emphasised the radical and realistic set of measures announced by Fru Hazlitt, GCap's chief executive. Ms Hazlitt stated that "DAB is not an economically viable platform for the company", and announced that GCap will sell for £1 its 63 per cent stake in Digital One, the transmission multiplex, to its partner Arqiva and instead concentrate on FM and broadband.

The FT reported that her plans were roundly criticised by Charles Allen, chairman of Global Radio who said: "There needed to be pretty significant growth plans, so we were surprised not to see a strategy for growth outlined in the presentation. It seemed not to answer the question of 'If DAB is not your digital strategy, what is?'."

Grant Goddard was asked for his view. He said: "I think Global may still need to raise their offer, but not by as much as we might have been thinking last week."

In an article which featured the unintended consequences of the public broadcasting policy of President Sarkozy (France Televisions to go ad-free, Sarkozy's plan faces funding doubts), Variety explained that the presidential desire to scrap advertising on public channels would require a compensating increase in the licence fee paid by commercial broadcasters and new media platforms. 

Announcing that GCap Media had secured a “put up or shut up” notice from the Takeover Panel, ordering Global Radio to announce a new offer by 5th March or walk away for at least six months (Global given deadline on GCap offer), the Financial Times speculated on the options available to Fru Hazlitt, GCap's new chief executive, commenting that she "may abandon the policy of limiting the number of advertisements aired on London’s Capital FM, sell some stations or cut its exposure to the disappointing digital audio broadcasting format".

Grant Goddard was asked for his view. He said: “I think Fru faces an immensely challenging task to come up with a strategy in a relatively short period of time which will need to demonstrate the company can be turned around after years of neglect.” He added, however, that Global was unlikely to be put off by Thursday’s audience figures. “Global needs consolidation desperately”, he said.

Commenting on the trans-Atlantic market for original TV programmes (UK remake should be arresting viewing), the FT found that "Reality, or non-scripted formats, from Britain made by US outposts of UK production companies have ... done particularly well over the past few years in the US, where the tradition of 'variety television' died long ago".

The FT revealed that, in the US, "imported television programmes have tended to be remade, keeping the basic scenarios and situations but with American characters and a new script as US audiences have struggled with the British sense of humour and feel more comfortable with US storylines". Claire Enders was asked for her view. She said: “If you want a ratings hit, you need to make a programme relevant to the audience.”

In further comment on the fact that few television groups apart from the BBC have the financial power to back such projects in the UK, she added: “Original programming is very expensive.”

Commenting on the plans announced by Kevin Russell, CEO of 3, the UK's smallest mobile operator, to combine its mast network with T-mobile (3's number one is taking a calculated risk), the Daily Telegraph revealed that the network-sharing arrangement would be announced within weeks and could cut the cost of running 3's network by more than 20 per cent.

Asked by the Daily Telegraph for his view, James Barford said that he had been impressed by Russell's strategy so far. "He strikes me as being a very feet-on-the-ground, get-the-basics-right manager, which is exactly what 3 needs", he said.  But Barford is sceptical that the business can become truly profitable. "The company may break even at Ebitda by the end of the year. But to cover the costs of the D and the A – depreciation of the value of the network and the annualised cost of the licence – would require an Ebitda margin of 30 per cent" he added.

Pre-empting the UK launch of the Apple iPhone by O2, The Times attempted to get behind the hype (Will the Apple iPhone be Googled?), and claimed that "the phone's principal drawbacks are the touch-screen keyboard and the price. At £269 each, plus the commitment of a minimum £35-a-month contract lasting 18 months, the iPhone costs head and shoulders more than everything else on sale at the moment".

James Barford was asked for his opinion: “We see this pricing as limiting the iPhone’s appeal to Apple aficionados and wealthy fashion victims who are looking to upgrade their iPod”, he said.

Announcing the appointment of Tom Alexander, a founder and former chief executive of Virgin Mobile, as chief executive of Orange UK's mobile and broadband operations (Orange shakes up UK business), the FT commented: "One key risk for Mr Alexander would be if he were to spend too little time focused on Orange UK's mobile business, which is the main source of revenue and profit, and too much on its fixed-line broadband operations". James Barford was asked for his view. He said: "Reinvigorating Orange's marketing will be a top priority, and Tom has proved his credentials in this area." The article also quoted research published by Enders Analysis which showed that, over the past year, Orange UK's mobile revenue growth has fallen behind rivals Vodafone, O2 and T-Mobile.

Posing the question, Can a ‘practical Antipodean’ put Virgin Media on a secure footing? the Times noted that Neil Berkett, interim CEO of Virgin Media, is reluctant to compete head on with BSkyB, and ultimately will concede defeat in this arena while aiming to attract a “middle-tier” of customers. "Instead of distinguishing itself as the 'quadruple play' operator offering broadband, television, fixed-line and mobile phone under one roof, broadband is to become Virgin Media’s new focal product", the article inferred. The Times interviewed Claire Enders. She believes Mr Berkett is good news. She said: “If Neil Berkett had said he wanted to step up to battle it out with Sky on football rights I would feel sick". She added: “Broadband is the only area of the company where there is a lot of positive feedback from customers".

Following Radiohead's announcement that it would sell its new album In Rainbows directly from its official website, for as much or as little as fans want to pay (Nine Inch Nails follow Radiohead and dump label), the Daily Telegraph asked Alice Enders for her view. She said: "It is certainly a feature of the internet age, when you think that physical music retailing is in decline and music sold over the internet is rising sharply. On the other hand, if you are an unknown you require marketing." Alice added: "The economic benefits are going to be mixed. It costs a lot of money to run transaction websites." She explained that for the average download costing 99 pence, between 10 and 20 pence is recovered by credit card companies.

The Daily Telegraph suggested that bands are abandoning record companies because of the prevalence of the 360 degree contract which obliges artists to remit all their output - including live performances and merchandising. Previously the revenue from these activities were an artist's primary means of income as royalties earned from CD sales are so meagre.

Alice Enders explained that many record companies are dropping their artists, rather than the other way around: "There are a lot of musicians that don't have a choice any more than go direct to the customer."

Following Ofcom's announcement that it would hold an industry-wide consultation into the impact of BSkyB's launch of its Picnic channel, the Financial Times revealed that the planned pay-TV service is opposed not only by BT Vision, but also by Setanta Sports, Top Up TV and Virgin Media (Ofcom guarded on BSkyB's Picnic move). Highlighting the concerns of BSkyB's competitors, the FT explained: Each offers services over or on top of the Freeview platform and fears Sky’s dominance of pay-TV could spread from satellite broadcasting to digital terrestrial television.

However, the article pointed out that Ofcom has made no recommendation and remains “completely open minded”. Furthermore, the regulator noted that Picnic would increase the choice of pay-TV services on digital terrestrial television, and concluded that there were three possible outcomes: either it could require that BSkyB should sell its content wholesale to rivals, as with cable; or it could insist that the service work with others’ set-top boxes and vice-versa; or it could force BSkyB’s to retail its channels indirectly through a third party.

Interviewed by the FT, Toby Syfret explained that Ofcom's decision on BSkyB’s DTT plans would be more significant. “This is something which has implications for the whole future of pay-TV in this country,” he said, adding that BSkyB had moved to pre-empt some concerns by providing details of the new service, which would replace Sky News, Sky Sports News and Sky Three on Freeview with Sky Sports One, Sky One and one Sky Movies channel for an undisclosed price.

Paraphrasing the popular view that Competition Commission's judgement of last year’s stock market raid on ITV by BSkyB was either a "witchhunt against Rupert Murdoch or an essential safeguard against anti-competitive concentration of media assets" (BSkyB ruling may be a hollow victory), the FT concluded that the Commission "did not find evidence to support arguments put forward by BSkyB’s rivals that the satellite broadcaster’s influence over ITV posed a threat to the integrity of its news output. Nor was it concerned about the impact on the advertising market".

Toby Syfret was asked for his view. “Richard Branson may be pleased, delighted at the verdict but in a way it’s a hollow victory,” he said.

Remarking on the success of Freeview in spearheading the switchover from analogue to digital broadcasting (North leads digital revolution), the Times questioned the long-term success of the Freeview proposition. First, the service is unable to offer broadcasts in high definition (HD); second, BSkyB, in which News Corp, ultimate owner of The Sunday Times, has a 39% stake, is attempting to withdraw the three channels it makes available on Freeview and replace them with pay-TV channels. BSkyB’s request is being considered by Ofcom.

The Times argued that Freeview is at a clear disadvantage: It does not broadcast any HD channels and will not be able to do so until after digital switchover in 2012 because it does not have the VCR amnesty band. Even after the analogue signal is turned off, and bandwidth freed up, the government has indicated it should be auctioned to the highest bidder. Some think the main terrestrial broadcasters have no automatic right to the extra capacity. Toby Syfret was interviewed for the article. “Do they [public-service broadcasters] get it by divine right, and will there be strings attached?” he asked.

Anticipating the seasonal rush for new mobile phones at Christmas, the FT speculated on the impact of the iPhone on consumer preferences (iPhone leaves its rivals hanging on). Reiterating Apple's forecast to sell 3m iPhones in Europe by the end of 2008, the FT cautioned that Apple could struggle to meet its European sales targets because of the iPhone’s high price and lack of a high-speed 3G connection to the internet. Additionally, in its approach to European operators, Apple may need to reconsider its unsubsidised and revenue-sharing proposition: European consumers are used to getting their mobile phones free or at a sharp discount because operators heavily subsidise all handsets for customers on contracts.

The article drew on a report published by Enders Analysis (iPhone in the UK: over here, overhyped and overpriced) which emphasised that the pricing point of the iPhone will limit its appeal to “Apple aficionados and wealthy fashion victims”. Furthermore, the report pointed out that, for the price of the iPhone, consumers in the UK could buy Apple’s new iPod Touch, which has all the features of the iPhone bar the phone, for £200, get a free N95 with many operators “and still have money left over for a trendy new shirt”.

Raising the prospect of T-Mobile bidding for 3, its loss-making rival (T-Mobile considers network sharing plan with rival 3), the FT explained that mobile operators are pursuing network sharing as an "opportunity to cut costs, given that fierce competition... is resulting in them cutting their tariffs with consumers". The article continued: "In 2005, 3 made a pre-tax loss of £1.4bn... Hopes of breaking even at the operating profit level have been hit by a decision by Ofcom... to require a 45 per cent cut in how much 3 charges for connecting calls to its network".

James Barford was asked for his view. He said: "This deal, if concluded, would leave T-Mobile as the most obvious potential buyer of 3."

Highlighting the increasing importance for broadcasters to make content available online (Broadcasters switch on to downloading picture,) the Financial Times concluded: "All are chasing the promise of a fast-growing market". Pointing out that online advertising, which underpins many of the broadband initiatives, is particularly strong in the UK, the FT estimated that the download-to-own part of the UK online video market alone will expand from £14.8m this year to reach £65m by 2011. However, the article also cited research to show that "such models will not take off fast enough to replace traditional television in the way that downloads have threatened the music CD. Several analysts also warned that the UK is trailing in making use of such new distribution", added the FT.

Quoting from a report published by Enders Analysis (BBC iPlayer: forever niche?), the article reiterated our view that PC-based video services “will remain niche in the short to medium term... The TV is the locus of family entertainment and the PC cannot replicate its appeal”. While free content would serve a brand-building purpose for broadcasters, the report concluded that “pay services are likely to have narrow appeal” because of the availability of pirated material and free substitutes, such as personal video recorders.

Citing research by Enders Analysis which predicts that by 2009 global music sales will be half their level at the peak of the CD boom, down from $45bn in 1997 to $23bn (HMV chief has to face the music and dance), the FT speculated on the demise of music retailing in the UK. At HMV, the article predicted, "CDs are expected to fall to 25 per cent of the sales mix in three years’ time, down from 36 per cent today, as the group tries to ride with the trend... only Virgin Megastores remains as a serious national rival and its last accounts show it making a loss". So could HMV be the last to survive, the FT asked? “I think we will be", answered the CEO, Simon Fox.

Reporting from the opening of HMV's first 'new generation' store (Last track plays as record stores go full circle), the FT columnist Jonathan Guthrie felt chastened by the experience. "There were fireworks. There was a rock band. There was even a cute dog. And underpinning all the razzmatazz was the sense of a historic business clutching at straws", he wrote. Following a period of heavy price deflation triggered by competition between supermarkets and traditional retailers, Guthrie continued, sales of CD albums, the key product category for music retailers, have fallen by around 7m to 58m in the first half of this year. "Record labels are struggling against stiff odds to convert illegal downloads into legitimate purchases", he concluded. Alice Enders was asked for her view: "There is a culture of gratuity among the young, fostered by the internet," she said.

Thursday, September 13, 2007

The Wall Street Journal reported on the growing trend for news papers to develop international readership online (UK Newspapers Eye Global Online Readers For Ad Revenue). All is not what it seems, as the article revealed: "Despite this promising new marketplace and the importance of offsetting declines in domestic circulation and advertising revenue, turning this audience into advertising revenue is proving elusive". Douglas McCabe was interviewed for the article. He said: "Several of the U.K.'s largest newspapers now have an online readership, much of it overseas, which is 20 times their domestic hard copy circulation." He added: "But in most cases it's unlikely to generate more than 10% of their revenues."

McCabe's view that overseas online advertising revenue is less than 10% of total advertising revenue, was challenged by Tom Turcan, general manager for digital operations at The Guardian, although he declined to provide a specific figure. Although he believed that The Guardian is attracting more genuinely 'global' online advertisers, he admitted: "We don't get as much (yield) from our overseas readers (online) as we do from domestic ones".

However, the WSJ interviewed other advertising specialists and analysts who concurred with Douglas McCabe that "there are structural reasons why advertising yields from overseas, online readers are currently lower than domestic counterparts". The article included an interview with Robert Horler, managing director of online advertising planner, Diffiniti: "A handful of U.K. newspapers, including The Times, The Guardian and the Financial Times can all genuinely say they are global newspapers," he said, "But if you look at how much advertising inventory they are getting from overseas, the answer is they aren't really delivering yet. Yields from the U.K. tend to be much higher."

Speculating on the arrival of a further iteration of Apple's market leading MP3 player (Sixth generation iPod anticipated), The Guardian interviewed Ben Rumley. Owing to the shared use of so many features, he said it would be an interesting test for Apple to see how the iPod can be developed as a product without cannibalising iPhone sales: "The iPhone's big widescreen makes the old video iPods look out of date, so it seems likely there will be some move in that direction." He added: "Apple always like to surprise people - last year they came up with the new Shuffle and no-one expected that."

Reporting on the competition between BSky B, Setanta and other pay-TV broadcasters for live sports audiences (On-screen battle kicks-off as new season starts), the FT commented: "Success is critical for Setanta to establish itself as a lasting rival to Sky Sports, which won 92 live games, and to justify the £392m it spent on Premiership rights. But this season will be of equal importance to other companies battling it out in an increasingly vicious pay-television market... Football rights have become central to Virgin Media’s attempts to revive its rebranded cable platform, BT Group’s efforts to ramp up its fledgling TV offering, BT Vision, and the ongoing debate about how much of a threat Freeview’s digital terrestrial television service represents to rivals."

Ian Watt was asked for his view: “We question whether the Setanta deal will do much more than help Virgin Media to tread water”, he said.

According to the Independent on Sunday, "some of the largest broadband providers in the UK are threatening to 'pull the plug' from the BBC's new iPlayer unless the corporation contributes to the cost of streaming its videos over the internet". Exposing the technical constraints on network capacity (Internet groups warn BBC over iPlayer plans: ISPs fear that introduction of web broadcasts will overload their networks as users download 'catch-up' TV), IOS quoted a spokesman at BT who said: "It is certainly a live debate between ISPs and the BBC. If the BBC gets the numbers it wants for iPlayer then network capacity could become an issue."

Ian Maude was asked for his view. He said: "No broadcaster has rights clearance to distribute all its broadcast content over the internet. The BBC, for example, holds the rights for in-house produced programming, as well as catch-up TV and series stacking rights for independently produced programming from the UK, but few internet rights for acquired content, such as feature films and sports events." He added: "At launch, around 60 per cent of the BBC's weekly TV schedule will be available via the iPlayer. However, we anticipate that the strong affiliation of viewers with the broadcaster brands will drive usage of their catch-up TV services, despite less than comprehensive availability of programming."

In an article entitled Virgin Media loses 40,000 customers to Sky, The Independent revealed that the group had lost customers in all four media businesses. The article concluded that the losses have hit Virgin Media's ARPU as the bulk of its departing users are high-spending 'triple play' consumers that had utilised its broadband, telephony and TV services.

The Independent interviewed Neil Burkett, chief operating officer of Virgin Media, who said he was "quietly confident" that the slide in customer numbers had ceased and that the disagreement with Sky had not damaged the Virgin brand. He said that the "storm of the second quarter" had blown over and that the vast majority of customer defections in both television and telephony had occurred early in the quarter.

Burkett challenged a recent research report compiled by Enders Analysis that suggested the company's 'quad-play' model - based on the assumption that consumers want to source broadband, television, fixed-line and mobile telecoms services from one supplier - was failing. He called the research "premature" and said: "It's going very well. The upside in the short-to-medium term is substantial."

Highlighting the exodus of Virgin Media's subscribers (Branson sees market going ‘yo-yo for a while’), the FT interviewed Sir Richard Branson hours after the company reported second-quarter results showing losses in customers and market share in each of its four businesses, leaving underlying revenues from its core consumer cable business down 4 per cent. The article revealed that only 125,000 of the media group's 4.7m customers had signed up for its much-vaunted 'quadruple play' of pay-TV, broadband, mobile and fixed-line telephony. Asked to comment on Virgin Media's boast that it was maintaining a vital competitive advantage by selling all four services, Claire Enders said: ”They should stop marketing the quadruple play. It’s wasting their marketing dollars.”

Also interviewed for the article, Steve Burch, chief executive of Virgin Media, said the results showed ”encouraging broadband and mobile contract growth, a resilient performance by our TV business and signs that our fixed-line telephony business is starting to react to renewed management focus”. However, statistics compiled by Enders Analysis showed Virgin’s former market leadership in broadband assailed by the rapid rise of BSkyB. Virgin secured 14 per cent of new broadband customers in the second quarter of 2006, Enders Analysis calculated, but by the same period this year that figure had fallen to 10 per cent.

Heralding the dismantling of the Virgin Media as a converged communications provider (Why has Virgin Mobile fallen from grace?), The Independent quoted the Enders Analysis report, Virgin Mobile price increases, which argued that recent changes to the quad-play pricing could reduce take-up of the package to "a trickle", and represented "another nail in the coffin for the fixed-mobile convergence bandwagon".

Marking the milestone passed by Apple as its online store achieved 10% of US total recorded music sales (iTunes Store rings up 3 billionth song), Ars Technica commented that the continued success of iTunes reflects growing consumer interest in legal music downloads. Underlining the rapid rate of change in the music market, the article quoted research published by Enders Analysis, which predicts a decline in sales of physical media from $45 billion in 1997 to $23 billion in 2009.

Covering the launch of the trial version of the iPlayer (iPlayer too niche, says report), the Guardian featured a report published by Enders Analysis (BBC iPlayer: forever niche?) which was published to coincide with the launch of BBC's new broadband TV service. Enders Analysis had cited comScore data showing that Channel 4's 4oD broadband TV website had 450,000 unique visitors in June, but predicted that the number actually using the application would be "far smaller". The report had also warned that technology issues, such as current standard 2MB broadband speeds, would mean that many viewers would be frustrated by download times of TV shows. The Guardian noted that the report had argued that it is likely that Freeview households - without personal video recorders and TV video on demand services but with broadband connections - will drive demand for broadcasters' internet video services: "We consider download as mainly appropriate for appointment viewing, not impulse viewing, making it a closer substitute for the DVD experience than for TV".

In an article which ranged widely over the future of the Virgin empire (Branson faces juggling test over his empire), Sir Richard told the paper: "The Virgin group is in its most successful period in the 40 years I've been in business... I'd like to be seen as the world's most respected brand." Yet while Virgin is bigger and more ambitious than at any point in its history, it also faces a raft of operational and strategic challenges, the FT added.

Asking if Virgin had bitten off more than it can chew, the FT reminded its readers that Virgin Media has become embroiled in an expensive and acrimonious battle with BSkyB in the UK pay-TV market. BSkyB has doubled its marketing spending as a result. Moreover, "Virgin may also have unwittingly provoked BSkyB and Carphone Warehouse into attacking the so-called 'double and triple-play' markets for combined phone, television and internet services that it previously had to itself ".

Claire Enders was also interviewed for the article. She said that the slide in the dollar over the past 18 months would mean that Sir Richard will not make a profit on his investment in Virgin Media unless the company is sold for more than $32 a share. But she added that Virgin has lost far fewer customers to BSkyB than some had predicted. She said: "There's no doubt that [Sir Richard's] luck, innovation and chutzpah have been a valuable addition to Virgin Media."

The FT concluded that the risk for Virgin is that a setback in any one part of the business has the potential to damage the brand and consumer confidence elsewhere. Claire, however, came to Sir Richard's defence: "To say that people won't take Virgin Atlantic because they are disgruntled Virgin Media customers is a bit of stretch," she said.

Commenting on the deal announced between Setanta, the Irish broadcaster and Virgin Media to carry content from six of its channels, including 46 live English Premiership games, on its cable network (Virgin Media to air Setanta’s football coverage), the FT reported that "analysts believe Virgin Media will be paying Setanta between £2 and £2.50 per subscriber per month. Setanta, which paid £392m when it bought a third of the live rights to Premiership games in 2006, is eager to raise its subscriber base from about 250,000 to the target of 1m it set for 2008".

Claire Enders was interviewed for the article. She said: “Breakeven or better from this investment will take at least a year or 18 months, but it is a good riposte to Sky in customer terms.”

Following a valedictory interview with the outgoing chairman of BT, Sir Christopher Bland, the FT broke the news that BT is considering the case for an ultra-fast broadband network that could deliver internet download speeds of up to 50 megabits per second (BT looks at ultra-fast broadband). The article revealed that the telco will offer broadband speeds of up to 24mbps from next year, as it rolls out a £10bn 'backbone' network and introduces technology known as ADSL2+. Sir Christopher said BT’s thinking had advanced “quite far” on the case for fibre to the kerb “That is the more likely development going forward," he said. However, he questioned whether “most consumers” would need broadband speeds of more than 16 or 24 mbps - but accepted some businesses might do.

BT was criticised by the Broadband Stakeholder Group, however, which claimed in April that the BT network would be too slow to meet the demands of the most demanding households and businesses by 2012. The FT found evidence to support this claim and cited research published by Enders Analysis, which estimates that less than a third of households will enjoy broadband speeds of more than 20mbps with BT’s ADSL2+ technology. This is partly because broadband speeds are dependent on the length of copper landlines running from BT phone exchanges to homes, the article concluded.

Having interviewed Ralph Bernard , chief executive of GCap (GCap considers digitally tuning out), the Financial Times concluded that the owner of Capital Radio may have to pull out of digital radio if it does not see faster growth in the technology and get a commitment from regulators to switch off analogue signals. The FT reminded its readers that having secured the first digital radio multiplex, GCap has invested more than any other UK commercial broadcaster in digital audio broadcasting (DAB) technology. Grant Goddard was also interviewed for the article. He said: “Financially, digital radio has added significantly to the problems of the commercial radio sector. Already, half of all analogue stations lose money or make an annual profit of less than £100,000, and digital radio has incurred significant investment costs while not yet proving profitable for any channel operator or multiplex owner.”

Reporting on the news that a Channel 4-led consortium had won the contest for the UK's new national digital radio licence (Channel 4 to take on BBC in DAB battles), the Financial Times suggested that the Ofcom-run auction should be seen as a critical point in the UK radio industry's shift from analogue broadcasting to digital. The FT claimed, furthermore, that by winning the contest the consortium would give a shot in the arm for digital audio broadcasting (DAB) and provide stronger competition to the BBC. However, Grant Goddard, who was interviewed for the article, questioned Channel 4's chances of success, saying several of its proposed formats had already failed in analogue radio. He said: "The commercial sector's track record in the speech format, which is offered by only 1 per cent of licensed stations, is hardly inspiring."

Reporting on the bid for Virgin Media by the private equity firm, Carlyle Group (Virgin Media, British Cable Service, Gets Takeover Offer), the New York Times sought the view of Ian Watt. He said: “Virgin Media has been somewhat mismanaged at a strategic level for some time... Taking it private would enable new owners to take a longer-term view and allow for a restructuring without immediate pressure of increasing customer numbers.”

Speaking at a conference on the future of the regional press in the UK (Service of regional press makes local TV plans 'unnecessary' - media expert), Claire Enders told delegates that, in spite of a tough climate, the local press continued to meet the expectations of local communities both for local news and locally-driven information. "There is no market failure that the current players aren't addressing" she said. "I think I first started hearing about the death of the regional newspaper in 1994 and 13 years later the medium is still doing pretty well." She added that there was a "dramatic growth" in regional press websites, and there was still a vibrant picture in terms of local media consumption.

Following the story that eBay had abruptly terminated its advertising contracts with Google (Auction website eBay has pulled its US advertising from search engine giant and adversary Google), BBC News asked Ian Maude to explain eBay's precipitate action. He said that eBay was disappointed by Google's plans to host a rival function in an attempt to build market share for its Google Checkout payments service, which was launched in the US last year and became available in the UK in April. "It was a clever-dick marketing tactic from Google that has gone wrong" he said. "eBay is the dominant player in the online payments market with PayPal and they have reacted very badly to the stunt, feeling that Google is trying to park their tanks on their lawn."

He added that eventually this battle will be resolved: "There certainly will be other conflicts as the industry consolidates in areas such as digital advertising."

Raising the prospect of a takeover battle for EMI (Terra Firma Agrees to Buy EMI for 2.4 Billion Pounds), Bloomberg interviewed Claire Enders. She said: "The company is totally in play. They are hoping a bidding war erupts.''

Speculating on the compounding effects of intensifying competition in converged media (Virgin Media feeling the effects of BSkyB withdrawing channels), the Sunday Herald asked the question: "just how much trouble is Virgin Media in and how much of an additional threat does BT Vision pose?" Ian Watt was asked for his view. He played down the risk, saying: "BT Vision is primarily a tool of BT to hold on to its premium customers to reduce the churn of its existing customers."

Commenting on Virgin Media's loss of critical market share (BT turns up heat on Virgin Media - The phone giant’s entry into broadband TV is the latest blow for Branson’s baby), the Sunday Times concluded that "BT’s arrival in the pay-TV market underlines the extent to which the convergence between telecoms and television is finally becoming a reality". A number of analysts were interviewed for the article. One said: “The business fundamentals remain under intense pressure. Telephony decline is set to continue due to uncompetitive price offering. TV is suffering from lack of content and competition from Sky. Broadband growth is declining in a fragmented market approaching saturation.” Claire Enders was asked for her view. She said: “Who would have thought that the market would move away from free because Carphone messed it up? People are happy to pay for something that works. It’s just the best thing that’s ever happened to BT.”