TalkTalk Group Q3 2017/18 results: Growth getting more expensive

TalkTalk’s subscriber growth picked up a little in the quarter, but ARPU growth turned back negative, leaving consumer revenue still declining despite the heroic efforts it has made to turn around its subscriber growth in a slowing market

It is expecting even stronger subscriber growth next quarter, but it may need this to maintain ‘headline’ revenue growth given falling ARPU, and the high marketing costs required to achieve this have driven a reduction in EBITDA guidance

Arab News

19 February 2018 - 12:25pm -- Olga De Giovanni

François Godard was quoted in an article on the broadcaster OSN which has signed the Middle East’s first partnership deal with US entertainment giant Netflix, signalling a shift in the region’s media landscape. François said the infrastructure of the Middle East meant the OSN-Netflix deal made sense. He said “When you are in a region where broadband penetration is lower, where payment systems are less developed, it makes more sense to (partner with) an established player. Netflix is a very opportunistic company. They believe in their model, so they are not afraid to partner with other people. We may see deals like this more in the future — why not a deal between Netflix and Sky (in the UK)?”.

The Drum

19 February 2018 - 12:24pm -- Olga De Giovanni

Matti Littunen was quoted in an article on Keith Weed’s, Unilever marketing chief, speech at the IAB’s Annual Leadership Meeting last Monday, and the industry reactions. However, what on the surface seemed to be a bold statement of intent may not spur Google and Facebook into taking the action some industry observers have speculated they will. So while all parties publicly lauded Unilever and Weed’s public proclamations, there was also a vocal constituency that doubted the likelihood of a wholesale shift in philosophy, and business model, from the internet’s two-largest names. Matti argued that the power is in advertisers’ hands when it comes to pressuring Google and Facebook to change their ways. Although a sustained squeeze from the very top to the very bottom of their advertising operations will be required if the ills over brand safety and fake news are to be remedied. He said “it seems to be that FMCG brands are the ones who are most exposed to this and the most willing to move forward”. Matti added that while it feels like the brand safety debate will be everlasting, Google and Facebook have – in some respects – bowed to brand demands by introducing more stringent third-party verification systems and investing in both human and AI moderation.

The Times

15 February 2018 - 11:24am -- Olga De Giovanni

James Barford was quoted in an article on the Premier League’s British broadcasting revenue which is set to fall after a huge jump for the previous rights deal. With five of seven packages sold for £4.46 billion, down from a total bill of £5.14 billion in 2015, the rivalry between the bidders Sky and BT has calmed. This year’s auction took place as the companies faced other crucial issues, with Sky preparing for a takeover and BT recovering from an accounting scandal while grappling with a £14 billion pensions deficit. For BT, the stakes were equally high. The company is so far paying about 8 per cent less for all its matches this time round, but could yet spend more by winning the remaining packages. The outcome of the auction for BT received a mixed response among analysts. James said “It’s a small saving [overall] but they’ve only got one package. They might end up paying a bit more”.

Daily Mail

15 February 2018 - 11:23am -- Olga De Giovanni

Julian Aquilina was quoted in an article on the battle for the Premier League football rights, where Sky has emerged as the big winner sparking fresh criticism of BT's expensive foray into sports broadcasting. While Sky slashed the amount it pays per match, arch-rival BT is paying more. The blunder piles fresh pressure on Gavin Patterson, BT's embattled boss, who has overseen a £5billion spending spree on sport. Yesterday it insisted it had 'remained financially disciplined' in the Premier League rights auction, paying £885million for 32 matches per season – £9.2million per game. Julian said “some people will be pleased BT has not increased its spend, but it does look like they have missed an opportunity to reduce their costs per game. It's also worth remembering Sky could not actually be allowed to win the package BT won, and it's not clear who else would have come in with a bid for it”.

AFP Sport

15 February 2018 - 10:56am -- Olga De Giovanni

Julian Aquilina was quoted in an article on the results of the Premier League auction. The price paid per Premier League game has dropped from £10.2 million to £9.3 million for the time being following the latest deal. Sky held on to its position as the main broadcaster of live matches, claiming four of the seven available packages for 2019-2022, with BT taking the other package sold so far at a total combined cost of £4.46 billion ($6.16 billion). Sky's share price rose three percent on Wednesday after boasting how the new deal sees them paying 16 percent less per game than the previous agreement for their 128 games. Julian said "It is excellent news for Sky. Neither player was pushed to position themselves to bid for all the packages like the last time. They can still offer all the packages to their customers presuming no third party wins the other two packages".

The Drum

14 February 2018 - 1:12pm -- Olga De Giovanni

Matti Littunen was quoted in an article on Keith Weed, Unilever’s chief marketing officer, who set to put the technology giants – Facebook and Google - on notice in a speech on Monday to major advertisers, media groups and technology companies at the annual Interactive Advertising Bureau conference. Unilever, the world’s second-biggest marketing spender, is threatening to pull its advertising from digital platforms such as Google and Facebook if they “create division”, foster hate or fail to protect children. Speaking to The Drum after Weed's speech yesterday, Matti suggested there wasn't a "one-size-fits-all" approach to addressing transparency and that not all brands are baiting with their marketing spend as. He said "Some big brands have indeed pulled a lot of spend from some of the online platforms, but other brands who are less concerned about the PR or have a different kind of business model have stepped in and said 'if they're moving budget then there's an opportunity for us to move into this space'. So it shows that there is much to be done before the whole industry is committed to the same kind of standards [as Unilever and P&G]".

Advertising: this year, next year

We forecast UK display adspend to grow by 3.1% in 2018 (<1% in nominal terms), with TV roughly steady, newspaper decline slowing and digital growth slowing a little

Households are facing an income squeeze and the ability of debt and credit to carry them over is reaching its sensible limit. Brexit-related uncertainties remain the single strongest drag on business investment, dampening ad spend

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