VOD edges forward

This report sets out our views about current trends and the longer term potential of Video on Demand (VOD) services in a world of converged TV and PC applications

Contrary to views expressed in the Digital Britain Final Report, we think that the non-linear on demand world will develop very slowly, with VOD applications unlikely to achieve more than 5% share of total TV viewing in ten years‟ time

We project that VOD use will achieve 2% of total TV viewing by 2013, some £300 million in total pay revenues and a little over £100 million in spot advertising revenues

Google UK Q2 results: flatlining

A last minute rescue proposition has postponed the threat of Setanta entering into administration by at least another week, subject to meeting its revised payment schedule of sums owing to the Premier League

The profound commercial difficulties experienced by Setanta highlight the weakness of EU efforts to ensure competition in the sale of live televised rights to top UK domestic football and underline the inflated rights costs that would face any other complementary premium pay-TV sports supplier

Carphone Warehouse June quarter trading update: on course

The distribution business experienced modest growth in connections and revenue, easily outpacing European market handset growth of -15%, as the company continues to build market share

At TalkTalk Group (TTG) net broadband additions for the quarter were relatively strong, given likely market growth, probably due at least in part to reduced subscriber loss at AOL UK

In our view cut-price business broadband, rather than IPTV, offers the best prospect of profitable revenue growth in fixed line

Vodafone June quarter KPIs: the slide continues

Vodafone’s European revenue growth continued to slide, down to -4.4% in the June quarter from -3.3% last quarter, which itself was a sharp drop

A substantial element of this quarter’s decline was driven by an acceleration in termination rate cuts in Germany, but the general trend is weak volumes driven by a weak economy

With a substantial termination rate cut in the UK taken from 1st July, we expect growth to decline again in the September quarter, before stabilising/improving for the rest of the year

Canvas “drive digital Britain”

The BBC Executive has fleshed out many details of Project Canvas in response to questions raised by the BBC Trust: Canvas being the proposed joint venture between the BBC, BT, ITV and Five that aims to solve the challenge of realising the seamless convergence of linear broadcast TV and internet video to the TV screen in the living room

For Project Canvas to succeed, it is likely, in spite of its merits, to have to address competition concerns in the areas of company structure, stifling innovation and editorial controls over who gets to participate

BT FY 2009-10 Q1 results: what goes down

BT’s Q1 results provided welcome respite from a string of bad news, and some evidence of management’s ability to cut costs, but were helped by a temporary sharp reduction in capex and a VAT repayment. It remains early days

The ‘21st century’ upgrade to the core network now appears to be largely complete and delivering cost savings, but a separate voice network will continue to run over the access infrastructure

ITV interim results 2009: every little helps

ITV reported a pre-tax loss of £14 million in H1 2009 as the advertising recession took a grip, with total TV NAR down an estimated 17% against H1 2008, while ITV family NAR fell year on year by 15%

Although visibility over future advertising spend is restricted to a couple of months, we expect significant further decline in total TV NAR over the remainder of 2009 and 2010, before recovery starts in 2011/12

Virgin Media Q2 2009 results: positive impact from price increases

VMed’s Q2 results were again mixed but, on balance, encouraging, with the impact of the May price increases feeding through into revenue growth

Cable volume performance was poor but, with the exception of broadband, no worse than expected, and is not expected to deteriorate further relative to the market

We remain optimistic that management will succeed in combining revenue growth with reductions in operating costs to generate sustained growth in cash flow from autumn 2009

UK Classified Advertising

UK classified advertising, which covers categories such as recruitment, property, used car sales as well as directory services including Yellow Pages, has been hit severely in the recession

Last year, we estimate there was a 10.4% decline to £4.1 billion of total classified expenditure across all media including newspapers, magazines and online

However, trends have since accelerated, and we project total classifieds will generate about £3.2 billion this year, a decline of 27% on 2008


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