Financial Times

20 November 2017 - 11:56am -- Olga De Giovanni

Francois Godard was quoted in an article on Altice’s shares, which have almost halved in the past few weeks after poor third-quarter results were compounded by worries over its high levels of debt. In 2014, Altice acquired SFR, which still accounts for almost half of its revenues. This deal making has left Altice saddled with about €51bn of debt, much larger than the company’s €15bn market capitalisation and more than five times its earnings before interest, taxes, amortisation and depreciation. Investors want to see that Altice can manage the businesses that it has expensively assembled — particularly in France, its largest market. Francois said “besides sustaining network deployments, to turn around SFR, Altice needs to abandon short-term fixes, invest in its workforce and customer service and differentiate through valuable innovation — in other words the opposite of the model followed so far”.


17 November 2017 - 10:58am -- Olga De Giovanni

Alice Enders was quoted in an article on the Sky/Fox bid. This week, the CMA has published a transcript of its first “expert round table” on the bid: that on media plurality (another on broadcasting standards will follow shortly). The review by the Competition and Markets Authority (the UK’s senior competition regulator) is what is known as stage 2 of the inquiry into this proposed merger, triggered by Karen Bradley, in September, after several months of scrutiny by the media regulator, Ofcom, whose inquiry was requested by Bradley, using her powers under the 2002 Act – media plurality being the only part of competition oversight of UK transactions of this size not reserved for the EU authorities. During the first expert round table Stewart Purvis, offered his own “theory of Murdoch”: the establishment of a right-of-centre broadsheet newspaper, alongside a raucous popular tabloid and an opinionated news channel – a pattern he identified in the US and in Australia, and now potentially in the UK. Alice gently deflated this conceit, pointing out that Sky in the UK is a family-friendly platform business, very different from Fox News in the US, which is primarily dependent on advertising revenue.

Altice in crisis as formulaic model flounders in France

The telecoms group has suffered a dramatic stock market correction following its Q3 results, as investors woke up to the continuous decline of its main unit, France’s SFR – leading its CEO to resign. Closure of a tax loophole will further erode SFR’s revenues by up to 4% in 2018

Despite being France’s largest fibre network, SFR’s broadband market share dropped 4ppts over three years. Notwithstanding grandstands on ‘convergence’ and expensive rights acquisitions, it is losing pay-TV subscribers – it looks unlikely to challenge Vivendi’s Canal+ in next year’s Ligue 1 auction


15 November 2017 - 10:58am -- Olga De Giovanni

Joseph Evans was quoted in an article on Uber, who had seemingly struck a deal with an investment group led in part by Japan's SoftBank. The deal, which would have seen SoftBank take a stake in Uber, seemed all-but-confirmed. Joseph said that this initial failure to secure investment is troubling for the company. He added “Uber being unable to lock down some of the easiest money in the world right now is a very worrying sign.”


14 November 2017 - 3:36pm -- Olga De Giovanni

Tom Harrington was quoted in an article on the Amazon/Lord of the Rings deal. Tom told TVBEurope Amazon's reported $250 million deal to secure the rights to JRR Tolkien's Lord of the Rings will not be the last time a streaming service will win out over traditional TV. He said "the traditional broadcasters are already worried in terms of these large super-premium productions because they can’t afford them on their own. They have to go into co-productions which inevitably which they wouldn’t have done previously. Tom added “it’s somewhat difficult for them in terms of major super-premium scripted dramas like this because most broadcasters have to provide 24 hours of entertainment across a different number of channels whereas streaming services can concentrate their not inconsiderable spend on particular projects. At the moment it does tend to be these big one-offs but it is going to become more and more difficult for traditional broadcasters to win those auction-type arrangements for major productions". According to Tom, the deal is a major win for Amazon. "In terms of video, Amazon has had a bad few months and they need a win. Amazon has been worried that they haven’t had a hit in the way Netflix has with Stranger Things. So they’ve gone back to the easiest way of acquiring a hit, which is acquiring IP which has shown to be very successful in the past. A lot of people were in the market for this so Amazon has gone above and beyond to ensure they’ve got what they think will be a guaranteed winner."

Micropayments and Microsubscriptions: Beyond advertising

Digital advertising in the UK has been a phenomenal success story, but a concentrated one, such that many online media companies have not found a sustainable model

User payments are growing, but are currently focused on large, expensive bundles: Spotify, Netflix, the New York Times. This implements a hard division between free and paid and limits the potential audience

The Times

13 November 2017 - 11:00am -- Olga De Giovanni

Enders Analysis was quoted in an article on the expensive competition for entertainment content. In the past 12 months, Netflix has spent $8.5 billion on programming for its subscription video-on-demand service. With consumers increasingly watching movies and television via on-demand streaming, the Netflix subscription model is gaining on traditional models of advertising-funded viewing. As a result, Netflix and other streaming services have proved themselves nimbler and more willing to take risks than Hollywood studios. They also have several advantages over traditional television incumbents, not least the fact that in the UK they are not bound by regulations such as the 9pm watershed (only a quarter of Netflix’s original content would be allowed before the UK watershed). They also have such deep pockets that the team at Enders Analysis believes it is doubtful whether in a decade’s time Britain’s public service broadcasters will still be able to compete.

BT Q2 2017/18 results: Unresolved issues

BT Group revenue growth dipped to -1.5% from an instance of rare modest positive growth in the previous quarter, albeit mostly due to a predicted price timing effect in Consumer and revenue growth predictably going from bad to worse in Global Services

The bright spots were continued strong 4% revenue growth at EE, with an acceleration in mobile-related revenue also helping other divisions, and strong growth of 5% in external revenues at Openreach driven by accelerating fibre adoption by competitor customers

CNC News

10 November 2017 - 2:15pm -- Olga De Giovanni

Chris Hayes was quoted in an article on royalties from thousands of song classics tucked away tax-free. Musical memories are offshore for the same reason as other assets — tax advantages. Skipping taxes helps increase earnings from intellectual property — patents, copyrights, trademarks and trade secrets — as well as other holdings. Music publishing rights have retained value despite turmoil in the music industry that has eroded the worth of related rights, creating steep declines in royalties for sales of digital music or albums. If the owner plays it right, music catalogues can be real money-makers, and the steady income that can be drawn from a music catalogue is a lure for institutional investors. Chris said "there is a burgeoning market for music catalogues among institutional investors who are looking for fairly reliable revenues in the future"


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