Claire Enders was quoted in an article on the bidding war for Sky. Comcast’s interest this week puts Sky at the center of a global race for scale among media giants, with Comcast and Disney CEOs both calling the pay-TV company a “jewel,” and sets up a potential bidding war. On Tuesday morning just before the daily flurry of U.K. stock-market statements, Martin Gilbert, the co-CEO of fund manager Standard Life Aberdeen Plc and a consummate dealmaker, finds himself in the unlikely situation of being the broker for Sky shareholders with two billionaire media families. Moreover, at Sky, a case has been steadily building for Gilbert and the other independent directors to push Fox for a better offer, even before Comcast got involved. Premier League soccer viewing has rebounded this season and Sky came out a big winner in the league’s auction earlier in February for three more years of broadcast rights, paying less per game. The auction result added 5 billion pounds to Sky’s valuation, according to an estimate from Claire.
Matti Littunen was quoted in an article on ad fraud, which according to the World Federation of Advertisers (WFA) forecasts ad fraud will cost brands more than $50bn by 2025, citing it as “second only to the drugs trade” as source of organised criminal income. Blockchain is geared towards recording every transaction along the supply chain, which could go some way in alleviating the some 70% of brands currently amending their media agency contracts to bring clarity to the buying process, particularly fee structures. Matti warns brands on how they approach it “Blockchain is a typical glitzy technology fix and it sounds like a silver bullet that’s going to solve these issues for the industry. However, they need to remember that even tech like blockchain calls for a trust between partners to set up, and strategic direction in terms of where the industry wants to go”. Marketers, he argues, should look to iron out the more fundamental issues in the industry that have to be solved before they look to deploy an entirely new technology.
In this report we develop a rough segmentation of the adult population by level of online use: offline (10% of adults), shallow online (10%), deep online (80%). We examine how online services seeking to reach new audiences increasingly face the obstacle of missing demand rather than a lack of consumer skills or access
Alice Enders was quoted in an article on Comcast which has jumped into the fray for Sky Plc, challenging Rupert Murdoch’s 21 Century Fox Inc. and Walt Disney Co. with a cash offer valuing the business at 22.1 billion pounds ($31 billion) and opening the possibility of a bidding contest for the U.K.’s biggest pay-TV company. Comcast sprung the offer on Sky Tuesday morning, its timing suggesting it sees an opening to win over U.K. officials and investors. Fox has been struggling to secure regulatory approval for its bid and some Sky holders have been agitating for a better offer after Disney’s $52.4 billion agreement in December to buy most of Fox’s film and TV assets, including its stake in Sky. Fox would hand full control of Sky to Disney if its takeover is successful. Alice said “It’s obviously a huge gauntlet that’s been laid down to the Murdochs in relation to their pre-existing offer. Sky’s success at the Premier League soccer rights auction this month made it more desirable”. She added “Sky is a very attractive business”.
UK residential communications market revenue growth fell again to 1.2%, with weakening ARPU growth the main driver. New customer pricing remains flat to down, and existing customers are being increasingly discounted, fuelling the ARPU weakness
High speed broadband adoption is proceeding apace, but the high speed premium is fairly thin, muting the impact on ARPU. Regulated wholesale price cuts from Openreach finalised today and due in April 2018 will not help
Claire Enders was quoted in an article on 21st Century Fox which is sweetening its offer to U.K. regulators reviewing its takeover of Sky Plc, raising the prospect that Walt Disney Co. would guarantee the future of the European broadcaster’s news service. Rupert Murdoch’s Fox, which is in negotiations with competition authorities over its 11.7 billion pounds ($16.4 billion) purchase of Sky, proposed this week a funding guarantee of at least 10 years for Sky News, the U.K.’s first 24-hour news channel. Disney would inherit that commitment with its $52.4 billion purchase of most of Fox’s film and TV assets, including Sky. Claire said that the new guarantee should reduce concerns about Fox using control of Sky News’s budget as a way of exercising influence at the channel. She added “it’s a much thicker firewall. You could even say it’s an impregnable firewall”.
Virgin Media’s Q4 performance was a little softer than expected, with subscriber figures quite weak and no improvement in ARPU growth despite a better implementation of its annual price rise
The cause is however likely market-driven, with broadband demand slowing and all operators struggling for ARPU growth, and Virgin Media does now lead the market for subscriber, RGU and revenue growth
The prospects for 2018 are solid if not spectacular, with Project Lightning driving market share gains and ARPU defended by a network speed advantage that will last for many years yet
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
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)?”.
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.