TV NAR forecasts: 2012-2016
With the economy drifting sideways, we have set our centre case forecasts at 0-1% average annual growth in TV NAR and assigned a low probability to a repeat of the hyper-cyclical downturn of 2008/9
Comparative international data show a pervasive long term weakness in display advertising trends across the developed world, while emerging markets in Asia, Latin America and Central/Eastern Europe take an increasing share of global budgets |
Media, TV |
January 2012 Access this report
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Apple rewrites the textbook
Apple has begun selling interactive textbooks via its iBookstore, a move which is likely to accelerate the digital transition in education
However, the pace of change will be slowed by the cost of devices and the limited number of textbooks that have been designed for tablet computers
By developing educational software and course materials, Apple is trying to position the iPad at the centre of students’ educational lives – a niche that could significantly boost its hardware sales |
Media, Technology |
January 2012 Access this report
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More news under the Sun?
Rumours that News International will consider launching a newspaper to replace the News of the World have circulated for months, and probably only one event can dispel them
Trinity Mirror has picked up the bulk of the 60% of NoW copies that have not entirely fallen out of the market since June 2011, and arguably the longer any launch is delayed the harder it will be for NI to attract them back |
Media, Press |
January 2012 Access this report
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Carphone Warehouse December quarter results: Weak prepay hits revenue, but strong contract supports profits
Carphone Warehouse’s Q3 2011/12 volume and revenue was severely hit by a steep reduction in UK prepay volumes, with prepay subsidy cuts driving a drop in the UK market of as much as 40%
However, stronger volumes of higher margin contract handsets drove a small improvement in gross profit for the quarter
The unexpected prepay weakness means that Carphone Warehouse’s handset business will have roughly flat operating profit in its 2011/12 financial year at best, although given the negative external factors this would reflect a strong underlying performance |
Mobile, Telecoms |
January 2012 Access this report
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Recorded music: is the US bouncing back?
US album volumes in 2011 rose for the first time since 2004, but lower pricing may continue the revenue decline
UK album volumes declined 5.6% in 2011. HMV’s new-found breathing space removes a key risk for the outlook
US radio royalties to music publishers have been agreed in principle and will see a return to a revenue based payment |
Media, Music and Radio, Non-UK Media |
January 2012 Access this report
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Google UK results: mobile and display ascendant
Google’s UK revenue grew 23% to £676 million in Q4 2011, taking 2011 revenue to £2,525 million, up 20% year-on-year, 2 ppts below our November estimate
Globally, gross revenue rose 25% year-on-year, with mobile and display performing strongly, but rising costs pulled net revenue growth down to 8%
Our growth forecasts for Google’s UK revenue remain unchanged; we expect UK internet ad spend to rise from £4.7 billion last year to £5.8 billion by 2013, representing 35% of total advertising, as print continues to fall |
Media, Internet |
January 2012 Access this report
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Al Jazeera needs Canal+
Qatar’s Al Jazeera will launch its French pay-TV channel by this summer, showing weekly Ligue 1 and Champions League games, but it has yet to disclose a business plan and distribution deals
The new channel is a complement to Canal+, which broadcasts the most attractive games. Al Jazeera would need to obtain distribution on the Canal+ platform
Even if such a deal were to be struck, Al Jazeera would struggle to break even |
Media, TV |
January 2012 Access this report
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Two UK consumer recessions for the price of one
UK households cut their real spending in 2011, and we expect their spending to, at best, flat-line in 2012 and 2013
From an economic perspective, flat real advertising growth is our central case for 2012 and into 2013 for the UK
Poor sales prospects and low profit margins on heavy price discounting will dissuade advertisers from higher spend until tangible evidence of a consumer recovery emerges. |
Media |
January 2012 Access this report
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Netflix faces uphill battle in the UK
The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT
Unlike in the US, Netflix’s UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free
The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US |
Media, TV, Internet, Technology |
January 2012 Access this report
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Virgin Media's cable broadband speed upgrade: put that in your pipe
Virgin Media’s plan to double the line speed of most of its broadband customers is the latest in a series of moves to retain its position as the leading high speed internet service provider in the face of BT’s deployment of next generation access (NGA)
The move presages further price increases and an upgrade to offers for new cable customers, but is in the first instance about retaining the large existing base of cable customers currently on 10 Mbit/s |
Media, Fixed line, Internet, Telecoms |
January 2012 Access this report
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Digital platform growth post analogue
As Phase 1 digital shift from broadcast analogue to digital nears completion, individual platform growth trends have almost flattened out
The most likely area of change in platform trends over the next ten years concerns basic only subscription pay-TV, where we anticipate an overall increase in the total pay-TV base and change in platform balance arising from the introduction of low price basic packages |
Media, TV |
December 2011 Access this report
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Google versus Facebook: display advertising
Facebook is winning the battle for eyeballs and advertising in the internet display arena, with revenues projected to reach $5.3 billion in 2012
By comparison, we expect Google to achieve revenue of $2.5 billion, after traffic acquisition costs, though it remains the king of internet advertising, due to its dominance of search
Increasing advertiser demand for scale and performance will make many publishers increasingly reliant on one or both of the internet giants for audience and revenue growth |
Media, Internet |
December 2011 Access this report
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Pre-Christmas tablet market update
Apple has now sold 40m iPads – we estimate 4 to 5m in the UK – and goes into the Christmas season with no credible competitors beyond Amazon’s Kindle Fire, which is so far only available in the USA
Android phones are selling in huge numbers at half the price or less of the iPhone, but would-be iPad competitors are the same price or higher. With the continued absence of a meaningful content ecosystem for Android tablets it is hard to see consumers buying them in substantial numbers |
Media, Technology, Telecoms |
December 2011 Access this report
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EMI: the game of musical chairs continues
Citigroup has agreed to dispose of EMI’s recorded music division to Universal Music Group, and a Sony-led consortium is buying EMI’s music publishing division
UMG’s merger with EMI may raise competition concerns in the US and EU on the already concentrated recorded music market. Citigroup bears no risk
Depending on the nature of the strategic alliance between Sony/ATV Music Publishing and EMI Music Publishing, the EU may raise competition concerns on digital licensing |
Media, Music and Radio |
December 2011 Access this report
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The Netflix whirlwind
The spectacular growth of Netflix in the US has underlined the potential of online streaming subscription services offering films and other premium entertainment
As Netflix plans to enter the UK and Ireland in Q1 2012, its core US operations are in a critical phase of extremely rapid adoption, rising competition and escalating content costs, the successful outcome of which appears crucial to the international expansion of online streaming |
Media, TV, Internet |
December 2011 Access this report
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UK broadband and telephony trends to Q3 2011, residential broadband projections to 2016
In this presentation we show our analysis of trends in UK broadband and telephony to September 2011, together with our latest projections for residential broadband subscribers and market shares to 2016. Highlights for the 2011 September quarter include accelerating growth in the number of subscribers to high speed broadband, and the continuing increase in market share of BT Retail and BSkyB at the expense of virtually all other players. This quarter’s edition includes a look at high speed broadband pricing, and our take on the new guidelines on broadband advertising. |
Fixed line, Telecoms |
December 2011 Access this report
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AOL, Microsoft and Yahoo! seek solace together
AOL, Microsoft and Yahoo! are partnering to cross sell non-guaranteed display inventory in the US, highlighting their need for scale in the face of increasing competition from Google and Facebook
Aggregating unreserved ads via their respective networks may boost share of ad budgets, but the focus on less valuable inventory means any impact is likely to be small
Short of extending the partnership to include all inventory and greater investment in technology there seems little the three companies can do to stop further erosion of display share, though revenues should continue to rise |
Media, Internet |
November 2011 Access this report
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Zoopla’s merger with the Digital Property Group: implications for digital property media
Zoopla and The Digital Property Group, DMGT’s property portfolio which includes Findaproperty, Primelocation and Globrix, announced a merger on 14 October 2011. Under the terms of the proposed merger, DMGT would receive a 55% interest in the merged entity
A merged Zoopla and DPG will compete more effectively with market leader Rightmove, in a property market scaled down by one-third in terms of the number of transactions |
Media, Press, Internet |
November 2011 Access this report
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Mobile revenue growth and outlook Q3 2011: The outlook bleakens
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request |
Mobile, Telecoms |
November 2011 Access this report
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C&W Worldwide H1 2011/12 results
Cable &Wireless Worldwide’s performance for the six months to September was weak but made to look worse by one-offs
Underlying performance continues to be hit by strong competition and loss of voice revenue, but the impact of this has been made worse by underinvestment in data centres and neglect of the wholesale and SME businesses
The outlook for the year to March 2012 is poor, in line with the June warning. Beyond that, further investment in hosting and related capabilities will be necessary, and we continue to expect modest growth |
Fixed line, Telecoms |
November 2011 Access this report
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