Publications

Format: Feb 2017
Leave blank for all. Otherwise, the first selected term will be the default instead of "Any".
Leave blank for all. Otherwise, the first selected term will be the default instead of "Any".
Sector(s) Datesort ascending
Amazon’s ad business: shoppers for sale

Amazon’s marketing services bring in a growing stream of direct, high-margin revenue, but their main role is still in supporting vendor partnerships

Amazon uses customer profile data to profit from its own media and that of others, illustrating the value of a direct customer relationship in online advertising

In the future, Amazon’s moves into video content and voice interfaces are likely to significantly expand ad inventory, but maintaining the trust of shoppers is not straightforward

  • Amazon
  • Facebook
  • Google
Media, Mobile, Technology, TV 27 February 2017
Virgin Media Q4 2016 results: Accelerated build, delayed benefits

Virgin Media successfully ramped up its network extension in Q4, passing more than double the homes in the previous quarter, and above the rate required to meet 2017 expectations

Net customer additions were, however, relatively weak, entirely due to extra churn caused by the price increase implemented in the quarter. The price increase’s effect on ARPU and revenue growth was muted by ARPU discounting for new customers, leaving revenue growth broadly unchanged

Subscriber growth has already improved in early 2017, and is likely to continue to improve through the year. The discounted ARPU impact will be more sustained, but robust revenue growth is still likely throughout the year

  • Liberty Global
  • Virgin Media
Fixed Line, Media, Telecoms, UK Media 24 February 2017
21st Century Fox: Unfinished business with Sky

21st Century Fox’s (21CF) second attempt to acquire Sky comes at a time when the TV world faces mounting online pressure, accompanied by erosion of territorial boundaries in an increasingly global marketplace 

Despite some investor concerns about Sky’s ability to deliver its operating targets over the next five years, we consider the underlying business to be sound and starting to show benefits that derive from its international scale 

21CF’s bid has a strong strategic logic in terms of growing international scale further and evolving a global platform that integrates shared content strengths in sports and entertainment with Sky’s top of class expertise in customer relationships 

  • 21st Century Fox
  • Sky
  • Sky Deutschland
  • Sky Italia
Media, TV 22 February 2017
News brands: Rise of membership as advertising stalls

Despite a slowing of circulation decline in 2016, UK national newspaper brands continue to face profound structural challenges, with print advertising spend expected to be down at least -15% for the year

In digital advertising, tech and distribution platforms continue to dominate growth with newspaper publishers and other content producers competing for an increasingly small slice of the revenue pie

In this context, many publishers are turning to paid membership and content subscription models to generate online revenues; success here will require a radical shift in thinking to a retailer mindset that delivers high quality reader experiences through integrated execution of tech, data, marketing and design

  • DMGT
  • Guardian Media Group
  • Independent Print Ltd
  • News Corp
  • News UK
  • Telegraph Media Group
  • Trinity Mirror
Media, Press 15 February 2017
Vodafone Q3 2016-17 results: Modest slowdown

Vodafone Europe’s mobile service revenue growth worsened to -0.6% from -0.2% in the previous quarter, the first deterioration following at least nine quarters of consecutive improvement, with the UK particularly weak

The company could nonetheless grow profits handsomely if revenue growth stabilises at this level, with more clarity on the medium term prospects for this likely to come with next quarter’s results and guidance for 2017/18

Our main concern continues to be the company’s declining subscriber share, particularly in consolidating markets where its historic advantages of having high market share may be rapidly eroded

 

  • Vodafone
Mobile, Telecoms, Vodafone 9 February 2017
Risks to UK consumer spend in 2017

The Bank of England predicts a mild decline of real household consumption growth to 2% in 2017, as higher inflation chews at disposable income

City forecasters are more circumspect on consumption growth, and we agree that households are likely to display more caution on expenditure relating to non-essentials

Retail sales, a bellwether for advertisers, look subdued in the New Year, and we maintain our forecast of flat advertising expenditure growth in 2017

Brexit, Media, Technology, Telecoms 8 February 2017
TalkTalk Group Q3 2016-17 results: Weak quarter, reassuring guidance

TalkTalk had a weak quarter, as was pre-warned, with the decline in the broadband base accelerating and consumer revenue growth of -6% slightly worse than the previous quarter

Guidance was however very bullish, with the company confident that it can bounce back to return to positive net adds in the March quarter, while still hitting its profitability guidance

This looks a difficult task in a market which is still highly competitive, but if it can achieve it, the longer term aim of a stable customer base and growing revenue and profits looks much more plausible

  • TalkTalk
  • Virgin Media
Fixed Line, Media, Mobile, Telecoms, UK Media 7 February 2017
Enterprise cloud on the horizon

Enterprise cloud computing democratises access to IT capacity ranging from specialised software to platforms to infrastructure, transforming cost structures in sectors like media and retail

Cloud enables unprecedented scalability of bandwidth for digital media services like Pokémon Go and Netflix, while also hosting the back-end for advertisers and retailers 

As the industry consolidates quickly, intense competition among Amazon, Microsoft and Google is delivering value to customers and boosting adoption

  • Amazon
  • Google
  • Microsoft
  • Netflix
Internet, Media, Technology 6 February 2017
Sky on track - H1 2017 results

Sky H1 2017 results are broadly in line with company guidance on revenues, costs and synergies given at the 2016 Investor Day 

The core focus since the formation of European Sky in November 2014 has been investment for growth in all sectors of the business (i.e. retail products, content offers and customer service), an approach that is beginning to bear fruit. Sky Italy had a notably “excellent” start to the year

Most eye-catching in the results release was the planned launch in fiscal 2018 of an IP alternative to Sky’s DTH service. That speaks volumes about the know-how Sky has accumulated over the last ten years in meeting customer demands and building customer relationships

  • Sky
Media, Telecoms, TV 3 February 2017
The Media Day 2016 - multi-tasking millennials and multi-media baby boomers

Ofcom’s 2016 Digital Day confirms a pronounced shift in media and communication habits of UK adults since 2014 towards mobile and online viewing of TV content.

Time spent on TV devices has proved robust in the digital transition thanks to internet platforms like Netflix and Amazon, along with older users’ attachment to linear TV.

The ascension of mobile at the expense of computer time is very marked due to changes in the home, and among the young, is driving multi-sourcing and multi-tasking.

Internet, Media, Music and Radio, Press, TV 3 February 2017
BT Q3 2016/17 results: Strong core, let down elsewhere

BT had a solid enough quarter, with revenue and EBITDA growth dipping due to pre-warned temporary factors, consumer continuing to outgrow business, and very solid operating trends evident, especially in high speed broadband and mobile

This has of course been entirely overshadowed by the profit warning, with prospective weaknesses in UK public sector and international corporate of far more concern than the contained, albeit surprising, accounting irregularities in Italy

BT has a large share of revenue and a much smaller share of profit from corporate/government data network/IT services, which are erratic in nature and arguably in long term decline in their current form, and without major changes they will continue to be so

  • BT
  • EE
Fixed Line, Non-UK Media, Non-UK Telecoms, Media, Mobile, Non UK Media, Technology, Telecoms, TV, UK Media 1 February 2017
Netflix at 10: still growing, still spending

Netflix celebrated the 10-year anniversary of its streaming service by posting its largest quarterly rate of subscriber growth, adding just over 7m new subscribers in Q4 2016, smashing its own forecast for the period of 5.2m

5.12m of the new subscribers were for its international services, attributed to acceptance of its growing suite of English language original programs. But growth is just as likely related to the bolstering of overseas offerings with acquired programming, after launching worldwide with relatively small libraries

While re-establishing confidence after a period of doubt when missing targets in Q2, challenges await; most notably concerns around net neutrality, diversifying content genres, and the open question as to how effectively original programming will be able to carry the service

  • Amazon
  • Netflix
Media 27 January 2017
Music Subscription Streaming

Streaming is now mainstream and we predict 113% growth in expenditure on subscriptions for 2015-18 in the top four markets (US, UK, Germany and France)

Free vs paid-for streaming is the central question for the music ecosystem: free yields fractions of pennies, making subscription the only credible business model

Market leader Spotify is facing competition from tech giants Amazon, Apple and Google, with deep pockets, for whom content is a pawn in a larger game

  • Amazon
  • Apple
  • Google
  • Spotify
  • Vivendi
  • YouTube
Media, Music and Radio, Technology 13 January 2017
TV set viewing trends: linear remains vital

Timeshift viewing on the TV set has doubled since 2010, mainly due to PVR adoption. This has compensated for about 40% of the decline in live viewing, which has fallen by 19% per person on average

Timeshifting habits are widely spread across all age groups. They are proportionately higher for the young, who watch much less live TV, but are still substantial among over-55s, whose total viewing has hardly changed since 2010

Large genre variations in the volume of timeshift viewing (dramas high, live events low), and the fact that this still occurs very soon after the live broadcast, underlines the strength of the linear schedule. And, despite widespread initial concerns that timeshift viewers would fast-forward through all ads, nearly 50% of timeshifted commercials are viewed

Media, TV, UK Media 10 January 2017
21st Century Fox and Sky seeking merger clearance

21st Century Fox and Sky plan to notify their proposed merger to the European Commission, perhaps by March, and obtain clearance on competition grounds, as rapidly as in 2010.

The merger could also face, along the lines of 2010, a separate regulatory process in the UK on media plurality grounds, by a decision of Secretary of State Karen Bradley.

If the UK process happens, Ofcom will provide its advice on the merger’s impact on news and current affairs, whose consumption has shifted massively online since 2010.

  • 21st Century Fox
  • Sky
  • Sky Deutschland
  • Sky Italia
Media, TV 21 December 2016
European mobile in Q3 2016: Nearly growing

European mobile service revenue growth recovered to nearly reach positive growth in Q3, improving a whole percentage point over the previous quarter to -0.2%

The main driver of the improvement was continued ‘more for more’ price increases combined with a lack of price wars at the lower end, although the current detente does not feel very stable. Furthermore, the pressure on growth from the general trend towards SIM-only and the consequent lower contract revenue looks unlikely to alter

Revenue growth of around zero as almost achieved this quarter is sufficient for the operators to grow the bottom line, but not to transform their network coverage in the style envisaged by 5G enthusiasts – more substantial growth is needed to cover the costs of such a step-change

  • EE
  • France Telecom
  • Hutchison 3G
  • Iliad
  • O2
  • Orange
  • SFR
  • Sky
  • Telecom Italia
  • Telefonica
  • Vodafone
Non-UK Telecoms, Mobile, Telecoms 20 December 2016
UK mobile market Q3 2016: Growth recovers, but challenges await

UK mobile service revenue growth improved in Q3 to -0.8% from -1.7% in the previous quarter, a welcome turnaround after three quarters of declining growth. Pricing remains firm, data volume growth remains robust, and some of the one-off factors affecting the previous quarter have dropped out

Sky Mobile soft-launched at the end of 2016, and it is taking an aggressive approach with a very deep MVNO technical model with substantial fixed costs, a high advertising budget and ambitious internal subscriber targets. To date the fixed MVNOs have not had a substantial impact on the MNOs, targeting a customer base that is non-core, but with SIM-only on the rise this may change

Looking at recently released network performance statistics, the impact of spectrum disparities is clear, with EE both able to offer faster speeds nationwide due to its large blocks of 4G spectrum, and offer much faster speeds in London. EE also has a lead in geographic coverage, and is planning to push its coverage much further, creating a challenge for the other operators to keep up

  • EE
  • Hutchison 3G
  • Liberty Global
  • O2
  • Ofcom
  • Sky
  • TalkTalk
  • Telefonica
  • Virgin Media
  • Vodafone
Mobile, Telecoms, UK Media, Vodafone 20 December 2016
TalkTalk Group Q2 2016/17 results: Growing profits, slowing revenue

TalkTalk’s broadband subscriber decline has re-accelerated, with retail weaker than wholesale, and its consumer revenue is declining at 6%. This is partly due to price change timings, partly due to last year’s cyber-attack, but also partly due to underlying weak retail broadband subscriber growth

EBITDA did grow strongly, although this was in part due to less subscriber growth. The new pricing plans will likely drive more short term revenue weakness, but could potentially drive lower churn in the medium term, and they have renewed TalkTalk’s price competitiveness, particularly on high speed products

Longer term, we still think that the company will find it challenging to stabilise its retail broadband base in the face of a slowing market and Virgin Media’s network extension, at least without significantly upping its marketing spend and sacrificing some margin

  • TalkTalk
Fixed Line, Telecoms, UK Media 16 December 2016
UK broadband, telephony and pay TV trends Q3 2016: Peak growth?

UK residential communications market revenue growth accelerated to 5.8% in Q3, from 5.0% in the previous quarter, helped by an overlapping price rise at BT, and supported by firm pricing and accelerating high speed adoption elsewhere

In contrast, volume growth in the core three products continues to slow, with little sign that this will ever re-accelerate. In the longer term we cannot see ARPU growth acceleration continuing to fully compensate, and market revenue growth might also have peaked

With Virgin Media’s continuing network extension and improving pay TV service putting pressure on the other operators, Sky and TalkTalk are protecting themselves by aggressively marketing high speed broadband. Correspondingly, this quarter marks the first time that Openreach’s high speed net adds were mostly derived outside of BT’s retail divisions

  • BT
  • Sky
  • TalkTalk
  • Virgin Media
Fixed Line, Telecoms, UK Media 16 December 2016
Internet Trends - Consumer behaviours driving market trends

As smartphone ownership nears saturation in almost all consumer groups, the base for the UK digital economy is widening: media consumption continues to move to connected devices and use of consumer services on mobile grows

Ecommerce is now responsible for 75% of retail growth, steady even during periods of decline for the overall market

Google and Facebook take up almost 90% of gross online advertising growth this year, and the ecommerce and mobile service markets show early signs of platform concentration

  • Amazon
  • Facebook
  • Google
Internet, Media, Mobile, Technology 13 December 2016

Pages