Publications

Format: Nov 2018
sort descending Sector(s) Date
Update on BSkyB forecasts

All the recent attention to BSkyB has had to do with the proposed News Corporation takeover and its impact on the share price. For the BSkyB business itself, we think the troubles of News International have so far had very little effect, as there is nothing to link the pay-TV operator Sky directly with the News of the World, the epicentre of the current judicial and political storm. Nothing, that is, apart from the Murdoch factor, which certainly seemed to do no harm to sales of the final News of the World edition on Sunday 10 July which topped 4.5 million.

In our view a bigger concern for BSkyB is the impact of the current squeeze on consumer spending. This may best explain the press release of 8 July, which announced both the launch of Sky Go as an added TV Anywhere extra to Sky customers at no extra cost to their existing packages and the freezing of package prices until 31 August 2012.

  • Sky
  • News Corp
Fixed Line, Telecoms, TV, Media 11 July 2011
Update on KPN’s fibre roll-out

In The Netherlands, KPN faces strong competitive pressure on voice and broadband from cable operators historically addressing subscription TV services due to their superior fibre/coax networks – KPN needs to upgrade its ADSL network to increase IPTV coverage and bandwidth to compete effectively on the triple play

KPN is pursuing a multi-technology approach to its network upgrade, deploying VDSL over the existing copper access network as a ‘transitional’ solution, accompanied by deployment of FTTC and FTTH. Currently, 13% of Dutch homes are passed by fibre, with KPN setting a ‘medium term’ coverage target of 30-60% of households

KPN says that FTTC and FTTH trial results show material increases in ARPU and market share, supporting the case for deployment. KPN is assuming entirely the costs of FTTC, but the investment in more expensive FTTH is being made by joint venture KPN-Reggefiber, whose need for finance in mid-2010 will require it to convince debt markets of its business plan for FTTH

Telecoms, Fixed Line, Non-UK Telecoms 22 December 2009
US and UK TV ad markets - apples and pears

The US is seeing steep decline in measured TV viewing by younger age-groups and rapid increase in digital media adspend, prompting fears about the future of TV ad revenues across the major broadcasters and cable networks. The UK has seen similar trends, prompting suggestions that it will see similar effects

However, comparison of US and UK TV ad revenue trends since 2000 shows big differences in the underlying growth rates after taking economic factors into account. These undermine the inference that the decline in viewing and rise in digital adspend will have similar effects on either side of the Atlantic

Examination of the US and UK TV ad markets further points to big differences across a raft of major variables relating to supply and airtime trading practice, such as can be expected to yield very different outcomes with respect to TV ad revenue growth

  • 21st Century Fox
  • Channel 4
  • Discovery
  • Five
  • ITV
  • NBCUniversal International
  • Turner
  • Viacom
Non-UK Media, Media, TV, UK Media 7 May 2015
US and UK: Cord-cutting-shaving-nevering

Cord-cutting has become a major headache for US pay-TV operators in the last three years, while cable network channels face further erosion due to cord-shaving and we now see a rapidly growing population of cord-nevering households that have never taken a pay-TV subscription  

Should we expect it to be only a matter of time for the UK to follow the US? The short answer is no, due to major differences in the pay-TV market infrastructures of the two countries, which leave the UK much less exposed

However, downward pressures from the online space do exist in both countries, while the big cord-cutting-shaving-nevering threat we now see in the UK has most of all to do with the chill Brexit winds on the economy

  • BBC
  • Channel 4
  • ITV
  • Netflix
  • Ofcom
  • Sky
  • TalkTalk
  • Virgin Media
Media, Non UK Media, UK Media 12 August 2016
US department stores, Amazon, and omnichannel fashion retail

Amazon is finding women’s fashion, a missing piece of its household-centric model, a tougher nut to crack than downmarket apparel

Higher-end US department stores are pushing back with an omnichannel model, emphasising long-term partnerships, a clever full-price/outlet model, and experiences which cross the online-offline divide

In apparel, Amazon and big box retailers have already triumphed over lower-tier American department stores, and even prestigious fashion brands are finding it harder and harder to refuse cooperation with the giants

  • Amazon
  • Facebook
  • Google
Media, Mobile, Technology 25 October 2018
US digital music sales in 2006

US digital music sales continue to perform well, despite press reports to the contrary, with the average weekly volume of tracks sold up 75% in 2006, supported by steady sales of iPods

Media, Music and Radio, Non-UK Media 21 December 2006
US entertainment groups and consolidation

US entertainment groups have enjoyed strong revenue growth thanks to pay-TV, subscription video-on-demand and international sales, despite headwinds on the advertising market and downward pressures on retail pay-TV prices

Media merger and acquisitions have mainly failed, but strengthening the hand of the content producers in relation to distribution channels remains relevant and arguably even more important due to the sheer financial and audience size of digital operators, although the studios' pricing power remains unchallenged

21st Century Fox could then justify a new bid for Time Warner, although it will struggle to address TW's objections to the previous offer without taking on a huge pile of debt

  • 21st Century Fox
  • Turner
Media 27 November 2015
US ISPs hail the end of online privacy rules

The Federal Communications Commission’s Privacy Order (FCC) was overturned by the Senate, clearing the way for ISPs to ramp up consumer data-driven advertising revenue

While Google and Facebook dominate digital advertising in the US as in other markets, the US is alone in removing regulatory barriers to ISPs taking a piece of the pie

US ISPs now have a self-regulatory regime for consumer rights on transparency, security and data breaches; but in the UK and EU, privacy advocates prefer enforceable rights

  • Cable & Wireless
  • Facebook
  • Google
Internet, Media, Mobile, Telecoms 9 October 2017
US mechanical rates outcome – the status quo prevails

The Copyright Royalty Board ruling issued on 2nd October gives the US music industry certainty on the statutory mechanical royalty rates payable to music publishers for 2008-2012

Media, Music and Radio, Non-UK Media 11 October 2008
US music publishers reach royalty agreements

US music publishers have reached agreement on rolling over the mechanical royalties due on sales of digital and physical music formats for 2013-17

The expanded scope of the statute to cover ‘scan and match’ cloud locker services, such as Apple’s iTunes Match, provides incremental revenues to music publishers; the unlicensed ‘storage’ cloud locker services are not concerned

ASCAP’s agreement on US radio performance royalties will however reduce music publisher revenues

  • Vivendi
Media, Music and Radio, Non-UK Media 24 April 2012
US music publishing 2014-17

The US music publishing market, worth $2.2 billion in 2013, is poised for moderate CAGR of 2.5% in the period 2014-17, thanks to performance royalty growth from broadcast and new media uses, offsetting flat mechanicals as the physical-to-digital transition in recorded music continues to place pressure on this revenue line

ASCAP and BMI, the performance rights organisations, have been engaged in an intense period of litigation against Pandora, the popular ad-supported streaming service with around 80 million users, in which Pandora has prevailed

ASCAP and BMI have also sought to loosen the consent decree regime in place since 1941 and overseen by the Department of Justice in order to enable "market-driven" rates, but this effort also looks set to fail in light of the firm opposition of all classes of licensees

  • Bertelsmann
  • Vivendi
Media, Music and Radio 11 May 2015
US music publishing royalties for 2018-22

The “fair return” to US music publishers and songwriters for rights used by interactive streaming services will be decided in 2017 by the Copyright Royalty Board (CRB)

Rights owners want to switch to a fixed per-stream or per-user rate on all tiers, arguing music has an inherent value. Apple is asking for a much lower per-stream rate

Amazon, Google, Spotify and Pandora warn of disruption to free and ad-supported tiers if the revenue-share tariff is not rolled over, and the CRB could side with them

  • Amazon
  • Apple
  • Bertelsmann
  • Sony
  • Spotify
  • Vivendi
  • YouTube
Media, Music and Radio 8 June 2017
US Q3 handset sales: 80% smart, 41% iPhone

In Q3 the ‘big four’ US mobile operators sold 22.6m phones to retail contract customers (90% of the market): 80% were smartphones and 41% were iPhones The iPhone has had close to 50% of US smartphone sales every quarter since December 2011, when Sprint began selling the iPhone, and shows no sign of weakness US iPhone sales are supported by a market pricing structure that masks the iPhone’s price premium

  • Apple
Mobile, Telecoms, Technology 9 November 2012
US recorded music bumps along in 2013

US recorded music retail sales fell 5% in 2013 to $5.5 billion on a bruising 17% decline in physical sales and a sharp slow-down in digital growth

DTO retail sales slipped for the first time in 2013, a trend that continued in Q1 2014. On a brighter note, the leap from 3.4 to 6.1 million subscribers makes the US the top market for the format

At the wholesale level, the fall in revenues from B2C sales was entirely offset by the rise in B2B revenues from ad-supported music where usage is booming – in 2013, B2B contributed 16% of wholesale revenues of $4.5 billion

Telecoms, Music and Radio, Media 15 April 2014
US recorded music gets some mojo

The US recorded music market (at retail level) touched bottom in 2012 on strong digital sales and adoption of digital subscription services, and will grow in 2013 The industry’s licensing revenues in 2012 were also boosted by much higher performance revenues collected by SoundExchange from digital radio services such as webcaster Pandora and satellite provider Sirius XM The margin enhancing effect of an improved sales mix as the physical to digital transition proceeds to a licensing model is mirrored in the results of Warner Music Group, which also includes a music publishing segment

Non-UK Media, Music and Radio, Media 26 February 2013
Used car marketing outlook

This is the third and final report in our annual review of vertical marketplaces (classifieds), focused on used cars, and follows Vertical marketplaces overview and recruitment outlook [2015-115] and Property marketing outlook [2015-116]. Auto Trader has long been the leading platform in cars – this was true in print, and the business is the greatest example of digital transition from print to digital we have seen anywhere in the world. Auto Trader was successfully IPO’d in 2015. The timing was good as the used car market is buoyant with many young cars coming to market following a period of intense new car purchasing, which was fuelled by attractive financing. Could Auto Trader be squeezed by the combination of specialist services Pistonheads and What Car? (Haymarket) at the top of the market, and Gumtree at the bottom? There is limited evidence of this to date, and AutoTrader is moving up the value chain, albeit without fundamentally diversifying its revenue model. The opportunities for growth from declining print revenue will shrink, however, and there is some downside risk for the market as a whole if car oversupply, driven by a decline in the number of used car buyers, become more accentuated.

Internet, Media 18 December 2015
UTV and SMG merger could revive commercial radio sector

The prospect of a merger between Scottish Media Group (SMG) and UTV (formerly Ulster Television) provides exactly the positive news the commercial radio sector needs at this time. The merger would bring together two national stations, Virgin Radio and TalkSport, under the same ownership, creating opportunities to increase these stations’ audiences, grow their revenue yields, and improve profitability whilst, at the same time, reducing operational costs by combining their management and sales functions.

  • SMG
Media 29 August 2006
Value in volumes: Books, midlists and retail

There are signs of hollowing-out in the book trade: a lack of disruption at the top line obscures the fact that mid-selling breakthrough titles are becoming rarer, debuting authors is becoming more difficult and loyalty is declining

Publisher tools to overcome these trends are weakening, while self-publishing has introduced fierce competition in price, if not yet quality

To fight the tide, publishers will need to concentrate on the remaining points of differentiation, as well as preserving dedicated retail channels and changing conceptions around reader relations

Internet, Media, Technology 26 March 2018
Valuing Chrysalis music publishing assets

Chrysalis, the music publishing company, is for sale and expressions of interest have been received from EMI Music Publishing, Warner Chappell, SonyATV as well as a small number of private equity companies, with final bids due this week

Media, Music and Radio 24 January 2008
Valuing Premier League Football Rights

The FA Premier League Limited has set a deadline of 14:00 on Thursday 27th April 2006 for receiving bids for live televised Premier League (PL) rights under the new three-year contract due to start with the 2007/08 football season. BSkyB is everyone's favourite to win at least four out of the six packages of 23 games up for auction, but probably the maximum best-looking five under the new rules that will not allow total exclusivity. Valuing Premier League Football Rights [2006-11] addresses the question of how much BSkyB may have to bid in order to win.

The combined NTL/Telewest occupies the centre ground of the triple play space in the UK. It has long provided the triple play of TV, telephony and broadband and is now the largest ISP in the UK. However, it has historically been constrained by high prices and poor customer service.

Media 10 April 2006

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