Publications

Format: Apr 2018
Sector(s) Datesort ascending
Canal+ bursts into free TV

Advancing its free-to-air TV project, France’s Canal+ is to buy Bolloré TV’s national channels for €465 million to gain (scarce) licences for FTA terrestrial broadcast

Canal+ plans to leverage its library of original programming to attract upscale audiences, neglected by commercial rivals

However, the Vivendi investment case of a 9% return on capital is built on incompatible assumptions about profit margins and market share – to grow the latter in a mature market, a channel needs to sacrifice the former

  • TF1
  • Canal Plus
  • Vivendi
TV, Media 15 September 2011
UK internet travel market

This presentation details our assessment of the UK travel market to 2015, covering the package holiday, flight, accommodation and cruise sectors. UK consumer spending on holidays has been hit hard by the recession, but should bounce back as household finances recover, though the macro risk is still on the downside. We project that the internet will account for 60% of bookings by 2015, up from 45% in 2010, with growth fuelled by increased bargain hunting, as well as improving choice and functionality. Suppliers will continue to generate the lion’s share of internet sales, but online travel agents will take share, particularly for accommodation, which remains highly fragmented. New devices such as tablets and smartphones will increasingly be used to book and manage consumer travel, though the potential for incremental sales seems limited.

Internet, Media 14 September 2011
UK advertising growth slows to a crawl

Whilst UK GDP growth crawls along at a snail’s pace in 2011, (real) private consumption, its principal component, has been in sequential decline since Q4 2010, dragging consumer facing industries down

UK media are not equally affected. The internet continues to grow through search as well as display, but we expect TV NAR to be flat in 2011

Press advertising is worst affected by the downturn due to its exposure to retail advertising on top of the structural shift of classifieds to the internet

  • ITV
Music and Radio, Internet, TV, Media 7 September 2011
Sky Movies: the Competition Commission investigates

The provisional findings of the Competition Commission’s (CC) investigation into pay-TV echoed the conclusions of the Ofcom pay-TV investigation in April 2010, concluding that Sky’s control of pay-TV movie rights was having an adverse effect on competition

The big difference between the CC and Ofcom lies in the choice of remedy, with the CC preferring to explore a range of other options rather than proceed with Wholesale Must Offer, a solution that the CC sees as entrenching Sky’s market power rather than undermining it

The three remedial options that the CC has decided to explore present significant issues and it seems unlikely that a solution will be in place before 2014

  • Sky
TV, Media 22 August 2011
The mobile platform wars

In this report we outline the current state and likely development of the war between mobile platforms. We discuss installed bases and activity levels, the key issues facing Apple and Android, including Android fragmentation and Google's acquisition of Motorola, and go on to look at the tablet market and the outlook for RIM, Nokia and Windows Phone.

  • Nokia
  • Google
  • Microsoft
  • Apple
Mobile, Telecoms, Technology, Media 18 August 2011
UK classified advertising 2011

UK classified advertising in print and digital media fell -9% in 2010 to £2.76 billion, and we expect a further decline of -7% in 2011.

Our annual review and outlook concerns the classified advertising categories of recruitment, property, autos (used) and directories, across all media. We assess the continuing structural shift from print formats to less expensive digital media, in the context of prolonged recessionary pressures on local economies in the UK (bar London), which have reduced annual transaction volumes in 2010 by -28% in recruitment, -45% in property and just -16% in used cars, in relation to the peak in 2007.

A key development in recent quarters has been the rapid adoption of smartphones and tablets as emerging platforms for classified advertising by the industries serving them. Consumers are enjoying the additional benefits of on-the-move data (e.g. in the forecourts of auto dealers) and instantaneous updates (e.g. for property rentals), which advertisers are keen to exploit, providing additional revenue opportunities for classified media. B2B classified platforms also monetise integrated brand and listings solutions, plus marketplace tools. New models are evolving that will have implications for other media and in some cases, industry supply chains.

  • DMGT
Internet, Media 18 August 2011
Mobile revenue growth and outlook Q2 2011: MTR cuts hit but stable underlying

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

  • Vodafone
  • Virgin Media
  • Telefonica
  • T-Mobile
  • SFR
  • Orange
  • O2
  • Hutchison 3G
  • Google
  • France Telecom
  • EE
  • Apple
Mobile, Telecoms 15 August 2011
UK broadband and telephony trends: Summer 2011

In this presentation we show our analysis of trends in UK broadband and telephony to June 2011, based on the published results of the major service providers. This quarter’s edition includes a first look at high speed broadband subscriber volumes, and our analysis of broadband growth in 2010 based on data recently released by Ofcom.

Highlights for the year 2010 include confirmation of our earlier estimate of a sharp increase in residential subscriber growth, and, despite this, the first ever decline in revenue from residential broadband, due to aggressive pricing of broadband/telephony bundles.

Highlights for the 2011 June quarter include broadband subscribers breaching the 20 million mark, a further decline in broadband market growth, continuing strong broadband subscriber growth at BSkyB and BT Retail, the first ever quarterly declines in cable broadband subscribers and LLU lines, and the first increase in BT Wholesale broadband net additions for four and a half years.

  • Virgin Media
  • TalkTalk
  • Sky
  • Orange
  • O2
  • BT
Fixed Line, Telecoms 14 August 2011
H3G H1 2011 results: UK strengthens, Italy weakens

After strong underlying improvements in growth and profitability in 2010, in H1 2011 H3G Europe’s service revenue growth was steady at 3% and margins only slightly improved to (underlying) EBIT breakeven

In the UK, service revenue growth accelerated to 7% (from -1% in H2 2010), with EBIT maintained at about breakeven, as the UK company’s ongoing strong contract subscriber growth fed through

Italy suffered roughly the opposite fate, with service revenue growth falling to -8%, as its recent subscriber losses fed through, and EBIT remained firmly negative

  • Vodafone
  • Hutchison 3G
  • Carphone Warehouse
  • EE
Mobile, Telecoms 8 August 2011
Starting the transformation: ITV interim 2011 results

ITV reported strong year-on-year growth in profits in H1 2011, enabling a substantial reduction of net debt and putting the company in a stronger position to invest in growth as it pursues its five year transformation plan

Important to longer term success, ITV Family share of viewing has held up, and ITV looks well placed to expand its market share of TV NAR (Net Advertising Revenue) over the next two years, albeit in an uncertain and challenging economic environment

Early signs of creative revival at ITV Studios are most encouraging, while online poses the toughest challenges, yet remains important because of the fundamental interactive synergies between online and broadcast television

  • ITV
TV, Media 4 August 2011
BT Q1 2011/12 results: marking time

BT reported another quarter of strong growth in broadband volume, helped by high competitor churn and accelerating take up of the Infinity high speed broadband service

But broadband volume growth did not feed through to financial performance at BT Retail, Global Services remained stuck in low gear and BT Wholesale performance weakened further

The company should make its guidance for the year to March, but evidence that it will do more than the minimum remains elusive

  • BT
Fixed Line, Telecoms 2 August 2011
Sky FY 2011 results: excellent year of delivery

Fiscal 2011 was a vintage year for Sky, which reported a 23% growth in operating profit and 51% increase in free cash flow as it started to reap the full benefits of its investment in multi-product growth

Q4 2011 showed signs that tougher economic conditions are starting to bite, although the sharp fall in TV product additions was balanced by a fourth consecutive bumper quarter in home communications, in which Sky outperformed the rest of the market

Strong focus on operating efficiencies and product innovation combined with big investment in UK originated content should position the company well as competitive pressures build in the medium- to long-term, at the same time as allowing continuing strong profit growth

  • Sky
  • News Corp
  • Canal Plus
Fixed Line, Telecoms, TV, Media 1 August 2011
UK video-on-demand forecasts to 2015

This presentation details our assessment of the UK prospects for video-on-demand advertising through to 2015, covering through-the-middle and over-the-top services

While video-on-demand consumption is set to grow strongly, particularly to the TV, linear broadcast services, supported by PVR timeshift, will continue to account for over 90% of viewing to the TV and PC/ tablet over the next five years. As a result, we forecast that VOD advertising will equate to 7% of TV NAR by 2015, with current high prices for in-stream video ads falling as it becomes more integrated with TV airtime sales

Internet, TV, Media 1 August 2011
Carphone Warehouse Q1 2011/12 results: weak start to the year

CPW Europe had a weak first quarter, with like-for-like revenue growth of -3.3%, with all of the drop coming from the 18 to 24 month contract length shift in the UK

We expect its performance to improve through the rest of its fiscal year, but it will need to in order to hit even the bottom end of its full year guidance

The US mobile retailing operation is doing much better, with very strong revenue growth, and is likely again to exceed full year guidance

  • Google
  • Carphone Warehouse
  • Apple
Mobile, Telecoms, Technology 27 July 2011
Virgin Media Q2 2011 results: resilient but with limits

VMed’s Q2 results were respectable, but quirky, with resilient underlying revenue and strong cash flow, but exceptionally weak cable volumes

Virgin Mobile is performing better than ever, but steam continues to seep from the cable cash flow boiler

A TiVo push and further progress at Virgin Media Business are still to come, but we expect a trend of gradual decline in fundamental cash flow growth

  • Virgin Media
Fixed Line, Mobile, Telecoms, Internet, TV, Media 27 July 2011
Vodafone June quarter 2011 results: Spain continues to drag

Vodafone Europe’s service revenue growth dropped by 0.5ppts to -1.3% in the June quarter, although most of this was due to a sharp MTR cut in the UK

Revenue in Spain was very weak due to a price re-adjustment, but trends elsewhere were broadly positive, with voice minutes growth improving overall

Medium term prospects are good, with MTR cuts fading, competitive performance improving and data growth likely to re-accelerate, but we expect declining growth in Turkey to drive a worse performance in the short term

  • Vodafone
  • Orange
Mobile, Telecoms 24 July 2011
UK press and News International: what next?

Trinity Mirror, Northern & Shell and DMGT helped the market more or less offset the absence of the News of the World, though impressive volumes have come at a price

More generally, newspaper circulations have a temporary reprieve, as strong newsflow but also discounts and marketing techniques have been deployed to attract readers

What happens next at News International, and also competitor responses, could soon change market dynamics again

  • News Corp
  • DMGT
Media 21 July 2011
The regulation of news

The uncovering of criminal behaviour at one newspaper (so far) has led to a much broader review of how the press is regulated, seeking to put a stop to dishonest and unethical behaviour, legal or illegal, and touching on ownership, ethics and on the freedom of the press in general

However, much of investigative journalism relies on activities that are certainly dishonest and arguably open to prosecution: any new code and enforcement will need to rely on judgement and selectivity, not prescription

Statutory, compulsory, enforceable regulation of the press will risk running into the sand in a world in which casual chat between friends is viewable by millions on social networks and celebrity gossip is sent to pixel in Los Angeles or São Paulo, not Wapping

  • News Corp
  • Guardian Media Group
  • DMGT
Media 20 July 2011
UK consumer e-commerce trends

Our first report on UK consumer e-commerce covers the largest e-tailing market in Europe. Although the share of e-commerce in UK retail sales is just below 10%, the influence of online is much wider, including reducing shop trips (along with superstore and mall development), which rising fuel costs are bound to intensify as a trend. In the context of the consumer recession that started in Q4 2010, bargain-hunting online has again become a more important driver of consumer interest in consumer e-commerce. Retail sales value and volume data reveal that online retailers are delivering low prices to consumers, in contrast to offline retailing, where consumers face price inflation. As e-commerce grows its share of mind in a converged internet experience, the pressure on offline retailing will intensify, driving out weaker retailers; we think superstore and mall retailing will fare better than the high street, as consistent with a single trip to access a larger choice of goods/outlets (London being the exception). In electricals, the leading online category in the UK (ahead of food and clothing), specialist retailers are suffering the most from the consumer recession and the pressure of online on prices and margins.

Internet, Media 20 July 2011
UK residential high speed broadband outlook: leading the horse to water

BT’s plans to deploy next generation access, combined with state-aided rural broadband projects, look set to give almost three quarters of UK households access to high speed broadband by 2016

New wireless technology is a feasible substitute for wireline for some low-end users and in specific areas, but we do not expect it to have a major impact on high speed broadband deployment

BT Retail and Virgin Media will in effect move significant numbers of their customers onto high speed broadband, but without significant price reductions we believe that, even by 2016, consumers’ reluctance to pay more will result in two-thirds of households remaining on lower speed options

  • Virgin Media
  • TalkTalk
  • Sky
  • Orange
  • O2
  • BT
  • EE
Fixed Line, Telecoms, Internet, Media 19 July 2011

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