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Rigorous Fearless Independent

Jamie said TikTok “has huge usage in America but up until the coronavirus, a much younger demographic and so it wasn't seen as such an established entity, To me, that seems more relevant because ByteDance is actually an enormous entity that people in America and the UK aren't familiar with, they just see TikTok,” says McGowan Stuart. “Actually ByteDance owns Douyin and a suite of other products. There's much more scope for Mayer being involved in a global expansion of those sorts of things.”

He added that "Now it's a case of establishing themselves internationally and moving on from virality into something more sustainable,”

For an unproven service to attract 1.3 million active users in its first five weeks is impressive. But by its own account, Quibi’s launch underwhelmed.

Sizeable subscriber targets—7 million by year one and 16 million by year three—justify a level of spend never seen in short-form video, but are ambitious for an experimental start-up with limited brand equity.

The service’s failure to recognise the social side of mobile media, restricted use case and, critically, lack of a hit show increased scepticism of product/market fit. Now Quibi must adapt the product with knowledge of user preferences and reassess its targets, provided it can afford to do so.

Jamie said “Yes, the coronavirus is a problem for a service whose use case is massively restricted now. It's selling point pre-launch was on-the-go consumption. But at the same time, there are more existential problems with Quibi as a whole.”

He added “The asocial nature of the app as a whole was a problem given the content is only consumable on a mobile device, and mobile is inherently social. If you look at TikTok, so much of its early growth and exposure and awareness of it came from repackaged TikTok videos on other social media platforms. That's very important for the growth of a burgeoning service.”

Douglas said Different titles reach their sustainability threshold at different volumes. Niche publications, especially, can thrive at smaller publishing companies. “It is easier for a tiny company to run a magazine at a small profit than it is within the framework of a corporate enterprise.” The previously independent Rock Sound was bought by the small publishing company Syon Media earlier this year. The only difference it’s made, says brand director Andy Biddulph, “is that there’s no bailout – we live and die by what we create and can monetise."

Tom said “We don’t know when it’s going to recover and we don’t know when people are going to be able to sit next to each other again. It’s not going to be like flicking a switch and people will just go out sit side by side in theatres and cinemas.”

He added “Cinemas are obviously going to take a massive hit from the pandemic but at the same time you’re going to have all these streaming services that are largely unaffected. Amazon is probably better off as a result of the coronavirus, elsewhere Netflix had an amazing quarter last quarter and the next is going to be even better. Basically the only place you can release a film right now is direct to the consumer digitally.”

Vodafone’s financial metrics appear to be slowly ticking up and it is making some progress in narrowing its performance gap to peers. Signs that it may be moving away from a discount-led convergence strategy in Germany are very positive.

Organic EBITDA growth is highly flattered by one-off items and, as is frequently the case, even this headline EBITDA growth for FY20 is wiped out by currency depreciation in ‘Rest of World’ countries.

This lack of real progress on EBITDA and FCF and the muted outlook for both exacerbates Vodafone’s tight leverage position. There seems very little prospect of it unsettling the O2/Virgin Media JV in the UK.
 

Sky posted understandably weak results for Q1, amid the ongoing COVID-19 crisis. Revenue fell by 3.7% year-on-year, with most sports subscriptions on pause and advertising markets in shock.

The company has guided to a 60% fall in EBITDA over the next two quarters, as it bears the extra costs of a very condensed sporting schedule, but much will depend on what level of rebate it negotiates from the rightsowners for the disruption.

On screen, Sky faces similar production issues to other broadcasters, but it has continued to enhance its platform gatekeeper role and strong content offering, most recently by integrating Disney+.