Enders Analysis provides a subscription research service covering the media, entertainment, mobile and fixed telecommunications industries in Europe, with a special focus on new technologies and media.
Our research is independent and evidence-based, covering all sides of the market: consumers, leading companies, industry trends, forecasts and public policy & regulation. A complete list of our research can be found here.
Tom Harrington was quoted in an article on Amazon offering live television channels on its video platform for the first time in Europe as the US technology group steps up its push into broadcasting and ramps up its competition with traditional networks. "It makes sense for both parties,” says Tom Harrington of Enders Analysis. “If more people are watching Horse and Country through Amazon then they are more likely to buy more saddles through Amazon.”
TalkTalk managed to return to retail on-net broadband subscriber growth in the March quarter after years of decline, but at the expense of missing their EBITDA target for the year
They have stated a determination to grow the base going forward, but have admitted that this requires a rebasing of their EBITDA to spend the necessary amount on marketing, and guided to an EBITDA drop in the 2017/18 year
This looks much more realistic than their previous plans, but will in itself generate even more competitive intensity in the UK broadband market, which is already squeezed given the market volume slowdown and Virgin Media network extension
2016 was another good year for UKTV, with appreciable growth in revenue and linear viewing share; a trajectory the product of a sensitive pay/free balance of its channels, investment in productive EPG slots and development of its original programming suite.
Recent deals with both Sky and Channel 4 will go some way to providing financial stability, allowing UKTV to invest with more certainty in new content and encouraging further development of its online proposition.
UKTV Play has underperformed, chiefly due to a lack of content. But with plans to significantly ramp up both its offering and marketing spend, it may well unlock further audiences; specifically targeting elusive 16-34 year-olds.
Virgin Media has run into network roll-out difficulties, having to revise down its previously stated homes passed figures and not committing to a full year 2017 target, with the current build run rate well below that required to hit its medium-term targets
Operating results were a little mixed, with ARPU showing signs of continued discounting and market-wide competitive pressures, and churn was higher than the previous year, but net adds were strong, RGUs stronger, and UK consumer cable revenue growth is still over 4%
Slower Project Lightning roll-out and weaker ARPU growth points to slower revenue growth during 2017 than might otherwise have been expected, but Virgin Media still has relatively strong prospects in a toughening market
A partial — if seductively persuasive and impressive — data framework for online advertising combined with short-term incentives have encouraged a dramatic shift in the ratio of brand to activation advertising from 60:40 to 50:50, depressing the pricing of display media
Mounting evidence suggests a focus on quick returns and cheap media at all costs is hurting marketing effectiveness, measured in long-term Return-on-Investment, brand equity and consumer satisfaction
Guarding against this risk requires brand-focused advertisers to create more space for long-term judgement for CMOs, and to refocus agency remuneration towards planning and creative work
Douglas McCabe was quoted in an article on the Guardian strategy - the move towards charging online readers represents a major shift for a group that had been almost evangelical about offering its digital journalism for free. But the Guardian has been forced to rethink its strategy after arguably the biggest crisis in its near 200-year history hit last year, when a sharp drop in print advertising compounded disappointing digital ad revenue. Now the Guardian is relying on reader’s support to stave off crisis. However, analysts say that unless losses are reduced and new revenue streams found, the Guardian will quickly find itself in the same predicament. Douglas said “the scale of the fund and the core Guardian objective of achieving sustainability should not be intertwined. In some ways the bigger the fund the more the business is culturally inclined to accept colossal trading losses”.
The launch of BBC Studios - the relocation of most of the broadcaster's in-house production capability into a commercial subsidiary - gives it the ability to compete for work elsewhere at the expense of a guaranteed quota at the BBC
The upside is large, with the opportunity to retain an increased amount of intellectual property, a requirement of growing importance. However, so is the risk, with sustainability dependent upon a major cultural shift; from comfortably retained provider to competitive production engine
Outside of a weak track record when competing for work, other entwined issues must be overcome for success in the medium term; demonstration of transparency in the commissioning process and watertight transfer pricing practices, and the dispelling of state aid concerns
Douglas McCabe was quoted in an article on a broader change in the media industry - publishers are turning their back on the social network. Many publishers have concluded that the expected deluge of digital advertising is unlikely to materialise. Last year roughly 89% of the growth in digital ad spending in Britain was soaked up by just two companies, Google and Facebook, according to figures from Enders Analysis. Douglas said “the idea that digital advertising was going to be this great wave of money to save the new industry is now being seen for what it is: a complete illusion”. A spate of recent controversies, from “fake news” to the YouTube extremist content advertising scandal, has opened a route to salvation — and it looks very much like the business model that has sustained the news industry in the past. YouTube’s inability, and for a while unwillingness, to remove ads appearing next to extremist content and hate speech have given advertisers pause. Douglas said: “advertisers are slowly but surely coming back to the idea of trying to reach quality audiences in quality environments. It’s come full circle.”
Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today.
Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTTonly homes is set to increase by 13% by 2026.
The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV— which are of greater appeal to younger audiences.