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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

Brexit has not noticeably depressed advertising spend in 2016, as consumer spend is buoyant, fueled by borrowing and lower savings. Yet, businesses are being cautious as uncertainty weighs on the future rules of trade with the EU

We forecast total advertising spend to rise by 0.6% at constant prices in 2017, almost entirely due to digital growth, which is expanding the total advertising market. Its share has soared from 1% in 2000 and looks likely to hit 50% in 2017

Up to now digital growth has always been at the expense of print and not television, but this could just be changing as mobile increasingly holds centre stage for the consumer

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

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 [2016-116] and Property classified marketplace [2016-119]. Auto Trader continues to dominate online auto listings, accounting for 85% of UK revenues in 2015 by our estimates as total UK online auto spend increased 13%.  We believe that growth will slow to -7% this year and low single digits in 2017/18 as Brexit bites and consumer confidence retreats, although used and new car sales have so far remained buoyant since the vote. In common with the other classified verticals we see a period of sustained innovation on the horizon which will challenge the existing market leaders; data provision rather than audience listings will likely become the main source of value to advertisers while further out the advent of autonomous vehicles promises to disrupt the established structure of the entire auto industry.

Pay access now predominates in print-rooted national digital news across Europe, with meters the most popular model. Reliance on digital advertising is retreating. Best of class Continental publishers have roughly stabilised revenue, and the risk of print ad decline acceleration looms – as in the UK

Digital is still typically below 20% of revenue as online advertising CPMs decrease and newsstand buyers are reluctant to migrate to digital subscriptions – on current trends digital revenues will be insufficient to sustain a full-scale newsroom

Emerging innovations include aggregation, bundling (with broadcast, music, telecoms), and youth-skewed spin offs, but execution is uneven. Profitable native digital news sites provide templates for focused coverage at a fraction of traditional newspapers’ costs