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Spotify is among the leading providers of legal online music streaming services in major European markets such as the UK, France and Spain. Entry to the US is rumoured and would make sense to establish the brand as a global one

As this report details, the commercial viability of the ad-supported ‘free’ service in a market that is five times the size of the UK will depend crucially on the royalty structures agreed by licensors, including recorded music companies and publishers

The Court of Appeal’s (CA) dismissal of Sky’s second attempt to overturn the Competition Commission’s (CC) decision that it must reduce its 17.9% shareholding in ITV to below 7.5% makes it increasingly probable that Sky will comply with the CC ruling at some point during 2010/2011

Although the CA’s dismissal of Sky’s appeal has always seemed the likely, even if never certain, outcome, the extra time consumed has so far benefited Sky greatly as the ITV share price has recovered from a low of below 20p in March 2009 to around 60p in January 2010

Sky’s share purchase was seen by ITV and others as unwanted interference in ITV’s affairs, but there was no suggestion of interference during the whole period of review by the competition and judicial authorities, while the outcome suggests that any future interest shown by other leading UK TV media players will probably also raise tough competition issues

Recent news flow – including Google UK’s Q4 2009 results and reports of facebook’s rapid revenue growth – points to a better than expected recovery in internet advertising. On a like-for-like basis, we estimate that online ad spend grew 2.2% last year to £3,425 million or 23.5% share of total advertising

We have raised our 2010 UK forecasts and now predict that Google’s UK gross revenue will grow 12.5% YoY, helping to drive online advertising spend up 7.6% to £3,685 million (excluding sites currently not reported by IABUK/PwC)

The economy remains an issue, with the potential impact of tax rises and cuts in Government spending in H2 threatening the already anaemic recovery. In our view, the balance of risk is still on the downside

Vodafone’s European revenue growth improved by 1.4 percentage points in the December 2009 quarter to reach -3.2%, the first improvement since the start of the economic slowdown in 2008

While data revenue is growing fast in absolute terms, its contribution to growth is flat to slightly down, with the main driver being more traditional services improving due to the recovery in year-on-year GDP growth

We expect revenue growth to continue to improve as economic comparables improve, with a return to positive growth likely by the end of 2010

VMed’s Q4 results were again strong; the May 2009 price increases continued to lift revenue and operating cash flow, as expected

There are continuing grounds for optimism, including further price hikes, cost reduction and modest turnarounds at Mobile and Business

There was no news regarding content M&A, but a sale some time this year appears likely and should have a significant positive impact on the company’s financial position

The switchover to digital television is well advanced in Europe – it is already completed in The Netherlands, Sweden and Germany (but not on cable) and will be over in all other large markets by 2012

This report presents a cross-country comparative assessment of TV platforms switching over and the emergence and adoption of new digital platforms, such as DTT, IPTV and free digital satellite

BT’s Q3 results and improved guidance for the year to March 2010 showed the current turnaround is well on track. But revenue continued to decline and improvements were concentrated at Global Services, the results for which were flattered by the dire prior year comparable

The UK business’s long term prospects also depend on successful deployment of next generation access, but this is over two years away

The results were overshadowed by the Pensions Regulator initially expressing ‘substantial concern’ over some features of the pension deficit valuation and recovery plan that the company has agreed with the trustees. Clarity on this is also some way off

Trinity Mirror (TM) has acquired Guardian Media Group’s (GMG) regional media business for £7.4 million cash, also releasing GMG from a £37.4 million liability print contract

The deal is the first significant consolidation play since the cyclical downturn that started in 2008 helped reduce local newspaper advertising by about 35% or £1 billion. TM is understood to have beaten private equity to the deal, signalling that consolidation activity in local media may be starting to warm up

While the price tag appears small for a business that generated £94.5 million in FY 2009, its operating profit had fallen to £0.5 million, and TM should be able to realise measurable local synergies and cost savings

The Conservative policy for broadband involves replacing
Labour’s proposed line rental tax with a portion of the TV licence fee, together with measures to encourage passive access to BT’s network and the use of alternative infrastructure

The policy sounds negative for BT, equivocal for VMed and
positive for Sky and TTG, but is unlikely to have a significant direct impact in the near term in the event of a Conservative government

We view as more significant the likely indirect impact on
Ofcom’s upcoming access market reviews. In the longer term, the development of alternative infrastructure could be significant, such as that already being deployed by Fibrecity in partnership with the water companies