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Douglas McCabe was quoted in an article on the fall in newspaper display advertising and the discussions that are under way between media companies to explore ways they can set aside differences and work together to address the alarming drop in advertising revenue. Douglas Said "The implications are clear: while print advertising has been in a state of secular decline for over a decade the structural forces underpinning this decline have moved up several gears."
UK digital advertising will grow beyond £10 billion by 2018 by our estimates, representing more than half of all advertising spend and delivering the most advanced large advertising market in the world on a per capita basis.
Nevertheless, we see critical issues in digital marketing that are frequently acknowledged, but hard to fix.
At the heart of our hypothesis is the view that the marketing industry – brands, agencies and media – has focused on technology and efficiencies at the expense of consumer experience and distinctiveness.
Douglas McCabe was quoted in an article on the creation of “24: The North’s National” newspaper. The family-owned publisher behind 24 said it would aim to take a northern slant on national news and would be available only in Cumbria, Northumberland and parts of southern Scotland and Lancashire, avoiding big cities where competition is fierce. Douglas said there was a market for northern news. But while CN Group had kept costs to a minimum, there was still a risk. Adding that “they are trying to recapture a market that has switched habits. People no longer go into a newsagent every morning and pick up a newspaper. You are asking people to switch back and that is very hard.”
TV viewing has one reliable, long term trend: programme genres are watched by consumers at predictable life stages and ages
At a high level, there has been little manipulation of the balance of genres being broadcast. But amongst the sub-genres, editorial optimisation has resulted in an uptick in actual viewing
As the core viewing age of linear television rises, there is an opportunity for broadcasters to leverage this to create the most desirable schedule for their available audience by daypart; with genres that transcend demographics when younger viewers tune in
The award of the match packages in the 2017-21 domestic football rights auction in Germany is probably optimal for Sky (within the “no single buyer” constraint): it will broadcast about eight out of nine weekly fixtures including the top picks, while Eurosport’s package is complementary to Sky’s rather than substitutional
Sky will, however, pay a hefty price, with the new contract costing 80% more than the current one – although the new Bundesliga rights value is not out of line with other Continental leagues
We expect Sky’s German operations to briefly break even in fiscal 2017 before falling back into losses with a return to profit if other costs are kept under control. Management has made a bold statement of self-confidence: building scale is the priority
Douglas McCabe was quoted in an article on Time Out, the magazine company founded in London in 1968, which has raised £90m ahead of a listing on London’s junior stock market. Time Out is also taking steps to boost its online advertising revenue - Liberum has forecast that Time Out’s digital revenues will increase from £11.7m in 2015 to £38.4m in 2018. Douglas warned that investors would need to take a “leap of faith” to bet that the company’s growth rate would increase so rapidly in the years ahead. He said Time Out’s editorial expertise could help it stand out from its many online rivals, but added that “the question is whether Time Out’s content is compelling enough to get to a big enough scale”.
The decline in print display advertising in national newspapers accelerated to -16% in 2015, while growth in digital advertising is slowing, and will be unable to offset revenue decline for the foreseeable future.
We believe this decline is structural and irreversible, continuing at a sharper pace than before despite the recovery in the UK economy in 2013-2015, and very different from the cyclical decline of 2009.
Publishers must convince brands and agencies that in the mobile era their superior content environments have added value. If scale newsrooms are to survive, costs must be reduced through collaboration and outsourcing.
Europe's Creative Hubs 2016 was commissioned by Bertelsmann and produced by Enders Analysis.
UK residential communications market revenue growth dipped down 2ppts to 4% in Q1 2016, due in roughly equal measure to slowing broadband growth, some one-off benefits in the previous quarter dropping out, and generally weak ARPU likely caused by promotional introductory price discounting
Virgin Media was the only major operator to buck the market trend and accelerate broadband growth, helped by its network extension Project Lightning, and this impact will grow throughout 2016, with the remaining operators squeezed between this and the slowing market
Growth in the rest of the year will be impacted by pricing decisions yet to be made, and slowing volumes could well drive market revenue growth below 4% during the year, but we do not expect it to drop very much below this