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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.

 

Rigorous Fearless Independent

Microsoft and Google are both incorporating AI-powered chatbots into their core search offering. This will create a better user experience for some search categories earlier in the customer journey.

Search is a huge prize, bigger than TV advertising, and AI represents the biggest potential shakeup to that market since the rise of mobile. With ~95% market share outside China, Google's risk is to the downside.

Search is an early, but not the most natural, home for conversational AI: Microsoft and Google have also announced integrations into productivity software. Expect a wide range of services to be transformed by AI integrations as startups and tech giants alike seek share in newly contestable markets.

“What the Times has done so well with its games strategy to date is that it replicates some of the habit friendly elements of that traditional newspaper experience,” said Joseph Teasdale, head of tech at Enders Analysis. “Everyone gets the same experience around these games on a daily rhythm.”

He added “That’s the other thing about these games the Times is focused on, they’re super cheap. It’s a great return on investment when it comes to subscriber metrics and revenue. That calculation works really well compared to actually developing what people might think a game looks like nowadays.”

VMO2 and CityFibre are reportedly holding merger talks, which would bring together by far the two largest fibre builders competing with Openreach.

On a conventional altnet acquisition assessment, CityFibre is an attractive target given its scale, but a very expensive one at a full price given the degree of overlap.

The acquisition might still be attractive given the opportunity to take out a wholesale competitor but, for this same reason, regulatory clearance would be very tough.

Market revenue growth slowed to under 1% in Q4, driven by consumers economising in tough times through re-contracting and dropping add-ons.

Early 2023 is likely to be worse, with growth likely to turn negative again in Q1, again driven by ARPU with volumes more robust.

April price increases will give at least a temporary boost, but need to be managed very sensitively to avoid reputational damage and churn.

“I think Comcast overpaid for Sky and fantasized on very thin pan-European synergies and growth potential [but] selling a continental unit would not bring much cash in but it would send a signal to the stock market that they are serious about restructuring,” Enders Analysis analyst Francois Godard tells The Hollywood Reporter. Pointing to Sky Italia’s largely successful rollout of broadband services in Italy, Godard called the division “a solid asset. [So] why sell it at a discounted price?….I have seen no indication that Sky Italy would be up for sale. They are investing in telecoms, a long-term growth strategy consistent with the Comcast approach in the US and with Sky in the U.K.”

Sky’s Germany unit, which does not have a strong telecom or broadband component, looks more vulnerable.

Like Parker, Joseph Teasdale, head of tech at Enders Analysis, is mostly sanguine about the prospects of GPT-4. “I’m optimistic that new AI tools will help make the process of workshopping ideas, drafting and editing smoother and more productive, letting creatives focus on what they do best: creating,” he says. But, there could still be detracting elements to the technology, adds Teasdale.

“If I have a worry, it’s for the marketing industries, where I don’t think the ability to produce unlimited copy will make us clearer communicators,” he says. “I can see a world where we’re all getting AI to produce longform prose out of bullet points, only for audiences to use that same AI to condense it back down to bullet points to make it readable. Hopefully the absurdity of that situation will force us to answer the question: do we need all this generic text?”

“Those guidelines were manifestly never reflected in the contract, nor probably those of the other many freelancers on BBC Sport,” says Alice Enders, director of research at Enders Analysis. Had the BBC fired him, she notes, the network would have been liable to pay out Lineker’s contract in full. 

“What seems clear is that the BBC does not want [Lineker] to criticize sitting members of the government,” Enders says. “And the past five years have shown how nasty and vicious some of those politicians can be and how much they would like the BBC’s license fee to disappear in a puff of smoke so they can fully occupy the airwaves with their own opinionated shows.”