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EE and Vodafone have both launched premium consumer services using 5G+ network slicing, a welcome shift away from a hitherto price-focused market.
Pricing is aimed at driving ARPU up, directly but also indirectly by making premium brands and bundles more compelling, and shrinking the pricing gap to discounted channels.
Educating consumers about the importance of network quality is a challenging but important step. Business and CNI tiers offer a less exciting but clearer route to value.
“TV can potentially help Vodafone’s broadband appeal to more people and help reduce churn because having a TV product creates a more differentiated experience,” said James Barford, head of telecoms research at Enders Analysis. “Once somebody’s got used to the TV product and enjoys it, they’re less likely to leave purely for price reasons.”
Unlike BT and Virgin Media O2, Vodafone does not own the fixed networks it relies on, instead paying providers including Openreach and CityFibre for access. Average revenue per user also remains low as internet operators compete heavily on price, meaning broadband is “marginally profitable at best, perhaps even slightly lossmaking”, said Barford.
“The TV add-on gives benefits to Vodafone broadband,” said Barford. “But then you may ask, well, what benefit does Vodafone broadband give Vodafone? And maybe strategically, it’s a good defensive move.”
Asked by the session moderator, Enders Analysis' managing director for telecoms, Karen Egan, whether CityFibre can't be considered to have the scale needed, he was unconvinced. While stating CityFibre's network footprint reaches roughly 4.5 million homes, "we would, with that deal, offer three times of that," Schüler said.
Instagram is a $100 billion, top-three global ads business that is fast becoming Meta’s leading platform in core ad markets as Facebook faces user tipping points across the UK, US and Western Europe.
Reels capture over half of user time, making Instagram an enormous creator as well as brand platform. Instagram must decide whether to join YouTube, Netflix and Disney on the creator escalator as professional content providers seek greater rewards.
Meta’s ads war chest dwarfs YouTube’s. Unlocking it would mean giving up precious margin, so Instagram will have to make tough choices and innovate. We expect announcements at Meta Connect on how content is surfaced on Instagram, on distribution across devices, and on targeted rewards for longer formats.
“Like all traditional media outlets facing platforms, and despite approximately 40% of its revenue already being generated digitally, Channel 4 is experiencing an advertising climate made all the more difficult by the suffering economy," explains Claire Enders, an industry specialist. “It needs to downsize.”
Enders Analysis published a report in May on Channel 4 titled Time for Reset, which said that a £69m drop in the broadcaster’s cash reserves to £49m at the end of last year marked their lowest level in more than 20 years.
Broadcasters deliver significant societal value in Europe, but face challenges, competing for viewers and advertising against global players (streamers/VSPs/social media platforms) with different economic models.
Broadcasters’ advertising revenue is plateauing, with growth in the video ad market driven by the tech giants. Global platforms own vast video inventory and proprietary advertising stacks.
Broadcaster collaboration and consolidation is required. However, content access/prominence on platforms and advertising market definitions must be reviewed with regulatory imbalances redressed.
Residents balked at the short notice, the inability to choose their own internet provider and the price. Average entry-level broadband prices in the UK are about £25 a month, according to Enders Analysis.
BT’s annual TV customer growth is now about 4 per cent, while heavily indebted Virgin Media O2’s TV customer base is declining by roughly 4 per cent a year, according to estimates from Enders Analysis. Sky does not publish any TV customer figures.
“These types of packages can appeal to certain types of broadband customers who want the simplicity of bundled services [without paying for] the full Sky bundle,” said James Barford, director of telecoms at Enders Analysis, who cited the growth of BT’s TV business, EE TV, as evidence.