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“He has been experiencing decreasing interest rates for 15 years,” Francois Godard, an analyst at Enders Analysis Ltd, said of Drahi. “He is one of the most in debt, in terms of Ebitda ratios. It’s complex. We’ll see if he was swimming naked.”
After a brutal start to 2022 – losing subscribers to rival streamers, cutting off Russian viewers and facing streamer exhaustion – Netflix has been adding subs and needs to keep going to pay off its still sizeable debts. 7.7 million more people signed up in the last three months of 2022, which suggests the Harry and Meghan documentary was far from commercial suicide.
Which matters, as Tom Harrington at Enders Analysis points out, Netflix is in the attention economy and “Netflix wants to be where you see the most talked about content in the world.”
Ad-blocking also embodies the concept of a ratchet effect, said Joseph Teasdale, the head of tech at the media research firm Enders Analysis. Once a user adopts the software, they rarely abandon it, Teasdale explained, meaning every new convert shifts the balance of power in a nearly irreversible manner.
“The FBI itself sent out a public service announcement in December advising people to install an ad-blocker,” Teasdale said. “When you have stuff like that, how can you blame people for wanting to protect their privacy?”
"The worries about Chinese influence through the parent company are harder to put to bed," Jamie MacEwan, senior media analyst at Enders Analysis, told Insider.
"So long as ByteDance is the owner, it will be difficult to convince politicians that managers in Beijing are not exercising undue operational control, or accessing sensitive data, whatever internal measures have been put in place," added MacEwan.
He added "The worry for TikTok is if bipartisan momentum can be sustained in Congress: that would be more dangerous for the app than Trump's volley of executive orders in 2020, which were rushed and straightforward to overturn on legal grounds."
These plans for European consolidation seem subject to a domino effect across the regulatory landscape. Combined with the French decision, this latest rejection “has sealed the future of an RTL/ProSieben merger,” says François Godard, Senior Media and Telecoms Analyst at Enders Analysis. “For RTL, the ultimate catch was consolidation in Germany. This was fatally wounded by the failure of the merger in France. I don’t think that a success in the Netherlands would have changed that.”
“Bertelsmann/RTL were already rethinking their approach,” adds Godard. “Their underlying analysis of the impact of the digital platforms is right, they must devise a new strategy in response.”
Analyst Francois Godard says that after the setbacks, Bertelsmann will "take a deep breath and come back with an action plan." One cannot criticize Thomas Rabe for remaining stuck in the past. "RTL has thought ahead more than most other private broadcasters in Europe when it comes to digital challenges ." Such an approach is necessary in a disruptive market.
This week it sold its Newbury HQ and will lease back part of the campus. But as Karen Egan, head of mobile at Enders Analysis, points out: 'Vodafone is a bit of a tanker – it will take some time to turn around.'
Egan says: 'Other operators like Orange and 02 seem hungrier.'
She added that anyone backing Vodafone should be ready for another share price reverse, if the new CEO makes a debut statement, 'kitchen-sinking' all the company's shortcomings. But she is more sanguine about the dividend, saying: 'It may seem to some the sort of dividend that could be cut. But in my view it is sustainable as the big calls on Vodafone's cash are past.'
High inflation ahead of wage increases and higher interest rates are combining to provoke a mild recession in real consumption expenditure in 2023. Consumers are sustaining spend to a degree by depleting their financial firepower, promising a mild recovery in 2024.
UK display advertising will again lag consumption growth in 2023. Online display is growing much slower after a giddy two years. Incumbents are challenged, particularly for higher-funnel spend, but the long-term fundamentals remain: economy and society are moving online.
While TV revenue will decline in 2023, its effectiveness for advertisers ensures it is well placed to benefit from any recovery. Digital revenues will see growth this year.
