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Meta suffered its first year-on-year revenue decline in Q2, as long-standing challenges crystalise and an economic slowdown in the US dents display ad spend.
In response, Meta is retooling its products to neutralise threats from post-social competitors like TikTok, and trying to minimise the impact of data restrictions.
The long-term pivot to the metaverse is Zuckerberg's next big bet, but funding it depends on core business strength.
Julian Aquilina, Senior TV Analyst at Enders Analysis, points out that younger people could end up watching broadcaster-produced content without realising it. “If they’re not in the habit of going to the BBC or ITV as their first port of call, but instead they’re defaulting to Netflix or YouTube and seeing what is being recommended, then that’s a cause of concern for broadcasters."
“There are certain genres which are going to lend themselves better to the live broadcast TV experience, and that will continue into the future,” continues Aquilina. “So yes, the broadcasters are probably going to lose more audiences over time, but there’s always going to be a base level which people need to go to broadcast TV for their viewing.”
Market revenue growth continued to accelerate in Q2 to reach 3%, but broadband growth worryingly dipped as the lockdown boost waned.
Differing pricing dynamics (among other factors) led to very different outcomes for the main players, with BT’s growth surging to 7% while VMO2’s revenue stayed in decline.
Underlying trends of weakening broadband growth, keener pricing and customer bargain seeking point to slower growth ahead … until the next price increase.
Revenue decline accelerated in Q2 as the cost-of-living crisis appears to be impacting UK sales, but profits remained strong thanks to last summer’s Continental sports rights reset
In Italy, DAZN will return on Sky’s platform just in time for the new Serie A football season, filling a key gap in its aggregation strategy
Looking forward, thanks to its enhanced profitability, Sky has the flexibility to respond to the economic downturn using pricing and content
Joseph said the changes were “fairly minor product updates designed to keep WhatsApp competitive”.
He added: “Mark Zuckerberg seems to be trying to return to the founder-led tech startup model of placing huge, bold bets on the future. The question now is, how easy is it to make those big bets work when you're not talking about a nimble startup, but a $500bn behemoth?”
Douglas said “These magazines are very strongly in that position because that is their heritage. It’s almost like the market has shaped themselves around the product they have been running for a long time."
Claire said “The streamer bubble is well and truly burst,” says Enders. “The Netflix share price drop has been the harbinger of all of these phenomena — the Wall Street people don’t believe in it anymore.”
She added that that there is no more room in the top tier, which comprises Netflix, Disney+ and Amazon Prime Video.
“They will keep open the possibility of launching in these other European markets. When they see that they build up a big audience on pay TV for ‘House of Dragons,’ for instance, and the other spinoffs, they’ll see that has perpetuated the value."
