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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.

 

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A report from Enders Analysis has argued that generative artificial intelligence “will not alter the fundamental commercial reality for the news” as the shift online did previously.

The research firm cautioned publishers to be “realistic” about the productivity and revenue gains possible from AI, but added that ignoring AI would be “a mistake”.

The report found there have been some valuable uses for AI in the newsroom — but argued that there may not be an “immediate, killer news use case to raise revenues”.

AI can also help to create “more sophisticated metadata for archival material”, they wrote, in turn making it easier for journalists and readers to access a publisher’s back catalogue. This could have revenue implications for local publishers in particular, they said, “where some historical material has barely been digitised”.

“Increased regulatory pressure could be behind this new publisher push,” said Niamh Burns, senior research analyst in tech and media at Enders Analysis. “From TikTok’s perspective, it helps to have fact-checked, informative news publisher content on TikTok to counter any narrative around disinformation or platform bias.”

But as she pointed out, publishers don’t make money on TikTok, at least not yet. “Until this improves it’ll remain an arms-length relationship for a lot of publishers,” Burns added. “TikTok isn’t a referral channel, and publishers need to balance getting their brand in front of young people with the risk of getting lost in the content mix.”

This was mainly driven by rising interest costs, which account for more than 100pc of alt-nets’ turnover on average, according to figures from Enders Analysis.

Enders said the tie-up could help CityFibre win market share from BT and Virgin Media O2 but warned there were limited wholesale prospects for smaller alt-nets.

The amount of money raised so far this year is barely enough to cover losses and interest charges – let alone to fund continued network expansion, Enders said.

UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.

Sky and Canal+ have tied down key contracts until towards the end of the decade, while DAZN now has domestic rights for four of the top five European football leagues.

Tech players want live sport, but have distinctive demands and without new monetisation models they will not challenge pay-TV incumbents.

The UK altnets collectively lost over £1bn in 2023, with most metrics unrealistically distant from what they need to be for a sustainable model, particularly the smaller retail-focused operators.

Consolidation is essential for survival, and CityFibre at least has a reasonable case for long term sustainability with a wholesale model and Sky as a customer, and looks the most viable altnet consolidator in our view, with VMO2/nexfibre able to pick up the pieces should the sector fail.

A lack of long-term viability and related financing difficulties will dramatically slow network roll-out, reducing the altnet pressure on the rest of the sector even if consolidation improves penetration levels.

“There is the question about how much publishers are using these tools themselves,” said Niamh Burns, senior research analyst at Enders Analysis. “I think the amount of deployment is low, there is a lot of experimenting out there, but I could see a world where publishers will use some of these tools a lot. However, publishers must be realistic about the scale of efficiencies and revenue generation opportunities.”

Burns said that so far the willingness of publishers to use AI tools that directly impact or create editorial content related to how commercially pressured the media environment was for that operator.

“I do think that those media companies that are most commercially at risk in the near term are also at risk of overdoing it,” said Burns.

“A lot of that is to do with commercial models. If you rely on advertising from lots of traffic on social platforms and all you need is scale, not necessarily quality, then AI could be seen to really help.

We analysed hundreds of ads on YouTube, the biggest online video platform. Direct response campaigns predominate, especially among finance, ecommerce and technology buyers.

YouTube on TV hosts more brand campaigns with unskippable >30-second ads. In the UK, YouTube viewing on the TV set will grow c.80% by 2030, changing the profile of YouTube advertising.

YouTube generates about 85% of its revenue from ads. We found it also guides user behaviour by ramping up ad load for logged-out users so that they log in.