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.
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James Barford was quoted in The Times on UK broadband speeds following Ofcom's "Connected Nations 2016" report. James said "If you look at comparable countries such as France, Germany, Italy and Spain, we are doing extremely well. We have the fastest broadband speeds, the widest availability of superfast speeds and among the lowest prices", but added more could be done.
UK residential communications market revenue growth accelerated to 5.8% in Q3, from 5.0% in the previous quarter, helped by an overlapping price rise at BT, and supported by firm pricing and accelerating high speed adoption elsewhere
In contrast, volume growth in the core three products continues to slow, with little sign that this will ever re-accelerate. In the longer term we cannot see ARPU growth acceleration continuing to fully compensate, and market revenue growth might also have peaked
With Virgin Media’s continuing network extension and improving pay TV service putting pressure on the other operators, Sky and TalkTalk are protecting themselves by aggressively marketing high speed broadband. Correspondingly, this quarter marks the first time that Openreach’s high speed net adds were mostly derived outside of BT’s retail divisions
TalkTalk’s broadband subscriber decline has re-accelerated, with retail weaker than wholesale, and its consumer revenue is declining at 6%. This is partly due to price change timings, partly due to last year’s cyber-attack, but also partly due to underlying weak retail broadband subscriber growth
EBITDA did grow strongly, although this was in part due to less subscriber growth. The new pricing plans will likely drive more short term revenue weakness, but could potentially drive lower churn in the medium term, and they have renewed TalkTalk’s price competitiveness, particularly on high speed products
Longer term, we still think that the company will find it challenging to stabilise its retail broadband base in the face of a slowing market and Virgin Media’s network extension, at least without significantly upping its marketing spend and sacrificing some margin
Francois Godard was quoted in an article on Vincent Bolloré’s intent on creating a southern European powerhouse in media and content, and Vivendi's Mediaset stakebuilding is another step towards that goal. Bolloré’s move on Italian broadcaster Mediaset has all the hallmarks of tactics honed over four decades of dealmaking: aggressiveness, audacity and creeping control. Francois said “it’s typical Bolloré. It’s very bold, it’s not a straightforward bid to buy a company and he’s obviously betting on dissent among the Berlusconi family.”
Brexit has not noticeably depressed advertising spend in 2016, as consumer spend is buoyant, fueled by borrowing and lower savings. Yet, businesses are being cautious as uncertainty weighs on the future rules of trade with the EU
We forecast total advertising spend to rise by 0.6% at constant prices in 2017, almost entirely due to digital growth, which is expanding the total advertising market. Its share has soared from 1% in 2000 and looks likely to hit 50% in 2017
Up to now digital growth has always been at the expense of print and not television, but this could just be changing as mobile increasingly holds centre stage for the consumer
As smartphone ownership nears saturation in almost all consumer groups, the base for the UK digital economy is widening: media consumption continues to move to connected devices and use of consumer services on mobile grows
Ecommerce is now responsible for 75% of retail growth, steady even during periods of decline for the overall market
Google and Facebook take up almost 90% of gross online advertising growth this year, and the ecommerce and mobile service markets show early signs of platform concentration
Claire Enders was interviewed on BBC Radio4’s Today Programme on 21st Century Fox takeover of Sky. Claire said “I think it’s very likely that even if there is a plurality investigation that this will go through, and it will go either very fast – i.e. it will be concluded within six months because there is no plurality investigation, or it will take another few months after that, so it will conclude, say, within a year. It is a different situation, and the entities have been structured differently. And, of course, Rupert Murdoch is no longer at the fore of managing any of these entities.”
Claire Enders was quoted in an article on Rupert Murdoch’s latest move to seize full control of Sky. Murdoch has played the long game in calculating that the UK political and media landscape has been transformed in the five years since he previously tried to acquire the British broadcaster. Claire said "the entities involved are substantially different. Yes, the Murdoch family is still in control but the role of the family has changed”.
This is the third and final report in our annual review of vertical marketplaces (classifieds), focused on used cars, and follows Vertical marketplaces overview and recruitment outlook [2016-116] and Property classified marketplace [2016-119]. Auto Trader continues to dominate online auto listings, accounting for 85% of UK revenues in 2015 by our estimates as total UK online auto spend increased 13%. We believe that growth will slow to -7% this year and low single digits in 2017/18 as Brexit bites and consumer confidence retreats, although used and new car sales have so far remained buoyant since the vote. In common with the other classified verticals we see a period of sustained innovation on the horizon which will challenge the existing market leaders; data provision rather than audience listings will likely become the main source of value to advertisers while further out the advent of autonomous vehicles promises to disrupt the established structure of the entire auto industry.