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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An article discussing the challenges facing Tony Hall, the new Director General of the BBC, quoted Claire Enders. “Rebuilding the public’s trust is going to be Lord Hall’s top priority,” she said. “If he can increase the public’s publicly-stated trust in the BBC, he will find it much easier to get a 1, 2 or 3 per cent increase in the licence fee through parliament.”
UK recorded music retail sales fell 8% in 2012 to £1 billion, as CD sales fell 21% to £540 million whilst digital formats rose 15% to £484 million on a huge 70% climb in subscriptions.
HMV store closures in 2013 will further dent CD sales, but accelerate the point of inflection (at least 50% digital sales) of the UK’s retail market.
The UK remains a robust source of royalties from performance of sound recordings, with PPL reporting revenues in 2011 of £153.5 million, up 7%.
Next-generation consoles from Sony and Microsoft, expected late this year/early next, will kick off a new cycle for the games industry, but enter a much more competitive market
Smartphones and tablets offer an alternative gaming model, with more variety, lower cost, greater convenience and, crucially, rapidly increasing sophistication
These new platforms are expanding gaming to a much larger audience, but also increasingly competing with consoles for the time and attention of core gamers. This could be the last recognisable console cycle
German unbundlers are in decline, unable to match cable for price or bandwidth, or to invest in new fibre networks. Vodafone, the second largest unbundler, must choose between consolidating and divesting Merging with Kabel Deutschland would deliver fixed line synergies – with high execution risks. But, based on the French and Spanish experiences, we doubt that a quad play strategy (synonymous with a price war) would generate value Mobile operators’ fixed line ventures are also in decline elsewhere in Europe, but cable is not always to blame, with pure play fixed line altnets also tending to outperform them, suggesting that genuine cross-selling advantages are marginal at best
Netflix continues to expand its global base on foundations that look slightly less shaky than a year ago as the establishment shows signs of becoming more positive to the upstart in its midst
There has been much talk of the OTT cord cutting threat to pay-TV platforms, yet the real threat lies more with certain broadcast TV channels, especially those specialising in children’s and archive entertainment series
Still, the Netflix brag that it releases the public from the managed dissatisfaction of traditional TV with instantly available drama series like House of Cards is definitely over-the-top and we anticipate niche impact in the UK
Sky Deutschland is reaping the benefits of its re-launch using BSkyB’s model, with an improving content offering and quality of user experience, plus a favourable environment for household consumption in Germany.
2012 results came in very close to our forecasts and we predict that Sky Deutschland will break even at EBITDA level in 2013 and turn cash flow positive in 2015.
The competitive context is benign and the horizon is clear until the next Bundesliga auction in 2016. But, in the meantime, cable, IPTV, FTA and OTT players are committed to widening their pay offers, which may put pressure on Sky’s subscriber growth and content costs.
Last week Samsung updated its flagship Galaxy S smartphone with a solid incremental upgrade that will cement its dominance of the high-end of Android, helped by a $14.7bn marketing budget and wide distribution
Impact will be strongest on other Android OEMs: the preceding S3 was heavily outsold by the iPhone and the new model is unlikely to change this, with similar design and positioning
Samsung’s launch event found room for a tap-dancing child and a live orchestra, but Google and Android were invisible. Samsung is clearly trying to relegate Android to a commodity and make its own brand dominant
Major European mobile operators were downbeat, with mobile revenue growth in Europe still massively underperforming the US, and their (misplaced in our view) anger at the OTT players being channelled into promoting new mobile OSs to compete with both Apple and Android
Samsung is cementing its dominance, while the other branded players focus on flagship models to try to cut through the noise. Meanwhile the flood of Android from Chinese OEM/ODMs is growing, at increasingly good quality. All other mobile platforms appear increasingly marginal
Superficially the handset industry appears to be stabilising around Apple, Android, and Samsung, plus the Chinese long tail. However, Apple, Google/Moto and perhaps Amazon may well all have disruptive moves planned for this year
Highlights of 2012, which saw double digit EBITA growth for the third year running, included ITV outperformance of the advertising market, strong organic growth in ITV Studios and a large increase in Online, Pay & Interactive revenues The outlook for 2013 suggests that EBITA could see double digit growth for the fourth year running. This is due to a number of factors that may include the bonus of extra NAR as BT launches BT Sport in the summer, arguably the biggest TV media event in recent years For the longer term, two key challenges in the Broadcast & Online sector are the retention of the ITV main channel audience share in an increasingly converged digital landscape and ITV’s ability to grow its online presence and drive new revenue streams