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A Netomnia-Nexfibre combination would create an 8mn-home fibre network. BT’s Openreach serves nearly 25mn homes with fibre broadband, while its retail division has 30 per cent market share, according to estimates from Enders Analysis.
“The financial community has begun to recognise creators as proper businesses,” says Ben Woods, head of creator economy at Enders Analysis.
The deal would mark the first move towards consolidation in the broadband industry, which has come under mounting pressure from higher interest rates on its rising debt levels, which stand at more than £9bn, according to Enders Analysis.
Recent deals for Ligue 1, the FIFA Club World Cup and Foxtel signal DAZN is focused on global expansion, but this has postponed group breakeven.
Rights have been renewed at lower costs due to tepid competition and wider uncertainty in the broadcasting landscape, which support its improving margins.
Global scale may be a competitive advantage, but DAZN must still prove that global synergies improve local economics and generate a positive margin.
The cost of building out networks has left the lossmaking “altnets” saddled with over £9bn in net debt, according to calculations by Enders Analysis. Some providers, such as London’s G.Network, have fallen into administration, while lenders to others have been forced to write down the value of their debts.
“The crucial difference between these deals is that TalkTalk is a proven failed-firm situation, with it having been publicly for sale for at least the past four years but with no credible buyer,” said Karen Egan, head of telecoms at Enders Analysis.
Although YouTube’s total viewing in the home is flat year on year, it continues to strengthen on the TV set: this is driven more by older users than a transfer of viewing from devices.
YouTube has become a clear destination service on the TV for younger audiences—who are more likely to go directly to the app and stay for longer—while older viewers tend to channel-surf before switching to YouTube.
TV growth appears to be stoking the communality of the service: YouTube’s co-viewing minutes overtake solo during prime time, mirroring traditional viewing behaviour associated with broadcasters and SVODs.
Enders Analysis has identified Virgin Media O2 and CityFibre as leading consolidators, as several heavily indebted fibre networks struggle to win sufficient business to justify high investment levels.
“The overarching problem is the amount of long-form content people watch is going down,” Tom Harrington, head of television at Enders Analysis, said. “If the whole thing is shrinking … then that’s a challenge for every broadcaster and streamer.”
Skydance has a net debt of roughly $80bn, or around seven times its profits. That is almost three times higher than the 2.5x level normally associated with the industry, according to Enders Analysis.