In an audacious move to minimise the risk of mobile social disruption, Facebook is to acquire leading messaging app Whatsapp for up to $19 billion, or $42 per user, or 11% of Facebook’s current market cap
Messaging platforms are becoming the new social media, particularly for younger demographics, and while Facebook/WhatsApp will be huge in mobile, other services could still side-step into Facebook’s territory
The price for WhatsApp may be justifiable to counter the threat, but Facebook has only bought one of many, and paying a full price may encourage the others; expensively buying every competitor does not feel like a long-term strategy
While VMO2’s Q1 results were strong, its subscriber additions were weak, particularly on the broadband side, with a seemingly somewhat deliberate go-slow as the year began, but cost-of-living crisis and fibre overbuild may also be factors.
We see considerable scope to ramp up commercial aggression from here given the sizeable tailwinds from price increases, synergy benefits and the migration of the Virgin Mobile MVNO from Vodafone.
We remain sceptical of VMO2’s further network extension ambitions and hope that no news on securing a financial partner is good news, increasing the odds of it pursuing the less risky strategy of expanding its footprint through wholesale.
ITV met advertising expectations in Q1, matching the forecast 16% YoY increase in total ad revenue (TAR) (£468 million), while Studios (+23%, £458 million) bolted well above pre-pandemic levels. We assume, however, that Q1 was blessed in terms of the timing of programme deliveries
The amalgamation of ITV's three domestic digital services, ITVX, is on track to launch in Q4, with a bulked-up library, clearer strategy, and new features: perhaps arriving right on time to take on Netflix's ad-supported tier
The proposed Media Bill includes a couple of potential benefits for ITV, such as expanded prominence on connected devices and major online platforms, including on smart TVs, set-top boxes and streaming sticks, along with the possibility of a remit more aligned with the modern media landscape—however details around execution are currently lacking