Revenues and profits continue to crash at the directory giant as local and small business expenditure shifts to cheaper online media
We believe Yell’s challenges may be less about share of voice, and more about how to absorb the pace of structural change – and to operate its business effectively from a much lower top-line
Tough conditions in all territories – UK, US, Spain and Latin America – have accelerated structural change, but Yell has some advantages over the start-ups, search algorithms and social networks that surround it
The digital transition is almost complete in France, five years after the launch of DTT. After undergoing an audience share decline, TF1's share is stabilising. In contrast, M6 improved its audience share during the transition. Both groups are likely to remain dominant in the FTA TV market, thanks to the partial withdrawal of public TV from advertising sales
The advertising recovery in 2010 was strong. Thanks to its diversification, M6 is less exposed to the cycle than TF1, which is rebounding more strongly. M6 is also structurally more profitable
Pay-TV platform growth has stalled, with subscription decline at Canal+ somewhat balanced by growth of low cost packages of IPTV providers. Canal+ will benefit from the withdrawal of Orange from premium TV and a new distribution deal with Orange. Combined with the roll out of new set-tops with PVRs, we are moderately optimistic on Canal+ prospects
We forecast UK online advertising to grow by 8% CAGR to £5.1 billion by 2014, representing approx. 33% of total advertising spend, overtaking press
Search is the main growth engine, which we predict will reach £3.1 billion in 2014, due to its appeal and value to advertisers as a sales and lead generation tool
Growth in spend on social media and video networks will push online display to just over £1 billion by 2014; whilst classifieds will grow to £840 million
To encourage investors, TF1 announced continued diversification of group revenues from reliance on the flagship TF1 channel, and an increase in group Ebitda from 16% in 2007 to 20% in ‘4-5 years’. Accelerating audience share decline at the TF1 channel indicates that new programming is also urgently required to maintain TF1’s ‘premium’ for advertisers
Yell announced this week that full year sales growth (to March 2008) in its UK operations would be 2%, sharply down from the previously forecast 3%, due to “toughening market conditions” since the start of 2008
Rumours that Google was acquiring Yell emerged at the end of last week, but we doubt the search giant would be interested in purchasing a traditional media company, particularly not one predominantly in print
After two quarters that have fallen short of earlier guidance, TF1 Q3 results have at last met more subdued investor expectations of marginal growth in flagship TF1 channel advertising revenues in a total market expected to increase by about 4.5% in 2007, chiefly due to digital growth
Yell UK is the dominant supplier of Classified Advertising Directory Services (CDAS) in the UK. Its principal competitor is BT but, as a natural monopoly, it is regulated, and has just undergone a sector review lifting the price caps currently in place. What does the future now hold for Yell, and more generally for CDAS, which has been the only growth sector in print classified advertising since 2004?
TF1, France’s leading free-to-air (FTA) terrestrial broadcaster, has repositioned its channel assets in order to better exploit rapid growth of digital TV, now taken by 44% of households
Television's old world of analogue scarcity produced a clutch of big names in free-to-air (FTA) commercial broadcasting: ITV1, TF1, Mediaset, RTL and Sat.1/Pro7 being among the most prominent in Europe - companies grown rich and powerful through advertising demand and lack of competition. Today, they face the common challenge of making a successful transition into the new world of digital plenty. Can they prosper? Or must they disappear like dinosaurs in a whirl of audience fragmentation, ad avoidance, on demand, downloading, video-streaming, convergence, piracy and whatever else the future holds?
The new UK management team, led by former Energis CEO John Pluthero, still has the opportunity to improve C&W UK’s longer-term position
Rapid implementation of a Next Generation Network to cut costs and refocusing Bulldog remain critical