DMGT prepares to end its tenure as a plc, as the Rothermere family finalise a takeprivate offer of £2.9 billion (c. 18.8x EBITDA) and make a swathe of new appointments as it seeks to reconfigure the business

The Daily Mail newspaper is the crown jewel in the company’s assets, as the wider portfolio has recentred around consumer media

The road ahead is still foggy, with a rickety bridge between its print and online brands—a strategic risk for DMGT, yet also a key opportunity in UK media

 

Overall radio listening remains robust and continues to make up the majority of audio time, however a worrying decline in both reach and hours amongst younger people makes further innovation necessary

Shifting audio distribution trends driven by digital and IP listening, as well as the increasing influence of smart speakers and connected devices, represent significant challenges for the radio industry going forward

Strong collaboration and regulatory support will be needed to reconnect with elusive younger listeners, prevent US tech companies from becoming de-facto gatekeepers, and preserve the public value at the core of the UK radio industry

The UK print media sector is facing escalating input cost inflation. Newsprint prices are 50% higher year on year in Q4 2021, noting that prices in 2020 were exceptionally low on soft demand. Based on 2019 rates, prices could be 25% higher in H1 2022. The squeeze on margins for print could destabilise the economics of supply overall

Newsprint inflation is being caused by soaring costs of recycled feedstock, exacerbated by the monopoly of a single supplying mill in the UK after years of attrition. Imports remain substantial, but impaired by the EU-wide crisis in the supply of paper products, alongside bottlenecks at points of entry to the UK

Although less significant a factor than paper in the cost of printing the news, electricity cost inflation is another worry for printers, noting that these costs were again also exceptionally low in 2020. Wholesale electricity prices surged by 80% in 2021 (Ofgem), due to pressure on gas supplies from Russia, and the global energy crisis, which will persist into 2022

 

 

ITV’s H1 advertising revenues were up 29% YoY—and up 2% compared to 2019—to £866 million, with the Euros and an improving market ushering in the biggest June ever for the broadcaster. Studios revenues rose 26% (to £798 million), which was 5% better than 2019

ITV’s new deal with Sky provides clarity around the relationship between the two companies, with ITV soon able to dynamically serve ads on both downloaded content and linear channels (but apparently not via Sky Adsmart) on Sky Q. By the end of 2022, the full ITV Hub app will be available on Sky Q

BritBox—which was not part of the Sky deal—has shown muted growth in the UK (adding 55k in H1 to 555k subscribers), while over the same period, international subscriptions lifted 18% (to 2 million)

Epic Games, maker of mega-hit Fortnite, sued Apple over alleged antitrust violations around App Store rules and Apple’s 30% tax on in-app transactions. A decision could come soon, though it will be contested on appeal.

The implications of the case could be far-reaching, as Apple and other tech companies like Google design their platforms to extract high-margin revenue from the transactions they facilitate, including news subscriptions: a five-year basic in-app subscription to The Times costs £885, of which Apple takes £158. 

It comes in the context of a flurry of debate and decisions around tech antitrust and consumer protection: new laws may ultimately be needed, but regulators in the US and UK are proving they can be creative with their existing tools. 

The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.

Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.

The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.

Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.

Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.

Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.

On 9 and 10 March 2021, Enders Analysis co-hosted the annual Media & Telecoms 2021 & Beyond conference with Deloitte, and sponsored by Barclays and The Financial Times.

With over 50 speakers from the TMT sectors, including leading executives, policy leaders, and industry experts, the conference focused on the impact of the pandemic on society and the TMT sector, decarbonising work, and the post-pandemic recovery.

Over 1,000 attendees enjoyed our first virtual conference and these are edited transcripts ofthe speakers on Day 1, with keynote speeches and sessions on: sustainability in the TMT sector, news media, telecoms, and tech. Videos of the presentations are also available on the conference website.

On 9 and 10 March 2021, Enders Analysis co-hosted the annual Media & Telecoms 2021 & Beyond conference with Deloitte, sponsored by Barclays and The Financial Times.

With over 50 speakers from the TMT sectors, including leading executives, policy leaders, and industry experts, the conference focused on the impact of the pandemic on society and the TMT sector, decarbonising work, and the post-pandemic recovery.

Over 1,000 attendees enjoyed our first virtual conference and these are edited transcripts of the speakers on Day 2, with keynote speakers and sessions on: policy, advertising, video and sports, and video production. Videos of the presentations are also available on the conference website.

The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy.

Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry.                           

Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated.