UK residential communications market revenue growth dipped to 2.1% in Q3. While volume growth continued to decline, the main driver was weakening ARPU growth, which was partly caused by price rise timing effects but there was also an underlying contribution

Longer term, slowing market volume growth has contributed to the market revenue growth drop over the last year, but slowing ARPU growth is also playing its part, and maintaining ARPU growth is becoming a major challenge for the operators given the discounting required to win and retain customers

Looking forward, price rise timings will continue to cause short-term revenue growth fluctuations, but the main long-term factor will be the trajectory of subscriber ARPU, and whether any growth in this can be sustained

Children’s media use and attitudes have dramatically changed over the last few years, stemming from the rapid take-up of smartphones and tablets.

Traditional TV continues to decline at the expense of newer video services such as YouTube, Netflix and Amazon, with 43% of children aged 8-15 preferring YouTube videos over TV programmes.

These online services offer content producers wider opportunities, but questions remain around the lack of regulation online, and the recent scandal around children’s safety on YouTube has heightened these concerns.

Virgin Media’s subscriber figures were flat on the prior year quarter, a robust performance in a slowing and increasingly competitive market, with ARPU growth still weak but at least not worsening

Project Lightning had another successful quarter, accelerating strongly and passing an additional 147k premises, which bodes well for subscriber acceleration into 2018

A recently implemented price increase should boost ARPU growth next quarter, on the basis that it successfully limits the retention discounting that characterised last year’s price increase, but such a boost will be limited by wider market pricing pressures

The Federal Communications Commission’s Privacy Order (FCC) was overturned by the Senate, clearing the way for ISPs to ramp up consumer data-driven advertising revenue.

While Google and Facebook dominate digital advertising in the US as in other markets, the US is alone in removing regulatory barriers to ISPs taking a piece of the pie.

US ISPs now have a self-regulatory regime for consumer rights on transparency, security and data breaches; but in the UK and EU, privacy advocates prefer enforceable rights.

The development and utilisation of streaming technologies has allowed major SVODs, such as Netflix and Amazon, to attain a growing proportion of video viewing

However, tech is just one of the advantages held by these services: plateauing content expenditure, the inability to retain IP and inconsistent regulatory regimes hamper the efforts of the UK’s public service broadcasters

The localised nature of audience tastes, as well as the diversity of PSB offerings remain a bulwark to aid in the retention of relevance but content spend cannot lag

For the second consecutive year, the global recorded music industry body IFPI reported rising trade revenues, growing 5.9% to reach $15.6 billion in 2016

Our forecasts supplement IFPI’s trade revenue data with richer national-level consumer expenditure data from local bodies in core markets, and project CAGR of 2.3% to 2021, tapering off as streaming approaches maturity

This fairly modest topline growth for global recorded music streaming trade revenues is the product of our judgement that the marketplace remains awash with free music. Streaming trade revenue growth could be higher still if the industry finds a solution to piracy through technological or regulatory means, obviating the need for the ad-funded compromise

UK residential communications market revenue growth bounced up to 3.6% in Q2, a full 1.4ppt improvement on the previous quarter and reversing the downwards trend of the previous two quarters. However, this was entirely driven by price rises at BT and Sky, with the ongoing market volume growth decline continuing at pace

In competitive terms, TalkTalk was the only operator able to improve its broadband net adds on a year earlier, and Virgin Media was solid with only a modest decline, leaving BT and Sky shouldering the worst of the slowdown, albeit with neither company doing particularly poorly given the market context

New customer pricing remains tight, with Virgin Media in particular becoming more competitive. Looking forward, we expect volumes to continue to slow, and for the pricing boost enjoyed in Q2 to largely drop out next quarter, leading to a renewed revenue growth slowdown

Virgin Media’s subscriber figures in Q2 were a little mixed, with total homes and broadband figures weaker than a year earlier, but pay TV much stronger. ARPU growth fell though, largely due to price increase timing effects, leading to a modest dip in revenue growth

Project Lightning premises passed during the quarter rose to 127k, making at least some progress towards upping its run-rate after changing its roll-out management team and approach, the company declined to give indications of how this will evolve

The broader market context is still one of slowing broadband volume growth, and Virgin Media continues to take market share, being the fastest growing of the ‘big 4’ in both subscriber and RGU volumes

A Netflix-like subscription model for console based video gaming is a big step closer with Microsoft launching a clear and easy Xbox subscription game solution, and it may even work

Sony’s strategy for premium online services across all its businesses remains muddled and complicated, but could be fixed quickly: dropping game streaming is the first step, providing a lower cost subscription service is the second

Google’s admission that more curation in its games app store will be needed finally indicates a better understanding of the games industry, in parallel with the company’s efforts to win over other creative industries

In February 2016, the BBC moved its youth-focused channel BBC Three out of the broadcast sphere and into an online-only delivery system, as part of plans intended to find an extra £100m in savings laid out in 2014

The new service would aim to continue fulfilling the channel’s remit of delivering innovative and diverse content to a key audience of 16-34s, but with greater emphasis on short-form and various more digitally focused formats

Now, more than a year on, the effort shows the difficulty traditional media brands have in adapting to space occupied by niches that primarily digital brands have carved out, although the ‘channel’ still manages largely to deliver on its remit with much of its original content