UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.
Sky and Canal+ have tied down key contracts until towards the end of the decade, while DAZN now has domestic rights for four of the top five European football leagues.
Tech players want live sport, but have distinctive demands and without new monetisation models they will not challenge pay-TV incumbents.
Broadcasters are accelerating their transformation into digital-first businesses. We estimate that 17% of broadcasters' viewing on the TV set will have been delivered by IP this year.
FTA platforms have a more complex migration pathway to IP than pay-TV. Given the existing strength of DTT, and its older demographic profile, DTT will account for more broadcaster viewing hours than satellite/cable combined by 2029.
By 2040, we estimate that half of all broadcaster viewing will be via IP, with broadcast delivery remaining strong due to the live schedule.
The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face.
Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.
Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.
Service revenue growth dropped off by 2.7ppts this quarter, and into negative territory, as operators in all markets suffered weaker growth
Operators in France and the UK implemented price increases this quarter but re-contracting absorbed any positive revenue impact. In Italy, regulatory intervention thwarted operator plans to raise prices
Increasing competitive intensity in France and Germany comes at a time when operators can ill-afford ARPU dilution and high churn
The next generation of the largest and most powerful 'frontier' AI models will be a key test for the pace of AI progress, with OpenAI's upcoming GPT-5 the most highly anticipated.
For OpenAI, the stakes are high, facing a growing assortment of rivals and with huge spend on training and running models to recoup. Staying at the cutting edge is key to justifying itself to the big tech backers on which it depends.
If OpenAI can deliver technology that matches its ambitious vision for what AI can be, it will be transformative for its own prospects, but also the economy more broadly. Falling short could be fatal.
After an arduous ten-month process, France’s Ligue 1 has reached a tentative deal to license its 2024-29 broadcasting rights at a price 14% down on the previous cycle.
Adding France (for €400 million p.a.), DAZN now has prominent positions in four out of the five big European markets. With a weekly top pick (for €100m p.a.), beIN consolidates its model.
Attention turns to distribution, and whether DAZN will patch up its partnership with Canal+.
The EU is investigating Apple over its Digital Markets Act (DMA) compliance strategy, including its tight control over app distribution via the App Store. More open choices for apps would be a boon to media providers and consumers.
Apple is defending its ability to profit from its iPhone ecosystem, a vital principle for future growth. AI is also being dragged into the battle, as Europe misses out on Apple Intelligence, at least for now.
The EU legislated early and perhaps clumsily, but the rest of the world is matching the substance. The UK has just passed its new digital markets regulation, and mobile ecosystems will be a key early target for regulator scrutiny.
Service revenue growth was broadly flat at 1.7% as improvements in Germany offset weaknesses in Italy.
The impact of price increases has been mixed, with subscriber losses dulling their upside, and the mixed picture looks set to continue into Q2.
The market continues to be challenging with elevated competition at the low end, pressure from some regulators to increase network coverage, and a somewhat soft EBITDA outlook.
AI integration into production tools throughout media industries will deliver increased productivity for professional content creation. Generally available tools will also improve quality and production speed for individual user-creators.
Roadblocks include the uncertain copyright status of models and their outputs, attitudes of creative workers and consumers, and the AI tech underdelivering versus what was promised. The need to integrate new tools into existing processes is perhaps the biggest brake.
There are stark differences by sector: the opportunities are greatest in games, where costs have ballooned and software engineering is core. Marketing is furthest in exploiting AI, while audiovisual production is more cautious.
On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Salesforce, the Financial Times, and Adobe.
With over 580 attendees and over 40 speakers from the TMT sector, including leading executives and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry.
This is the edited transcript of Session Four, covering: artificial intelligence, the new phase of online advertising, and closing remarks. Videos of the presentations are available on the conference website.