Spotify is now the world’s first publicly listed on-demand music streaming service. Its global footprint generated €4 billion in 2017 from over 70 million paying subscribers and 90 million ad-funded users across 65 countries

As it expands, the service is steadily but surely moving ever closer to profitability, with a 2019 operating profit a very real prospect

So far and for the near future, Spotify’s global pre-eminence versus competition from Apple, Amazon and Google proves remarkably resilient. Plans to build upon its differentiating features will become ever more decisive as the tech titans will continue to wield their resources and ecosystems against the comparatively undiversified company

The UK mobile market is growing strongly – we estimate revenues by 5% and EBITDA by 8% in 2017 – excluding one-off regulatory drags and the loss of non-profit-generating handset revenue

Regulatory price cuts end in mid-2018, and the handset effect will disappear from all reported figures from April 2018, leaving scope for very positive headline growth next year – considerably better than its European comparators and the sluggish UK fixed market

The outlook for the UK mobile industry is the best it has been in a decade, with significant growth in data demand, price increases, some supply constraints, rational competition, and major regulatory drags rapidly fading

Linear TV's decline continued into 2018, with an overall drop of 3% across the first 12 weeks YOY. However, overall TV set usage remained flat at 4 hours/day, as time spent on unmatched activities—which includes Netflix, Amazon and YouTube—continues to rise.

Within the ever-shrinking pie of consolidated viewing to the TV set, share of viewing (SOV) to the ten largest channels remains broadly flat. Across the whole of 2017 and the start of 2018 the best performer has been ITV (main channel).

Several big-name digital channels are showing surprising signs of recent decline, including UKTV’s Drama and Viacom’s 5USA. It is too early to tell if these declines are a blip or a trend. However, they reflect stalling growth from the long tail of digital channels in aggregate. 

The market for addressable TV looks constrained despite its benefits, with Sky AdSmart taking less than 2% of overall TV ad revenues. Meanwhile, online video revenues for Google, Facebook and others have surged dramatically

Agencies are seemingly enraptured by online video – a highly profitable medium to buy – despite concerns about a lack of effectiveness, safety and transparency 

For broadcasters to compete, better radical collaborative action is needed, including industry-wide adoption of AdSmart, and overhauling the trading agreements which hinder its take-up

UK residential communications market revenue growth fell again to 1.2%, with weakening ARPU growth the main driver. New customer pricing remains flat to down, and existing customers are being increasingly discounted, fuelling the ARPU weakness

High speed broadband adoption is proceeding apace, but the high speed premium is fairly thin, muting the impact on ARPU. Regulated wholesale price cuts from Openreach finalised today and due in April 2018 will not help

Looking forward, the March quarter will benefit from price timing effects at BT and Virgin Media, but we fear that the rest of 2018 will follow the current downward trend and the operators will need to adjust to an ex-growth environment

Virgin Media’s Q4 performance was a little softer than expected, with subscriber figures quite weak and no improvement in ARPU growth despite a better implementation of its annual price rise

The cause is however likely market-driven, with broadband demand slowing and all operators struggling for ARPU growth, and Virgin Media does now lead the market for subscriber, RGU and revenue growth

The prospects for 2018 are solid if not spectacular, with Project Lightning driving market share gains and ARPU defended by a network speed advantage that will last for many years yet

This year marked the second annual IABUK Digital Upfronts. As well as Facebook, Google/YouTube, Aol, Yahoo!, Twitter, BuzzFeed, Vice and others, several traditional media companies – Sky, The Guardian and Global Radio – participated, reflecting the rising importance of digital media and digital media buyers to their businesses

Many of the pitches were informed by the key shifts in online content: it is increasingly cross platform, driven by mobile devices and focused on video programming, and these formed the main themes of the event

A key piece of context is the rise of social media and the shift to programmatic buying, which continue to driven down pricing for all but the most valuable inventory – audience scale, high value audiences and premium content have never been more essential

UK residential communications revenue growth bounced up in Q3 as we had predicted, on the back of continuing solid volume growth and improved ARPU growth driven by a series of price increases impacting in the quarter

The overall revenue growth of 6% was supported by some one-off factors, such as overlapping price increases and the launch of BT Sport Europe, but we believe that growth at this level will be sustained for the next two quarters at least

Looking forward, the impact of TalkTalk’s cyber-attack is uncertain in the detail, but it will clearly slow TalkTalk, benefit some of the others and may temporarily impact market volumes. Another area of competitive uncertainty is the impact of Virgin Media’s network extension as it gathers momentum into 2016, with all of the others likely to lose significant share in Virgin’s expanded areas

Virgin Media had its strongest quarter for three years in broadband net adds market share – a robust performance in a competitive environment and very much in line with recent strong performances at both Sky and BT

Group revenue growth improved 1ppt, or 3ppts adjusting for distortions, driven by accelerating growth in all operating divisions although higher content and hardware input costs offset the benefit to margins

The Project Lightning network expansion program continues, targeting 250k new premises by the end of 2015, with a discernible impact to subscriber and revenue growth likely to be apparent from the start of 2016

While volume growth remained robust in Q2, UK residential communications revenue growth did dip again during the quarter, to 3.6% from 4.5% in the previous quarter and 5%-6% for much of 2014

However, this largely related to the timing of price increases, with there being a host of headline and effective increases due before the end of the year. The combined effect of those announced so far is sufficient to push market growth back up to the 5%-6% range for both of the next two quarters

Looking ahead, the actual launch of BT Sport Europe in Q3 may have further impact, but a modest pre-launch effect suggests that this will not be dramatic. BT will be hoping that it at least drives an acceleration of growth in its TV base, given that it is still free for these users