On 1 October, Google CEO Sundar Pichai announced $1 billion for worldwide news publisher partnerships for a novel News Showcase product, helping them to distribute their content to a new audience.

It is an important milestone: for the first time Google will pay publishers to curate content in the Google News app (initially), and to provide unpaywalled access to articles on publishers’ websites that users can click through to.

In so doing, Google is defusing the simmering conflict with publishers in major markets, and showing policy-makers its willingness to collaborate with a news industry facing existential threats.

 

Admissions and box office revenues in 2020 will be the lowest in over three decades. The pandemic forced the closure of theatres, putting pressure on cinema to a degree unlike ever before.

The reasonable success of the straight-to-TVOD releases under lockdown has some studios suggesting TVOD distribution will live alongside theatrical in the future. However, simultaneous releases are unacceptable for cinemas and TVOD’s sub-optimal financial reality means theatrical release will remain essential for most films.

TVOD distribution will temporarily play an expanded role, while SVOD will pursue its climb up the distribution chain and big studios will assert their increased power to negotiate more favourable terms with cinema owners.

Disney’s suite of UK children’s channels will go off air in September. Disney was unable to reach a deal with Sky and Virgin for the carriage of the Disney Channel, Disney XD and Disney Junior.  

It is unsurprising that Sky and Virgin have felt able to walk away from negotiations to carry the channels—they have performed terribly over the past few years, having been well outperformed by comparable kids' channels. 

Disney will continue to have a linear footprint with National Geographic and FOX, however the cessation of its kids’ linear operations has come before its time. Disney+ is doing well, however it is a pit of foregone revenues, while the recent performance of Disney channels raises questions as to the value of some of Disney’s non-film IP.

When we look back at consumer expenditure on pay-TV and alternative entertainment options during past economic downturns across major countries, we find a broad confirmation of the industry’s comparative resilience.

Also found are variations between services sold through annual contracts and cancel-anytime rivals, a negative impact on big-ticket products, and opportunities for substitutional services.

Unique features in the current crisis include the suspension of sport broadcasts and an SVOD-rich offering which widens consumer options. If hardship persists, incumbents like Sky could face tougher times than during the financial crisis.

Despite operating in a challenging market, Sky has continued to increase revenues, with the resilient performance of its direct-to-consumer and content businesses offsetting the disappointing drop in advertising income.

Across FY 2019, EBITDA was up 12.2%; profit growth driven by a significant reduction in “other” costs as large one-off effects disappear and cost-cutting continues.

Extended distribution deals with Netflix and WarnerMedia will protect Sky’s content proposition for the coming future, as would the mooted integration of Disney+.

The Government appears set on reducing the scale and scope of the BBC by dismantling the licence fee, and in its place pushing for subscription or making payment voluntary, without any evidence of the likely impact.

DTT – the UK’s largest TV platform – has no conditional access capability, and so implementation would require another costly and long-term switchover.

A voluntary licence fee would inevitably lead to a huge reduction in income. If just those on income-related benefits were not to pay, the shortfall would be over £500 million – in addition to the £250 million the BBC will be funding for over-75s receiving Pension Credit.

Comcast’s new, on-demand service, launching in April, is an attempt to break NBCU’s unsustainable dependence on sales to Netflix and other SVODs. Peacock provides a path of digital transition for advertising-funded TV with a revamped low-load, high cost-per-thousand model.

Reach will be built with a free online tier and distribution to Comcast subscribers. Peacock seeks carriage from other pay-TV operators, with which reciprocal deals would make sense (i.e. HBO Max on Comcast alongside Peacock on AT&T’s platforms).

In Europe, where Comcast has no existing major free-TV offering to transition, launching Peacock will be challenging but could present Sky with ideas to counterweigh Netflix on its own service.