TalkTalk managed to return to retail on-net broadband subscriber growth in the March quarter after years of decline, but at the expense of missing their EBITDA target for the year

They have stated a determination to grow the base going forward, but have admitted that this requires a rebasing of their EBITDA to spend the necessary amount on marketing, and guided to an EBITDA drop in the 2017/18 year

This looks much more realistic than their previous plans, but will in itself generate even more competitive intensity in the UK broadband market, which is already squeezed given the market volume slowdown and Virgin Media network extension

2016 was another good year for UKTV, with appreciable growth in revenue and linear viewing share; a trajectory the product of a sensitive pay/free balance of its channels, investment in productive EPG slots and development of its original programming suite.

Recent deals with both Sky and Channel 4 will go some way to providing financial stability, allowing UKTV to invest with more certainty in new content and encouraging further development of its online proposition.

UKTV Play has underperformed, chiefly due to a lack of content. But with plans to significantly ramp up both its offering and marketing spend, it may well unlock further audiences; specifically targeting elusive 16-34 year-olds.

Enders Analysis co-hosted the annual Media & Telecoms 2017 & Beyond conference in conjunction with Deloitte, Moelis & Company, Linklaters and LionTree, in London on 2 March 2017.

The day saw over 450 senior attendees come together to listen to 30 leaders and senior executives of some of the most creative and innovative businesses in the media and telecoms sector, and was chaired by David Abraham.

This report provides edited transcripts of the presentations and panels, and you will find accompanying slides for some of the presentations here.

Videos of the presentations are available on the conference website.

The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium

Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment

2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers

UK residential communications market revenue growth fell to 3.3% in Q4, from 5.4% in the previous quarter. The slowdown was mainly caused by BT’s overlapping price rise dropping out, but there was also ARPU weakness at Sky (due to price rise timings) and TalkTalk (due to re-contracting customers)

Volume growth in the core three products continued its decline, with broadband reaching saturation, line rental suffering from Virgin’s broadband solo offering and pay-lite TV offers losing momentum. Looking forward, recent and upcoming price increases should allow some recovery from current revenue growth levels

However, competitive pressures are increasing. Virgin Media’s network extension continues to accelerate, TalkTalk is attempting to stabilise its base and new customer pricing has fallen substantially since December 2016 – causing a dramatic disparity in new/existing customer pricing. The higher churn and/or reduced ARPU this is likely to cause, combined with slowing market volumes, indicate that market revenue growth is unlikely to recover to the 5-6% it enjoyed for most of 2015 and 2016

The past 14 months have seen a flurry of activity from the major UK television platforms, with all but one releasing a revamped version of their television offering; a neccessary reaction to the rise of VOD consumption and the threat this poses to traditional models

The result is 'connected' offerings, with the major players aiming to exploit the impact of this technology by seamlessly integrating on-demand capabilities, and in doing so mitigate the further shockwaves resulting from its emergence

No offering is likely to single-handedly alter the current subscriber landscape radically; with the pay platforms' each taking a unique—and to a degree—entrenched path that affirms its core consumer base, the greatest shifting of sands will likely come from changes in consumer trends or content quality

TalkTalk had a weak quarter, as was pre-warned, with the decline in the broadband base accelerating and consumer revenue growth of -6% slightly worse than the previous quarter

Guidance was however very bullish, with the company confident that it can bounce back to return to positive net adds in the March quarter, while still hitting its profitability guidance

This looks a difficult task in a market which is still highly competitive, but if it can achieve it, the longer term aim of a stable customer base and growing revenue and profits looks much more plausible

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

Market revenue growth in the UK residential communications sector dipped down to 4.5% in Q3, from 5.4% in the previous quarter, but underlying revenue growth actually rose a touch by our estimates. In an intensely competitive quarter, BT lost ground relatively in broadband, with its net adds dropping compared to growth at the others, but BT still had the highest net adds in absolute terms, and continued to lead the way in revenue growth

With BT’s mooted bid for a mobile operator and quad play moves being highlighted by several operators, in this report we re-examine the evidence for consumer demand for quad play and find it still wanting. In the UK since 2001 there have been eight attempts at cross-selling between fixed and mobile, with five outright failures (three of which were from BT), two attempts that lost market share after an acquisition but are now growing modestly, and one attempt which has successfully gained modest share

The UK fixed business has better growth and far better margins than the mobile business. BT alone makes more cashflow in the UK than the entire mobile industry put together – the grass may always seem greener on the other side, but in this case it definitely is greener in fixed. The fixed operators have far more to lose than to gain, and for this reason alone they should perhaps be wary in their approach to quad play

TalkTalk had a solid quarter for net adds, helped by churn being held well under control, with broadband perking up, TV dipping down as pre-warned, and fibre and mobile both significantly accelerating

Revenue and ARPU growth accelerated, although not by as much as might have been expected given the timing of price rises, with the lower priced SimplyBroadband product likely still driving significant ARPU dilution

The company disappointed the financial markets with a warning of higher SACs in H2, and its medium term EBITDA margin target remains challenging, but continued revenue growth and margin expansion are nonetheless likely