After a US debut, Amazon’s marketplace of SVOD services arrives in the UK and Germany, but without the major draws of HBO and Showtime

Unbundling SVOD for premium content strengthens Amazon’s position in the fast-developing connected TV landscape, where Prime Video is taking on Netflix, NOW TV and YouTube

For niche content providers, Amazon Channels provides a new, low-friction route to go direct-to-consumer with a mix of live and on-demand premium content alongside existing distribution strategies

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

Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today.

Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTTonly homes is set to increase by 13% by 2026.

The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV— which are of greater appeal to younger audiences.

Sky delivered 5% year-on-year revenue growth over the first nine months at constant exchange rates, although operating profits fell due to several factors, most notably the massive step-up in UK Premier League TV payments under the new contract

On closer inspection, relatively weak UK & Ireland Q3 revenue growth compared with previous quarters largely reflects one-off special factors 

Otherwise, positive quarters for Sky Germany & Austria and Sky Italy and improving cost efficiencies suggest that the Sky Group remains broadly on track to deliver its Investor Day 2016 guidance objectives

As Spotify wavers around the breakeven point, the deal with UMG is good news for royalty costs and thus for the likely advent of the IPO rumoured for autumn 2017

Royalty costs will reduce if Spotify reaches the subscriber growth targets that have been agreed – these have not been disclosed, so are hard to track

Question marks persist over whether a two-week optional windowing of new releases on the premium tier will significantly drive upgrades from the free tier

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

21st Century Fox’s (21CF) second attempt to acquire Sky comes at a time when the TV world faces mounting online pressure, accompanied by erosion of territorial boundaries in an increasingly global marketplace 

Despite some investor concerns about Sky’s ability to deliver its operating targets over the next five years, we consider the underlying business to be sound and starting to show benefits that derive from its international scale 

21CF’s bid has a strong strategic logic in terms of growing international scale further and evolving a global platform that integrates shared content strengths in sports and entertainment with Sky’s top of class expertise in customer relationships 

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

Sky H1 2017 results are broadly in line with company guidance on revenues, costs and synergies given at the 2016 Investor Day 

The core focus since the formation of European Sky in November 2014 has been investment for growth in all sectors of the business (i.e. retail products, content offers and customer service), an approach that is beginning to bear fruit. Sky Italy had a notably “excellent” start to the year

Most eye-catching in the results release was the planned launch in fiscal 2018 of an IP alternative to Sky’s DTH service. That speaks volumes about the know-how Sky has accumulated over the last ten years in meeting customer demands and building customer relationships

Netflix celebrated the 10-year anniversary of its streaming service by posting its largest quarterly rate of subscriber growth, adding just over 7m new subscribers in Q4 2016, smashing its own forecast for the period of 5.2m

5.12m of the new subscribers were for its international services, attributed to acceptance of its growing suite of English language original programs. But growth is just as likely related to the bolstering of overseas offerings with acquired programming, after launching worldwide with relatively small libraries

While re-establishing confidence after a period of doubt when missing targets in Q2, challenges await; most notably concerns around net neutrality, diversifying content genres, and the open question as to how effectively original programming will be able to carry the service