The UK broadband market remained strong in Q1 2015, backed up by healthy volumes, with a modest weakness in ARPU causing revenue growth to slow to 4.5% from 5.7% in the previous quarter. ARPU growth was particularly weak at BT and Virgin Media, with part of this due to one-off factors, but part due to the dilutive effect of increased promotional activity

Broadband volumes continued to modestly accelerate, pay TV volumes modestly decelerated and line rental growth levelled off. The highlight was high speed broadband, with market net adds continuing to rise, driven by increased marketing and BT’s roll-out reaching more rural areas where the speed improvement is more marked

Since the end of the quarter, Vodafone launched a new consumer dual play product. Launch pricing is at the bottom end of the current price curve, but not well below it, suggesting that it is wisely imitating EE’s approach of cross-selling a profitable product as opposed to deep discounting on broadband to build mobile market share

The US music publishing market, worth $2.2 billion in 2013, is poised for moderate CAGR of 2.5% in the period 2014-17, thanks to performance royalty growth from broadcast and new media uses, offsetting flat mechanicals as the physical-to-digital transition in recorded music continues to place pressure on this revenue line

ASCAP and BMI, the performance rights organisations, have been engaged in an intense period of litigation against Pandora, the popular ad-supported streaming service with around 80 million users, in which Pandora has prevailed

ASCAP and BMI have also sought to loosen the consent decree regime in place since 1941 and overseen by the Department of Justice in order to enable "market-driven" rates, but this effort also looks set to fail in light of the firm opposition of all classes of licensees

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 17 March 2015. The event featured talks from 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides the accompanying slides for some of the presentations.

Videos of the presentations are available on the conference website.

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 17 March 2015. The event featured talks from 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts from some of the talks, and you will find accompanying slides for many of the presentations here.

Videos of the presentations are available on the conference website.

Sky plc has produced a strong first quarter across its three markets in terms of subscriber growth, record low churn and continuing firm control over costs, which has contributed to a 5% increase in revenues and 20% increase in operating profit over the first nine months of fiscal 2015

As expected, practically all the retail customer growth in Q3 occurred in the UK & Ireland and in Germany & Austria. Nevertheless, the results were also positive in Italy, as it registered the highest net customer increase in 3 years and record low churn

It is still too early to judge the success of the Sky plc strategy in terms of synergies, innovation and content origination. Whilst the potential appears great, the imminence of the next Bundesliga auction is a reminder that the issue of sports rights inflation is unlikely to disappear even after the latest PL auction

European mobile service revenue growth improved for a fourth consecutive quarter jumping 1.7ppts to -2.7%, the slowest rate of decline in over three years. Easing declines in France, Italy and Spain largely drove the improvement but a full recovery in these markets is still some way away given that all of their growth rates remain below -5%. The UK, and now Germany, are experiencing positive mobile service revenue growth although their improvements in the quarter were more modest

Three announced consolidation transactions have yet to be approved by the regulators although none of these deals are likely to offer much market repair, being either of the wrong kind of deal or being in markets that are growing. Consolidation targets remain in France, Italy and Spain which offer clearer routes to market recovery as seen in Germany where the consolidation of O2/E-Plus has already led to positive rhetoric on medium term market growth prospects

Network investment continues with 4G roll-outs at or over 70% population coverage in all markets and targets being accelerated, supporting long term optimism in the sector. Strong data traffic growth coupled with the growing importance of data to service revenue give a clear focus for operators on value-adding network quality investment, although the impact of pricing competition in some markets could weigh on the ability to capitalise on these trends in the medium term

Although Sky’s bids might be seen as putting its majority ownership of PL rights beyond reach at the next auction in 2018, the contest between Sky and BT is by no means over, raising the question of further inflation of premium sports content as other rights come up for renewal

Sport may have lost much of the importance it once had in generating profits from pay-TV platforms; however, the record bids by Sky leave no doubt as to the continuing importance of premium sports, and especially PL football, in terms of building and retaining overall scale

Through placing less inflated bids than Sky and not winning any extra packages, BT has put itself in a more flexible position with regard to future strategic options, which includes (VULA permitting) competing for televised rights to other premium sports besides football

The record £1,712 million to be spent yearly on live TV rights to the PL from 2016/17, about equal to the entire BBC TV programming budget, has hammered home the continuing importance of premium sports, especially PL football, in cementing scale in pay-TV

Several regulatory processes are still in play that could influence market developments over the next few years. We expect Ofcom’s WMO remedy to continue in close to its present form, while the VULA margin squeeze sets significant restraints on BT Sport over rights payments

Although the Virgin Media complaint to Ofcom has raised genuine competition concerns over the design of the PL auction, which the regulator is investigating, we see little opportunity for significant intervention

The UK residential communications sector continues to be in rude health, with revenue growth in Q4 accelerating by 1ppt to 5.7%, the strongest it has been for years, with all of the operators enjoying an improvement. Volumes were strong, and ARPU even stronger, with the latter driving most of the revenue growth progress, driven by firm pricing and high speed broadband adoption

Growing revenues and profits in an industry tends to encourage both investment and competition, and this is certainly the case in the fixed telecoms market, as BT announced plans for higher speed services using G.fast and Virgin Media announced a 4 million premises network expansion. The timings suggest that Virgin Media will keep its edge; given historic trends and its network capabilities we expect it to be offering superior speeds to G.fast by the time G.fast hits the mass market

In competitive terms the biggest short term threat is EE, which is growing its broadband base at 15%, and may accelerate further in 2015. Its success appear to stem not so much from the raw appeal of ‘quad play’ bundling as improved performance in the mechanics of cross-selling from physical shops. EE itself may be less of a threat if its planned merger with BT is completed, but Vodafone is launching broadband services in the spring, and H3G/O2 may yet be encouraged into the market

Consumer expenditure on recorded music continued its decline in 2014 by about 6% to $18 billion, as purchasing of download-to-own (DTO) albums and singles passed its peak in 2013, adding to the ongoing decline in total sales of CDs that started a decade ago Streaming is now the only growth story left for the industry, and it has a global footprint, being embraced by developed and emerging markets alike, unlike purchasing The US phenomenon of rapidly rising revenues from ad-supported audio streaming services such as Pandora and music video streaming on YouTube is quite unique as other markets currently lack the potential for online advertising