UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.
Sky and Canal+ have tied down key contracts until towards the end of the decade, while DAZN now has domestic rights for four of the top five European football leagues.
Tech players want live sport, but have distinctive demands and without new monetisation models they will not challenge pay-TV incumbents.
The UK altnets collectively lost over £1bn in 2023, with most metrics unrealistically distant from what they need to be for a sustainable model, particularly the smaller retail-focused operators.
Consolidation is essential for survival, and CityFibre at least has a reasonable case for long term sustainability with a wholesale model and Sky as a customer, and looks the most viable altnet consolidator in our view, with VMO2/nexfibre able to pick up the pieces should the sector fail.
A lack of long-term viability and related financing difficulties will dramatically slow network roll-out, reducing the altnet pressure on the rest of the sector even if consolidation improves penetration levels.
UK news publishers are experimenting with generative AI to realise newsroom efficiencies. Different businesses see a different balance of risk and reward: some eager locals are already using it for newsgathering and content creation, while quality nationals hold back from reader-facing uses.
Publishers must protect the integrity of their content. Beyond hallucinations, overuse of generative AI carries the longer-term commercial and reputational risk of losing what makes a news product distinctive.
Far less certain is the role of generative AI in delivering the holy grail of higher revenues. New product offerings could be more of an opportunity for businesses that rely on subscribers than those that are ad-supported.
Broadcasters are accelerating their transformation into digital-first businesses. We estimate that 17% of broadcasters' viewing on the TV set will have been delivered by IP this year.
FTA platforms have a more complex migration pathway to IP than pay-TV. Given the existing strength of DTT, and its older demographic profile, DTT will account for more broadcaster viewing hours than satellite/cable combined by 2029.
By 2040, we estimate that half of all broadcaster viewing will be via IP, with broadcast delivery remaining strong due to the live schedule.
In the next fixed line regulatory review—TAR 2026—Ofcom is likely to maintain light regulation on Openreach’s pricing levels, while also maintaining strict restrictions on its pricing structures, which both help altnets.
On other matters, none of the interested parties (Openreach/altnets/ISPs) look like getting exactly what they want, but by and large the industry will likely get what it needs—regulatory stability with a broadly pro-investment slant.
The next TAR in 2031 is likely to be more dramatic, but by our estimates, even a full return to cost-based charging will not result in significant wholesale price cuts, which is likely to be a relief to longer term investors in BT and the altnets alike.
Women’s sport press news coverage during the 2024 Paris Olympics has softened after three years of record-breaking highs, though it remains up 3.8x on 2016 levels
Publications vary in their representation, with populars increasing article numbers faster, though qualities continue to devote more space to women. Success is a key generator of ‘newsworthy’ content
Coverage of women’s sport, despite falling article numbers, is larger and more prominent than before, and the threshold for inclusion continues to fall—signalling wider normalisation of women in sports pages
CityFibre has announced a deal to supply the second largest UK ISP Sky with wholesale broadband services, doubling its addressable target market at a stroke, in a blow to Openreach.
This may be just a foot in the door for CityFibre, but it is a critical one, and puts it firmly in the driving seat for altnet consolidation. There are also positives for VMO2 and other altnets hopeful of an eventual wholesale deal with Sky, and for retail ISPs now that the altnet sector is pitching towards wholesale away from retail.
While this is obviously bad news for Openreach, we see it more as an absence of a potential positive than something that might actually worsen current trends, and there are mitigating positives for the wider BT Group.
Market revenue growth was just positive at 0.2% in Q2, as lower price increases were mitigated by some temporary ARPU gains.
Growth is likely to drop negative in the rest of year however, with continued weak volume growth compounded by temporary ARPU gains unwinding.
Pricing structures differ quite widely as regards landline offers and out-of-contract pricing, and all could benefit from adopting best practice, a marginal gain worth pursuing in a tough market.
VMO2 survived the hammer blow of lower inflation-linked mobile price increases in Q2 with substantially unchanged revenue and EBITDA growth, helped by improving broadband ARPU
However, both mobile contract and broadband subs suffered declines, likely driven by issues with serving existing customers as well as attracting new ones, and these trends have to improve for the company to return to top and bottom line growth
Guidance implies that EBITDA growth will worsen in H2, but this would be good news in our view if it is driven by expenditure to support improved subscriber growth across broadband and mobile
Meta led the pack of tech results in Q2 with 22% growth and championing a suite of generative AI products; should these falter, Meta can recalibrate by devoting more of its AI infrastructure to core user and ad products.
AI and the metaverse give Meta an uncertain shot at a new platform play, leveraging its enormous user base and bringing developers back into the fold.
Reality Labs is still burning cash, but a collaboration with Ray-Ban offers a path to usable head-mounted displays, and could get Meta there faster than Apple’s cutting-edge approach.