RedBird IMI will sell its claim to own the Telegraph Media Group (TMG) due to the public interest test it was set to fail, with the Spectator also back on the block
TMG surpassed a declared goal of 1 million subscribers by the end of 2023, motivating our forecast of 4% revenue growth for FY2023 to reach £265 million
The buyer of the Telegraph is likely to face an intervention on public interest grounds from the Secretary of State—a hurdle that could dissuade many bidders
The Government will enact a new ban on foreign states acquiring UK print news media, forcing Redbird IMI to end its pursuit of Telegraph Media Group (TMG).
The new law adds a further criterion to the regulatory scrutiny of media mergers on competition and public interest grounds, but there remain questions about its scope.
The new law will collide with the completion of Phase 1 of the regulatory process on public interest grounds by the Secretary of State (SoS), unless RedBird IMI surrenders.
A new UK corporate structure for RedBird IMI to own the Telegraph and Spectator has sparked a second regulatory intervention on public interest grounds, which has set back the deadline for Phase 1 advice from Ofcom and the CMA to 11 March.
Even without the frenzy of opposition to the merger of RedBird IMI and TMG, a like-for-like comparison with the corporate structure of the Evening Standard highlights several concerns that could arise in Ofcom’s PIT.
The Secretary of State Lucy Frazer will certainly prefer to refer the merger to the CMA for an in-depth Phase 2 investigation in view of the scale of public interest concerns, despite undertakings offered by RedBird IMI.
The quest for sustainability in the UK national news industry is gaining ground, thanks to digital growth offsetting relentless print decline. The challenge of the print-to-digital transition has not faded, however, amidst the oncoming cliff-edge for print.
Nationals choosing the path of the walled garden on digital have out-performed those in pursuit of the ad-supported mass-market audience, whose ad yield per user is being compressed by more efficient scale platforms and the end of tracking technology.
Despite the challenges facing the news industry, the beacon of light shone by professional journalism has never been more important to humanity, to combat disinformation and misinformation on the internet, which Gen AI tools will only exacerbate.
With sport at the heart of the pay-TV ecosystem, dedicated online-only streaming services could emerge as a threat to leading players like Sky
The liveliest newcomer, DAZN, launched in 2016 with mostly second-tier sports. Now in seven markets and counting, it has recently made bold moves into top-flight competitions, notably in Italy, albeit as a secondary player
History has not been kind to those challenging pay-TV incumbents by selling sports unbundled—particularly in Europe, as Setanta, ESPN, beIN SPORTS and Mediaset can testify. If DAZN can stick to secondary positions in premium rights, or simply less-expensive sports, perhaps it will fare better
When its acquisition of 21st Century Fox closes, Disney will own 60% of Hulu. If it bought Comcast’s 30% stake (and WarnerMedia’s 10%), it could fully leverage the platform for its US direct-to-consumer strategy
Comcast’s Hulu stake has little strategic value to it. We argue it should sell to Disney in exchange for long-term supply deals for ESPN, as well as for the upcoming Disney+ and Hulu, similar to its recent pacts with Amazon Prime and Netflix
This could naturally be extended to Sky in Europe depending on whether Disney decides to launch all direct-to-consumer or sticks with pay-TV in certain markets
There is a belief in some quarters that there is space for a myriad of large SVOD services in the UK. We question whether there is room for more than the current three pacesetters; Netflix, Amazon and NOW TV
Like the UK, the US market is dominated by three services, and there is evidence of an appetite for further offerings. But the US market is conspicuously different to the UK's, with the forces behind cord-cutting in the States less apparent this side of the Atlantic
Potential domestic UK services would struggle to compete with the resources—supported by debt-funded and loss-leading models—that foreign tech giants can marshal
The ban on pre-9pm TV ads for HFSS (high in fat, salt or sugar) products being considered by the Government would not play a constructive or quantifiable role in reversing the UK’s rising childhood obesity rates.
The ban on HFSS product ads since 2008 around children’s programming has not impeded the inexorable rise of childhood obesity. In 2010, Ofcom termed an HFSS watershed ban ‘disproportionate’ and ‘ineffective’.
In 2018, a watershed ban would be even less effective. Children’s linear broadcast TV viewing is down by half since 2010, mainly to YouTube’s advantage, which benefits from light-touch HFSS regulation.
The Telegraph, The Guardian and News UK (The Times and The Sun) will jointly invest in The Ozone Project to develop a state-of-the-art platform to sell their digital inventory
Ozone will add value to news digital inventory and seek to win back advertiser expenditure on Facebook and Google’s various properties, (indirectly) reigniting interest in placement next to quality news media content
Each JV participant operates a distinct business model, which risks friction, but this digital reboot is crucial. By 2020, Ozone could add circa £30 million per annum – not a trivial contribution to a national newspaper newsroom
Despite significant changes in people’s video viewing habits over the last few years, the TV platform landscape has appeared to have reached an equilibrium.
We expect pay-TV to retain its utility status for most existing customers. At the margins, movement from Sky and Virgin Media to free-to-air or pay-lite services will be mitigated by population growth.
The excitable growth phases for Netflix and Amazon are likely to be over, but they have carved out prominent positions in the market. Meanwhile, the uncomplicated allure of free TV remains strong for half the UK.