Sky’s performance across 2021 significantly improved, driven in Q4 by a nice c.5% growth rate in UK consumer revenues and the advertising rebound, but effects of the pandemic are still being felt with EBITDA down 30% on 2019.

The decline in Group revenue accelerated in Q4 due to the severe shock to the Italian operation from its loss of most premium football coverage, although we see upsides in a possible rights reshuffle.

In 2022, Sky can leverage growth vectors including bigger content bundles, Glass, advertising innovations and broadband. Consolidating SVOD and telecoms markets may be more favourable to price increases.

It has been ten years since Netflix launched in the UK, initially riding the growing wave of internet video, but quickly raising viewer expectations of user experience, overall production quality and long-term availability of content—challenging the rest of the industry to keep up

Netflix’s push into original production transitioned streaming from pure catch-up or repositories of old favourites, to a vibrant entertainment option, driving the formation of an SVOD market and providing other content companies with a larger addressable base now familiar with paying for TV

The streamer has deftly navigated the path from insurgent to joining the same establishment that it radically inverted—through considerate industry participation and self-regulation—however further questions will inevitably be asked about the company’s growing influence upon Britain’s cultural fabric

Alongside freezing the licence fee for the next two years, the government made it clear that it believes the fee is no longer the optimal mechanism to fund the BBC, demonstrating a willingness to remove it in 2028

What seems to be the government's preferred replacement, a subscription, is not ideal: there are structural issues that mean it would not be possible to have a service that all could subscribe to without a costly switchover

Furthermore, a subscription would undermine a number of tenets of public service broadcasting, most notably universality, breadth of programming and representing the diversity of Britain—naturally a subscription service would pivot to commercially efficient content that targets its subscribers and those most likely to subscribe

By integrating Amazon's content, Sky tightens up its ecosystem. We now estimate that no more than 5% of Sky users have subscriptions to services that are not carried by Sky Q, excluding Now TV

The agreement may be a first step in closer co-operation, but Sky will be cautious to value the benefits and costs. Amazon's width of business makes it different from others it has made deals with

Sky is on its way to transform the relationship it has with content suppliers from a relatively simple wholesale model to something it now calls aggregation: this appears intrinsically more complex

In the UK, carriage on Sky Q will give the new service the opportunity to prove its worth to viewers. Without integration with the UK's biggest pay-TV platform, growing scale is difficult for nascent DTC services.

Elsewhere in Europe, Discovery seeks to bundle too. Unlike the US, where the company has a single model—basic cable—in Europe it operates both free-to-air and pay channels, and it also owns Eurosport.

Ultimate success will come down to whether Discovery's "real life content" is essential and defensible. Generally there is little evidence of people taking services that are not broad, while the barriers to entry for competitors wishing to commission "real life content" are lower than other genres.

Sky appears to have weathered the COVID-19 crisis, revealing an encouraging turnaround in its Q3 operating results, with revenue growth flat overall as each stream saw significant improvement from Q2.

Rights costs from a condensed sporting schedule began to hit EBITDA, which remains guided to fall by 60% across H2, with most of the impact in Q4. This was anticipated long ago, and Sky’s ambition remains to double 2020’s EBITDA “over the next several years”.

Having disclosed contrasting performances between its markets, Sky now appears more clearly committed to replicating its UK success in both Italy and Germany, with tangible plans in place to streamline costs and rebalance content expenditure—namely by “resetting” its spend on sports rights.

In this report, we examine the completion rates of every scripted series since 2018 across all the major UK broadcast channels.

Comparing scripted programmes across different channels by overall viewing is difficult as these numbers are affected by promotion, prominence, competition, the quality of online player UIs and availability.

The rate that series are completed—viewing of the final episode as a proportion of the first episode—eliminates these and allows comparison.

With a lack of live sport, the lockdown weighed on incumbent pay-TV platforms’ subscriptions. SVOD providers leveraged their cheap positioning—Netflix and Amazon Prime Video now rank above other subscription services in Europe, and Disney+ had a successful launch.

Incumbents—Sky, Canal+, Movistar+—all pursue a twin-track strategy. They are positioning themselves as gatekeepers thanks to service bundles, while redirecting resources away from sports towards original series.

European productions are increasingly garnering audiences outside of their home markets, regardless of the production language. Netflix is a major conduit for European exports, due to personalisation of the interface and high-quality dubbing.

Investors warmly welcomed WMG's IPO of non-voting shares in March, valuing the company at $12.8bn, a 388% increase in the company's valuation since Len Blavatnik acquired it in 2011

Investors are placing a bet on music streaming. WMG's strength in the US market due to R&B and Hip-hop in its catalogue allowed it to outperform UMG and Sony on recorded music over 2015-19, an advantage that will dissipate when growth shifts to emerging markets

COVID-19 impacts explains WMG’s 6% decline in recorded music revenues for calendar Q2 2020, despite an 8% rise in digital revenue, as revenues from physical sales (vinyl and CD) sank, and also those from artist services due to the halted 2020 live music season

Despite numerous examples of critical acclaim for BBC Three programming over the last couple of years, the evidence suggests that its audience has collapsed since the closure of its linear TV channel in 2016.

Annual viewing minutes of BBC Three programming are down by more than 70% compared to its last year of linear TV broadcasting, and weekly reach amongst its target demographic of 16-34s has fallen by c. 70%—a loss far greater than those of other TV channels.

More difficult to assess are the effects of the shift in content strategy. Comedy programming, for example, proportionally shrank in terms of the total volume available while receiving a greater share of consumption, in direct contrast to factual content’s fate.