Big news publishers are pursuing licensing deals with AI companies, chiefly OpenAI. Not all publishers will see a substantial return; while some news may be important for training AI models, not all publisher content will be.

Litigation is a threat point when negotiations stall (see the New York Times), but the copyright status of Large Language Models (LLMs) is uncertain. In the UK, there has been no government intervention (on copyright or otherwise) that could facilitate licensing.

Publishers’ bargaining position is strongest when it comes to up-to-date material that could be important in powering some AI consumer products. They should seek deals to support their journalism, while bearing in mind the risk that new products may get between them and their readers.

Service revenue took a dip in Q4 to 1.5% as a waning price rise impact in the UK combined with the loss of positive one-offs in Germany.

We expect growth to slow further through 2024 as many operators implement lower index-linked price rises which are also coming under increasing regulatory scrutiny.

Vodafone has made progress on its turnaround plan—striking deals for its Italian and Spanish units—but it is not yet out of the woods, with ongoing challenges in Germany and approval still uncertain in the UK.

IFPI reports trade revenues from streaming rose 10% in 2023 to reach $19.3 billion, and we estimate Spotify contributed about $7 billion. Spotify also rewarded music publishers with about $2 billion in royalties. 

Spotify’s Loud & Clear data on royalties paid to the 225,000 professional and aspiring artists served to its 600 million users reveals a bulge in the middle part of the distribution in favour of Spanish language artists as the service expands in Latin America.

The top 1,000 earners are mainly artists at the top of the charts in the US and UK markets, which together contribute half of Spotify’s revenues and thus royalties. Top earner and top all-time streamed artist Taylor Swift earned over $100 million in 2023. 

European mobile revenue growth was flat again this quarter as a larger boost from annualising the roaming drag was outweighed by B2B weakness, a waning mobility boost and the unwind of pandemic upsides.

Italy saw the biggest improvement in its underlying trend as Iliad struggled to regain momentum, while competitive tension remains elevated in Spain and France.

Q4 looks mixed before 2022 kicks off with some market-specific positives for the UK, but the other European countries will finally face the impact of end-of-contract notifications.

Podcasts are a small but growing medium, and global streamers and domestic audio players alike are investing heavily in podcast content, distribution and advertising technology.

The broadening choice and diversity of podcasts available has put discoverability, exclusives and personalisation at the heart of the race to become the number one destination for audio.

While the UK currently lags other markets in terms of advertising and monetisation, increasing financial viability coupled with
healthy listener demand suggests a bright future for the UK podcasting sector.

Overall radio listening remains robust and continues to make up the majority of audio time, however a worrying decline in both reach and hours amongst younger people makes further innovation necessary

Shifting audio distribution trends driven by digital and IP listening, as well as the increasing influence of smart speakers and connected devices, represent significant challenges for the radio industry going forward

Strong collaboration and regulatory support will be needed to reconnect with elusive younger listeners, prevent US tech companies from becoming de-facto gatekeepers, and preserve the public value at the core of the UK radio industry

European mobile growth was essentially zero year-on-year—a significant improvement thanks to annualisation of the pandemic but there is little evidence of the reversal of its negative impacts.

Italy saw the biggest improvement in its underlying trend as the pandemic continued to suppress Iliad’s momentum, while elevated competitive tension in Spain and France ate into their annualisation boost.

Mobility and flight data suggests that Q3 will evidence a bigger boost from renewed travel than in Q2—positive for roaming revenues—but that the improvement in mobility will be weaker than in the June quarter.

Epic Games, maker of mega-hit Fortnite, sued Apple over alleged antitrust violations around App Store rules and Apple’s 30% tax on in-app transactions. A decision could come soon, though it will be contested on appeal.

The implications of the case could be far-reaching, as Apple and other tech companies like Google design their platforms to extract high-margin revenue from the transactions they facilitate, including news subscriptions: a five-year basic in-app subscription to The Times costs £885, of which Apple takes £158. 

It comes in the context of a flurry of debate and decisions around tech antitrust and consumer protection: new laws may ultimately be needed, but regulators in the US and UK are proving they can be creative with their existing tools. 

Mobile growth dipped again to -3.3% for what we hope is the final time as widespread lockdowns impacted paid-for usage in most countries.

BT and Vodafone joined the other European MNOs in guiding to improving trends in 2021—expecting EBITDA momentum to be 7-10ppts better—slightly ahead of the 5-7ppts for the European operators.

We may even see positive revenue growth next quarter thanks to the simple annualisation of the first lockdown, with the UK the most to gain and Germany and Italy the least. Investment is creeping up too with higher capex guidance and better 5G momentum.

After a strong post-pandemic rebound, Sky has the opportunity to leverage its strong reputation with consumers to meet the challenge posed by new competitors and the studios’ direct-to-consumer transition, establishing Sky Q as the ultimate gatekeeper of video subscription homes.

Sports rights costs in Germany and Italy have been cut significantly, while Sky’s spend on UK Premier League rights will decrease in real terms. Savings will ease the financing of the shift to original content, which, associated with owner Comcast’s NBCU output, anchors the aggregation strategy.

Fibre deployment in the UK and Italy presents a subscriber and revenue growth opportunity, and underpins the gradual shift away from satellite to online content distribution.