On 2 July News International switched Times online from a free to a subscription service, probably losing at least 90% of its traffic and shifting its strategy from reach and scale to a more traditional targeted brand and loyalty model

The challenges are substantial: while the Times is competitively advantaged with a strong roster of star writers and columnists, NI knows news itself is more commoditised than other content types, and most newspaper and broadcaster sites have been giving away news for a decade

News Corp may well realise the most benefits from the Times subscription service in a larger convergence play, aggregating audiences across group services such as Sky pay-TV and broadband, Sky News and the Wall Street Journal

News Corp’s bid for the shares it does not own in BSkyB is unlikely to generate much concern at the OFT because newspapers and TV will be seen as being in separate markets

But, separately, the Secretary of State for Business, Vince Cable, is entitled to make a ‘public interest’ intervention that requires the plurality issue to be assessed alongside the competition investigation over the next few weeks

We think that there is a strong case that the transaction does raise substantial issues of ‘plurality’ as defined in the Court of Appeal judgment on the purchase of ITV shares by BSkyB in 2006.1 Whether the new Secretary of State has the stomach for a fight with the company must be open to substantial doubt

Launching in the US this autumn, with international rollout due in 2011, Google TV uses enhanced versions of the Android mobile OS and Chrome browser to deliver full access to the internet via ‘Smart TV’ sets and devices

Google TV extends the company’s vision of the open internet to the living room, beyond the PC and mobile, where internet-enabled TV sets will take increasing share, raising search revenues, with potential to take a piece of the $150 billion global TV ad market

Pay TV platform operators’ are unlikely to embrace Google TV to avoid cannibalising their own business models, limiting adoption to free-to-air TV homes, at least initially, and direct revenues are likely to be slow to develop

There were approximately 18.7 million fixed broadband lines in the UK at the end of March 2010 including those used by small and medium enterprises (SMEs)

Year-on-year subscriber growth in Q1 increased for the first time since the early years of the industry, although the increase, from 5.7% to 5.9% was very slight. In our view it should be interpreted as a stabilisation

Looking at net additions in the quarter, Q1 saw the sequential growth drop back to a more normal level of 9% after the 54% spike in the previous quarter, but year-on-year growth, at 21%, was the first really substantial increase since Q3 2005, when market growth was coming to the end of its exponential phase

Subject to BBC Trust approval, Canvas looks almost certain to launch in spring 2011 after the OFT decided that it did not have the jurisdiction to review Canvas under the merger provisions of the Enterprise Act 2002. The OFT decision does not rule out complaints on other grounds, but the chances of persuading the regulators look very small

The launch of Canvas promises to strengthen significantly the free-to-air digital terrestrial platform, otherwise very limited compared with satellite and cable platforms in terms of bandwidth, but mass adoption poses numerous challenges and it is open to question whether Canvas will ever extend to more than half the DTT base

In the long term, it is hard not to see Canvas as an interim step in the growing convergence between the TV screen and the internet, raising the question of how successfully its PSB TV-centric approach can adapt to the coming challenges of the full blown digital age

In June, Apple’s new ‘iAd’ unit will begin serving ads within iPhone apps. iAd will compete with Google’s AdMob, paralleling Google Android’s competition with the iPhone, as the two companies contend to shape how people will use the mobile internet

The iPhone’s success is underpinned by apps, which draw in both consumers and publishers in a virtuous circle, but undercut Google’s search model. With iAd, Apple seeks to make sure iPhone apps remain the most profitable place for publishers

Steve Jobs has suggested a multi-billion dollar revenue potential – the true figure could be a tenth of that, but the real value of iAd will be in defending and supporting the iPhone

Sky Q3 2010 adjusted revenues showed strong year-on-year growth of around ten percent in the year to date (10.7%), and in the third quarter (11.1%), marked by strong product sales into its existing subscriber base, especially in HD, but also solid progress in broadband, telephony and line rental

The rise in revenues was more than matched by a rise in costs (up 11.7% in the first nine months); however, this was largely accounted for by a one-off rise in programming costs in the wake of Setanta’s departure in June 2009 and upfront HD investment and direct network costs associated with the strong growth in product take-up

Once the HD and direct network investment costs driving product growth have washed through, Sky appears well on track to deliver operating margin growth into the upper twenties for its TV business and into the high single digits for its telecoms business; which we expect to experience little direct material impact in the next five years from the implementation of the Ofcom wholesale must-offer remedy

Implementation of Ofcom’s wholesale must-offer (WMO) remedy for Sky Sports 1 and 2 is to proceed while the Competition Appeal Tribunal (CAT) hears Sky’s appeal, but subject to conditions which include restricting it to three parties: Virgin Media, BT and Top-Up TV

The settlement marks an important concession by Sky on the principle of enforced wholesale, and seems implicitly to reduce the WMO issue to one of price

DTT viewers should now be able to access live Premier League and other premium sports action on Sky Sports 1 and 2 from the start of the 2010/11 football season; but the ability of BT and Top-Up TV to capitalise depends on several factors, among them the possibility of Sky launching Picnic should it satisfy Ofcom’s limited preconditions for that service

A hung Parliament now appears the most likely outcome of the UK general election on 6 May, giving the Liberal Democrats influence, in terms of votes and seats, over the next government

Because the Lib Dems are ideologically closer to Labour than to the Conservatives, we anticipate their influence will favour the policy and regulatory status quo in media and telecommunications in relation to the proposals made by the Conservatives

This influence would be strongest in a coalition of Labour and the Liberal Democrats, but also would persist in a Conservative minority government, reducing the likelihood of a new legislative framework for media as proposed by the Conservatives

Google’s UK revenue increased 18% YoY in Q1 to £534 million (net of hedging gains), its highest rate of quarterly growth since the recession started in 2008

Better than expected performance is due to reacceleration in paid search, underpinned by improving levels of retail e-commerce and business and advertiser confidence

We have raised our 2010 forecast for Google UK to 18% YoY growth and for UK online ad spend to £3,875 million, representing a like-for-like rise of 13% YoY