Spotify paid $5 billion in royalties last year to the music industry. Critics claim the $0.0038 per-stream average royalty rate is too low. However, this is largely due to high volumes of ad-funded listening, a core part of Spotify’s freemium model, and a defence against piracy. 

To silence the critics, the “Spotify Loud & Clear” site presents data on the distribution of industry royalties, which are heavily skewed to established artists. Only the top 5% of artists generate annual industry royalties above $1,000, though they take home less under their deals. 

The remaining 95% of artists on Spotify generate under $1,000 a year and use the platform mainly to reach fans that attend live gigs, their primary source of income, now halted by the virus. These artists’ problem is digital discovery, as Spotify’s playlists push hits rather than the midlist. 

Italy's Serie A could award its 2021-24 broadcasting rights tomorrow to either Sky or DAZN (backed by TIM) for a fee significantly down on the previous cycle.

Either outcome looks good for Sky: increasing coverage at a lower fee, or pivoting to aggregation as DAZN will need to access Sky’s subscriber base.

DAZN and its ally TIM are also shifting strategy, but with weak rationale. The Italian auction reinforces our expectation of a drop in Premier League fees in the imminent British tender.

The value of certain sports rights can be appraised through three major metrics: the ability to command viewing/engagement, the ability to drive subscriptions incremental to other rights, and the propensity of those subscribers to provide the rights holder with additional revenues.

In this report we examine these three metrics in order to gain an understanding of the tensions in the market, along with the reasons as to why there is competition (or not) for certain rights.

Unsurprisingly, outside of a few primary sports rights, there are an abundance of secondary rights which find it difficult to display their value over others. Their value relies just as heavily on whether rights holders are committing to, or retreating from, major rights.

New car registrations will be down 6.3% (2.4m) in 2018, another year of decline from the 2016 peak of 2.7m, impacted by the soft consumer confidence in big-ticket purchases, with some spin down to used car sales

Auto Trader, despite the car industry’s downturn, has experienced only marginal pain thanks to the strategic focus on revenue diversification – principally into new cars, dealer auctions and enhanced subscription-based services for dealers

Our forecasts for media expenditure on cars in 2018 and 2019 are essentially flat. Auto Trader’s positioning offers insulation in a downturn, and we expect they will gain share in marketing spend, though not necessarily in terms of total consumer or industry expenditure

Despite the consumer's confidence having been shaken since the referendum vote for Brexit in June 2016, monthly retail sales, especially online, managed to grow above the private consumption trend until this October, a turning point that could mark the start of a retail recession extending into 2019.

Since mid-2016, TV advertising and retailing have lost their historical covariance, with TV advertising's recession briefly interrupted in the first half of the year due to sunny weather and the FIFA World Cup. After a flat Q3, we predict a resumption of TV advertising's decline, expected to be down 3-4% in Q4 2018 year-on-year.

2018 will be flat for total TV advertising, still better than 2017. However, the medium's weakness will persist in the first half of 2019, with hopes for a recovery only in the second half, assuming an orderly withdrawal from the EU starts in March 2019.

European mobile service revenue growth was sharply lower this quarter dropping to -0.7% after two years in positive territory, owing to weakness in the southern(ish) European markets of France, Italy and Spain

Iliad has strong momentum in Italy and we expect ARPU dilution to worsen into Q3, with the subscriber loss impact also growing.  Any loss of traction for Iliad is likely to drive another round of price cuts

We expect continued north/south divergence in Q3 with the anniversary of the European roaming cuts boosting the UK and Germany in particular whilst the outlook for Southern European operators remains challenging

Recorded music revenues in Japan are stuck in decline as physical sales sag, although 2017 marks the first year when streaming gained a foothold with 8 million subscribers. 

J-pop fans spend on 'experiences' with their idols including events, merchandise, CDs and DVDs, which streaming cannot replicate. Top native LINE MUSIC offers integration with a popular messaging app and bundling with mobile. 

Serving international repertoire, Apple Music claims more subscribers than Spotify in Japan, which is more localised, and has most users on the free tier. Amazon Prime Music is a looming constraint on the adoption of subscriptions. 

Audiobooks are growing fast, driven by smartphone adoption and better supply, as well as interest from people who don’t usually buy books, such as young men

The sector is dominated by the presence of Audible, Amazon’s audiobook publisher/retailer, which has driven growth of audiobooks but put publishers under pressure. Its strategy is a lesson in Amazon’s approach to media

Audio is an opportunity to sell to new customers, but publishers must acquire and use rights responsibly, and experiment while not letting the audio tail wag the print dog

Many European telecoms operators are pursuing a fixed/mobile convergence strategy on the pretext that the addition of mobile reduces churn. We see no evidence of churn reduction from this strategy

Discounts required to encourage take-up of fixed/mobile services are often value-destructive, even before competitor reaction: a 10% bundle discount necessitates a 2ppt improvement in churn to wash its face economically. M&A premia on the basis of convergence synergies raise the hurdle even higher

Most UK operators offer very limited discounts on fixed/mobile bundles for now, sensibly focusing on enhanced services. Vodafone is the most aggressive, albeit less so than it is elsewhere. All UK players should hope that it stays this way

Rigour and consistency in AV ad metrics is proving elusive. A 10-second ad on YouTube, ITV1, All4, MailOnline, Sky AdSmart or Facebook is measured in as many different ways, often indifferently. It is tricky, costly or impossible for agencies/advertisers to comprehend the overall picture.

By 2020 JIC-based BVOD ad impressions should be available from BARB all being well, giving BVOD a clear advantage over other premium online video measurement.

Google/YouTube seems to be ‘getting’ JIC co-operation now and has begun to galvanise video ad measurement, but forceful advertiser intervention is needed to extend and improve standards. Otherwise, advertisers are simply funding a JIC-free jamboree, and they (with content media) will lose the most.