BT ended a very challenging 2020/21 financial year with its worst quarter yet for EBITDA growth, as the third national lockdown impacted mobile, offices, pubs/clubs and installation revenue streams

There are many turnaround drivers ahead though, including price rises, backbook effects annualising, lockdown effect reversals, and full fibre benefits, but returning to revenue growth by the end of the year still looks challenging

The acceleration and expansion of fibre build is very positive in our view, but BT has given no guidance on the future benefits aside from capex returning to normal levels, which is doing it no favours with investors

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.

Total advertising revenues were down 6% year-on-year in Q1, but strong expected growth in Q2 should ensure H1 is on par with 2019, and up 26% on 2020.

ITV has completed the restructuring of its Media and Entertainment division, although it is not yet clear what that means for what's on screen and what type of screen.

Britbox's UK availability on Amazon Channels will aid growth but will lower ARPU and make the argument around prominence more difficult.

A move away from premium sport is long overdue from BT, with there having proved to be little strategic, 'halo' or other cross-over benefit to its core broadband and mobile businesses.

BT Sport has managed to dramatically increase its pricing since launch, with little evidence of significant net subscriber leakage, which has driven 'standalone' profitability and allows a partial or full sale.

A sale would not likely cover BT's full losses to date, but a partner could enhance the value of the asset, and an eventual full sale would reduce risk for BT and enable it to fully focus on its broadband and mobile core businesses.

Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.

Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.

Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.

Despite relying on a narrow IP base, US content production is booming, overwhelming other markets and seeking alternative distribution to cinema.

Responding to the rise of Netflix and Amazon Prime, studios seek to shift distribution from wholesale to retail—but only Disney may succeed.

Most content is likely to remain accessed by consumers through bundles. Provided they engage with aggregation, European broadcasters can adjust to the new studio model.

Market revenue growth sunk back to -3% in Q4 from -2% in Q3, with further backbook pricing and lockdown effects to blame .

Backbook pricing will improve with numerous price increases announced, but these will only start to take effect in Q2 2021.

Demand for broadband and ultrafast looks promising, but will also take time to filter through to revenue, with Q1 again lockdown-affected.

In a bold attempt to expand, DAZN has won Serie A rights for 2021-24.

With a worst-case scenario of 14% decline in revenue from domestic rights, the Italian league will limit losses, but runs the risk of more long-term damage.

Sky takes a calculated risk, and sends strong messages.

ITV continues to battle the stop-start nature of Britain’s reaction to COVID-19, with Q3 and Q4’s cautious advertising recovery stunted by the current lockdown. However, from April onwards things are expected to be looking up.

Studios has been hit similarly hard, with worldwide stoppages on content production, but ITV notes that over 90% of productions are back in production.

UK subscriber numbers for BritBox were announced for the first time—it hit 500k in January—the number being neither alarming nor particularly impressive.

Growth in the UK production sector is being driven by increased investment by American streaming services, while local broadcasters rely on co-productions to fund increasingly-expensive, high-end content. 

However, while this investment is welcome, our analysis shows that the output is predominantly less ‘British’ than that commissioned directly by local broadcasters.

Distinctive and diverse British cultural touchpoints are created or perpetuated by television. Current trends suggest a dilution of this, a globalisation of local content, and perhaps less relevance to British viewers.