A cooler consumer market sees Sky now facing the same pressures as its SVOD competitors, with a loss of pay-TV subscribers in the UK.

However, Sky is performing better in telecoms in both the UK and Italy. These markets are less susceptible to recession with Sky also benefitting from its position as more of a challenger than an incumbent.

Uncertainty continues to loom over both the sale of its German platform and the upcoming allocation of Serie A rights in Italy.

Service revenue growth almost doubled this quarter to 2.4% aided by price rises in the UK, Spain, and France, but remains well below inflation-levels.

The revenue boost from in-contract price rises will ultimately disappear as customers recontract, dampening the EBITDA outlook as costs continue to rise.

Operators are looking to other strategies to strengthen their positions, including edging up new-customer pricing, M&A, and attracting wholesale MVNO business.

Thanks to Parks (+11% YoY, $2.43 billion), Disney's Q3 operating income remained flat, balancing the decline from Media and Entertainment (-18% YoY, $1.13 billion) as DTC only lost $512 million and linear dropped by 23% ($1.89 billion). No new major growth initiatives were announced but Disney will look to stem DTC losses through Disney+ price rises and a password sharing crackdown.

Major segment resets are looming as Disney looks for new partners for ESPN and possibly buyers for its legacy TV business, ABC.

A difficult remainder of the year will be prolonged if the Hollywood talent unions strike into the autumn and beyond, while Bob Iger stays on as CEO through 2026.

Electronic Arts’ earnings for Q1 2024 delivered strong annual growth across its licensed franchises but also a worrying lag in mobile game revenue due to mobile sector challenges.

EA’s global dominance of sports-based games, and its 700m users, make it a strong candidate to be a ‘strategic partner’ with Disney for ESPN’s reboot as a direct-to-consumer service.

The launch of EA Sports FC24 next month finally sheds FIFA from EA’s largest franchise and promises a dynamic approach to managing football partnerships, but no word on increased margins.

While VMO2's fixed price rises this year were always going to be quite tricky, the 1ppt boost to revenue growth was nonetheless disappointing on the back of price rises of 14%.

Both mobile and EBITDA performances were better, but H2 EBITDA growth will need to be considerably stronger to get to guidance levels, which will be all the more challenging with the loss of the Lycamobile MVNO.

With the erosion of VMO2's differentiators of split contracts and broadband speeds, growth at VMO2 will require addressing new parts of the market—both geographically and across the customer range.

Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.

The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.

Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.

Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.

Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).

A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.

Sky has withstood the consumer crisis better than its telco peers, but owners Comcast are stepping up pressure nevertheless.

No buyer for its German unit has yet emerged. In Italy, the outcome of the ongoing Serie A rights auction will shape that company’s growth prospects.

Looking forward, Sky has built a solid content supply line and is likely to strengthen further from the deflation following the end of the SVOD bubble.

Mobile service revenue growth slowed again this quarter—now at +3%—as the impact of the 2022 price rises waned further, but a strong B2B performance for some compensated for consumer weakness.

Q2’s boost from bumper price rises will unwind over the following quarters as customers re-contract and face much lower increases next spring due to the inflation outlook.

Given the temporary nature of in-contract price rises, and the more permanent nature of elevated cost bases, new-customer pricing now appears to be edging upwards, and the case for consolidation is strengthened.

As younger viewers continue to migrate from linear TV to online video-sharing platforms, engaging with the audiences on these platforms is no longer simply an opportunity, but a necessity.

However, this ecosystem offers broadcasters limited monetisation opportunities, reduced audience data and worse attribution than the more lucrative broadcast TV model.

In this fragmented media landscape, broadcasters must maximise their digital reach and exploit incremental revenue opportunities, although linear channels and owned-and-operated platforms will continue to provide the bulk of revenues.