Mobile growth improved very marginally to -3.6% this quarter as roaming revenues were harder hit and competitive intensity bounced back, but usage recovered from the lockdowns in Q2 and cuts to intra-EU calls were annualised.

Italy’s fortunes took a turn for the worse as roaming hit particularly hard and Iliad resurged. After a spate of downgrades to the outlook last quarter, there were some tentative upgrades in Q3 although the tone remains cautious.

The diminished drag from roaming is the primary positive driver from here. Although lockdowns of some degree are in place in Q4, their impact will be less severe than those in Q2.
 

The launch of new games consoles this week showcases broadly divergent strategies for Sony and Microsoft, with market leader PlayStation focused solely on defending its model against the rising tide of cheaper subscription games services.

Xbox's consumer offer is the best value proposition for these difficult economic times, attracting new customers and positioning for growth, and stopping slavish devotion to 'core gamers' in the process.

Amazon's Luna lands, providing big competition in game streaming services for Google's Stadia. But nobody is taking any notice, as neither provide a real breakthrough for the industry or great value for gamers. Stadia’s lifespan could be limited.

Fortnite has been kicked from mobile app stores over the ‘App Store tax’, the 30% cut that Google and Apple charge for in-app purchases.

Apple needs Fortnite to keep the iPhone attractive, but it also needs its revenue cut, as services have become a key part of its growth story to investors.

Apple can no longer set its ecosystem rules without regard for partners, as apps like Fortnite, Amazon and WeChat are so central to the utility of a smartphone.

Times Radio launches as an ad-free commercial speech radio service on DAB and online. By extending brand reach, it forms part of the marketing funnel to convert listeners into subscribers.

Radio is remarkably resilient for a traditional mass media, and this arrival will complement the strong commercial sector and the mighty Radio 4.

Timing will be a revenue challenge, but this bold, cost-effective, intelligently deployed experiment comes as the news industry is most at risk, a welcome innovation for readers and listeners—and for the sector.

Online reviews are a vital input for consumer decision-making. However, reviews are easy to manipulate, and widespread fraud is undermining credibility and raising the issue of consumer protection.

Facebook, Google, and Amazon utilise reviews to improve the consumer experience, but also to sell advertising to businesses and to address fraud. These companies leverage their data superiority to better utilise reviews on their platforms, and possess a competitive advantage, versus sites like TripAdvisor, Yelp, and eBay.

Demand for expert opinion remains strong, yet is supplied only by publishers and Which?, a small segment in terms of share of traffic relative to platforms.

European mobile service revenue growth strengthened very slightly to -0.3% this quarter but, with many positive and negative factors at play, it would be wrong to conclude that we evidenced a convincing improvement in momentum.

Most operators have reiterated their financial guidance in spite of COVID-19 but there is caution from Vodafone and those exposed to sports rights (BT and Telefonica).

The outlook benefits from continued lockdown measures (reducing churn and spin-down) and the annualisation of some financial drags from the middle of next quarter. However, competition in Spain remains intense and the sector is exposed to any economic downturn.

European mobile service revenue growth improved by 1ppt to -1.2% primarily as a consequence of diminished competitive intensity in France. Trends elsewhere were largely flat.

The mobile sector is playing an important role in tackling COVID-19 and is likely to be relatively resilient in the short term with a broadly neutral financial impact. Longer term it will be exposed to the fortunes of the economy.

There are reasons to believe that the improvement in trends evidenced in the last quarter may continue as churn reduction takes the heat out of some markets, cuts to intra-EU calls annualises out and for most countries, end-of-contract notifications will only begin to impact in 2021.
 

Broadcast radio has maintained its reach and listening time over the past decade: younger people listen less than before, but this is made up for by an ageing population.

The challenges to radio come from changes in distribution technology in the home and in cars, and from product innovation in the online audio space.

Over the next few years, we predict continued stability in radio, but as technology brings it into closer competition with online audio, broadcasters will have to continue product innovation.

2020 promises a year of transition for the games industry: eSports and games broadcasting are competing with traditional programming; game streaming services are becoming meaningful platform competition; and new consoles are on the way.

While most in the studio and TV industries continue to struggle with the games market—neither understanding (or seeing) a strategic fit, nor showing a willingness to invest—expect explosive growth to power the industry for the next decade and transform all entertainment services, not just games.

The ‘free-to-play’ games sector requires oversight and regulation to protect children and the vulnerable; expect regulatory turbulence in the UK, Europe and China.

Subscription game services will finally allow platform owners and developers to deliver truly accessible gaming experiences for all, across devices, at a lower entry price point, and curated to ensure consumer safety—both in terms of cost transparency and content types.

Consumer comfort with subscriptions should be embraced by the games industry and has already started in mobile. Apple’s Arcade subscription is the test case, providing focused all you can eat games that minimise exposure to violent gameplay, and the ‘free to play’ wild west.

Core gamers remain the most vital and profitable games customer segment, but they have been overserved and are an obstacle to broadening the reach of games. Now is the time to move beyond this group, to restructure, expand, and normalise the games market in the next decade.