Revenues were stable year-on-year in Q3, with UK growth offsetting Continental decline. All three markets posted positive customer net adds across the quarter.
Underlying profitability is improving, and although World Cup-related changes to the football schedule depressed net income in Q3, they will lift it in Q4.
A possible sale of Sky Deutschland would make sense if it helps the buyer reach superior scale within Germany.
Whether to allow a Vodafone/H3G merger is essentially a trade-off between range of consumer choice and costs of network duplication. With the need for the former diminishing and the latter increasing, the case for approval is strengthened.
H3G is in a negative spiral of small scale, low investment, and low returns. A merger would allow it to form part of a more credible competitor with a transformed returns profile—without rising prices or reduced industry investment levels.
The CMA’s aversion to mergers has been very stringent of late—an approach that risks deterring investment and compromising competitiveness. Consolidation in UK mobile is unlikely to happen without a change of mindset.
A forthcoming UK regime on the relationship between publishers and platforms, certain to include Google and Facebook, will seek to replicate the payments achieved in Australia. However, the principles, design and precise process are still to be revealed by the Government
Facebook’s News Tab and Google’s News Showcase license content from publishers (including paywalled content) and direct traffic to their sites, although industry tensions remain high
Google Search is the elephant in the room because, while Facebook is a service to its users, search is a utility: making news more important to its offering, and explaining why Google’s commitment to the news industry runs deeper—and for the long term
Apple's News and News+ service to iOS users in the UK, US, Canada and Australia has attracted many ad-funded and paywalled news publishers since its launch in 2015
Publishers’ 'opt-in' to its walled garden environment to reach underserved demographics on their own sites and raise brand awareness, and more recently, take advantage of the reduced commission on subscriptions sold through the App Store, with Apple taking 15% instead of 30%
For Apple, the priority is to improve the user experience, ultimately driving sales of iOS devices, although its engagement with news is only a minor source of revenue compared to games. We regard Apple News as being mainly a device to buttress its reputation in those selected markets where it faces political and regulatory pressures, explaining its limited geographic roll-out
On 12 May 2022, Enders Analysis co-hosted the annual Media and Telecoms 2022 & Beyond conference with Deloitte, sponsored by Barclays, Financial Times, Meta, and Deloitte Legal
With up to 500 attendees and over 40 speakers from the TMT sectors, including leading executives, policy leaders, and industry experts, the conference focused on regulation, infrastructure, and how new technologies will impact the future of the sector
These are edited transcripts of Sessions 7 and 8 covering: UK mobile and the opportunities and challenges of infrastructure. Videos of the presentations are also available on the conference website
Whilst we remain sceptical of the churn reduction benefits of fixed/mobile convergence, the pandemic and a more astute approach from the operators is enhancing the case for it in the UK.
Creating the impression of a giveaway whilst minimizing the effective discount is key, as is extracting any loyalty and cost benefits.
Even if well executed, any upsides are likely to be modest. Operators are right to keep discounts to a minimum and to avoid M&A premia predicated on fixed/mobile convergence synergies.
Sky’s performance across 2021 significantly improved, driven in Q4 by a nice c.5% growth rate in UK consumer revenues and the advertising rebound, but effects of the pandemic are still being felt with EBITDA down 30% on 2019.
The decline in Group revenue accelerated in Q4 due to the severe shock to the Italian operation from its loss of most premium football coverage, although we see upsides in a possible rights reshuffle.
In 2022, Sky can leverage growth vectors including bigger content bundles, Glass, advertising innovations and broadband. Consolidating SVOD and telecoms markets may be more favourable to price increases.
Overall radio listening remains robust and continues to make up the majority of audio time, however a worrying decline in both reach and hours amongst younger people makes further innovation necessary
Shifting audio distribution trends driven by digital and IP listening, as well as the increasing influence of smart speakers and connected devices, represent significant challenges for the radio industry going forward
Strong collaboration and regulatory support will be needed to reconnect with elusive younger listeners, prevent US tech companies from becoming de-facto gatekeepers, and preserve the public value at the core of the UK radio industry
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.