VMO2’s half-year results were something of a mixed bag with some decent revenue momentum but a big hit to EBITDA as COVID cost-savings unwound and company full year guidance suggests a further deterioration in Q4.

Volt, VMO2’s convergence product, is well-conceived and executed. With a following wind it should avoid the pitfall of revenue dilution whilst potentially offering some upsides.

The company remains in strategic limbo awaiting an outcome on its wholesale discussions with Sky. This will determine not just fibre expansion plans but also branding and co-marketing of its central products.

Press reports that Sky is in advanced talks to co-invest in Virgin Media O2’s upgrade of its cable network to full fibre are something of a surprise, with a host of issues for both parties to carefully consider

The muted deal would be somewhat negative for BT (although limited by Sky’s c.15% market share in VMO2 areas and regulatory protections/upsides). It is, however, a stark reminder of the precarious economics of alternative networks such as CityFibre

Whether this makes VMO2 more likely to extend its network further is a more critical issue, certainly for BT

VMO2’s inaugural results reinforced the company’s focus on profitability with EBITDA growth of 6% and record margins. Flat revenues year-on-year benefited from the annualisation of the COVID-19 hit but incorporated little by way of rebound.

Much remains to be seen in terms of strategy but indications thus far are reassuring with B2B a clear focus for revenue growth, and the benefits of direct distribution feeding through to profitability.

The company’s decision to build an overlay full fibre network is a bold, but smart, move—allaying justified obsolescence fears about its network, enhancing strategic flexibility, and reducing its cost base.

With the O2/Virgin Media merger now approved, VodafoneZiggo in the Netherlands may hold clues to their likely approach to the market although their starting point is not quite the same and some lessons may have been learned.

We remain sceptical of the merits of discount-led convergence strategies. The pandemic, however, has eased the route to cross-selling and strengthened the case for convergent technologies.

Virgin Media’s network strategy will be key with significant risks from wholesaling their cable network and from expanding their footprint.

The Warner-Discovery and TF1-M6 merger plans have dramatically pushed consolidation up European commercial television’s agenda.

The first path—heralded by Bertelsmann’s RTL Group—would aim at creating
national broadcasters with the content scale to operate compelling online platforms.

An alternative path revives the never achieved idea of pan-European synergies,
leveraging increased international appetite for non-English language content—but
its champion, Italy’s Mediaset, lacks capacity to deliver. 

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.

The Consumer Electronics Show (CES) this year was held virtually, with announcements revolving almost exclusively around the pandemic and addressing changing consumer needs. The evolving use of tech at home was a particular focus for brands as consumers are now demanding more of their homes than ever before.

Following a record 2020, ecommerce was a topic that garnered a lot of attention, with retailers emphasising the importance of a consumer centric 'digital first' strategy, accepting the fact that ecommerce is going to be bigger than it ever has been.

Amid increased tech use at home, moves to ban third-party cookies and impending regulatory changes to data collection in the US, the conversation around data and privacy was more prominent than ever before. First-party data is going to be more valuable, even if tracking restrictions limit what can be done with that data.

In the UK, traditional broadcast television's future appears threatened, as technological developments increasingly allow people to access video content on demand, whether on TV sets or other screens, or from traditional broadcasters or online services.

This report examines the extent to which timeshift viewing, by which we mean personal video recorder (PVR) playback and viewing to catch-up services, has bolstered linear TV.

The linear schedule is still very relevant for both consumers and advertisers, maintaining television’s status as an effective mass medium for building brands.