Hulu’s postponed UK launch, and the inability of SeeSaw and MSN to get carriage deals with the BBC and ITV, underscore the difficulty for internet TV aggregators of acquiring mainstream content

In-stream video advertising is nascent – we estimate it was worth just over 1% of UK TV ad spend last year – giving major channel operators/rights holders little incentive to syndicate their programming to online services

The future for ad-funded internet aggregators continues to look highly challenging, aside from YouTube, due to its audience scale and Google’s deep pockets

Despite the recession, in 2009 the French broadband market added 1.8 million connections to reach 19.6 million, but we expect the deceleration in growth to persist in 2010

Orange’s leading position weakened further in Q4 2009, despite retail price cuts, and we expect a further decline in market share in 2010, impacting FT’s top-line

SFR was the star performer of 2009, although its Ebitda margin has improved slightly. Iliad remains the ‘best in class’ in terms of profitability, but must address high churn at Alice. Bouygues’ fixed line début was an impressive splash – at a cost

ITV survived the worst recession and advertising downturn in its history thanks to market outperformance, cost cutting and other measures that delivered a full year profit of £25 million despite a 7% decline in total revenues, largely the result of a £134 million drop in its core advertising revenues

With the worst of the recession past, the focus of the incoming management is on revival and sustainable earnings growth through a transformation that will make ITV increasingly less reliant on at best stable broadcast advertising revenues in the digital age

Announcement of the transformation strategy awaits the conclusion of the ongoing internal review. We are slightly more optimistic about the TV advertising outlook over the next five years and see some upside potential from possible changes in the airtime rules, whilst the key to revival rests with the future coordination of ITV’s content and multichannel interests

The IFNC process remains on track, but the pilot contracts may not be signed off this side of the general election – if Labour wins the election, this will not be material to the pilots or the wider IFNC project in the Digital Economy Bill

Given their opposition to IFNCs, we expect a win for the Conservatives would halt the pilot negotiations – as well as the wider IFNC project

The Conservative plan appears to be the creation of a network of local media companies. We are sceptical that such LMCs would be commercially viable

France Télécom’s forthcoming Chief Executive Officer, Stéphane Richard, is considering a radical shake up and potential U-turn of Orange’s TV ‘content’ strategy, initiated and driven by CEO Didier Lombard

Orange could withdraw entirely from supplying premium pay-TV channels (sports and film) and distribute only third party content, as has been the focus of other broadband suppliers

A retreat of Orange from TV content would enable a more active cooperation with the Canal+ Group, benefiting both partners, who have largely overlapping subscriber bases

The Court of Appeal’s (CA) dismissal of Sky’s second attempt to overturn the Competition Commission’s (CC) decision that it must reduce its 17.9% shareholding in ITV to below 7.5% makes it increasingly probable that Sky will comply with the CC ruling at some point during 2010/2011

Although the CA’s dismissal of Sky’s appeal has always seemed the likely, even if never certain, outcome, the extra time consumed has so far benefited Sky greatly as the ITV share price has recovered from a low of below 20p in March 2009 to around 60p in January 2010

Sky’s share purchase was seen by ITV and others as unwanted interference in ITV’s affairs, but there was no suggestion of interference during the whole period of review by the competition and judicial authorities, while the outcome suggests that any future interest shown by other leading UK TV media players will probably also raise tough competition issues

Ofcom’s plan to review commercial airtime rules in 2010 with an emphasis on deregulation clashes with the Competition Commission’s provisional decision to retain the Contract Rights Renewal remedy (CRR) as it is, other than to extend the ITV1 definition to include staggercast and HD variants

The core issue is that it is impossible to address UK commercial airtime rules in isolation from CRR, which strongly motivates all parties to sell 100% of their commercial airtime inventories, and is seen by many as exerting a strong deflationary pressure on TV advertising spend

Even without CRR, the Ofcom aim of being in a position to effect change from the start of 2011 looks optimistic. Increasingly, it seems that meaningful relaxation of the existing rules will require primary legislation in order to circumvent the continuing competition issues that have led to CRR

France Télécom’s Orange TV premium strategy presents an interesting example of diversification into low cost ‘light’ pay-TV offers by an incumbent telecoms operator. Orange Sport and Orange Cinéma Séries are offered exclusively to Orange's 2.55 million TV subscribers, and five quarters after launch, adoption is 20%. This report draws several lessons on this type of venture for other incumbent operators

This report examines Ofcom's proposal that independently funded news consortia (IFNCs) assume the provision of regional TV news, occupying the regional news time slots vacated by the Channel 3 licensees

IFNCs are to be composed of commercial news organisations (television producers, newspaper groups, radio stations or websites), and will operate as private commercial/publicly funded hybrid models of regional news gathering and provision, alongside the BBC and commercial news organisations

DCMS has invited tenders for three IFNC pilots covering Channel 3 regions in Northern England and the Borders, Scotland and Wales, to be awarded in May 2010 with operations to commence by summer 2010.

The impending Competition Commission announcement of its provisional decision concerning the Contract Rights Renewal (CRR) remedy is expected to make little change beyond extending CRR to cover variants of ITV1, such as ITV1 +1 and ITV1 HD

Extending CRR to cover ITV1 variants should benefit ITV NAR (Net Advertising Revenue) by improving ITV1’s overall audience share, but does nothing to ease the deflationary pressures now gripping the TV advertising medium, where CRR works hand in hand with the requirement on the commercial PSB channels to sell 100% of their advertising inventories

The current goings on underline the dichotomy between competition and public broadcasting policy objectives