Market revenue growth improved to -2%, after the sport-affected -6% last quarter, but was still low by historic standards.
Backbook pricing pressure is still hitting the market, and this will not improve until 2021 at the earliest.
Demand however looks strong; broadband adoption has re-accelerated, and the early signs of ultrafast adoption are encouraging.
Virgin Media’s lockdown subscriber surge continued into Q3, as working-from-home highlights the importance of the faster speeds its network can offer.
ARPU is more challenged, and will get worse next quarter given its forgone price rise, but price rises are back in fashion in the industry, so this problem is likely to prove temporary.
Openreach’s full fibre remains a medium-term threat, but the company is rightly taking advantage while its network superiority remains, with momentum firmly in its favour for now.
BT’s revenue growth remained very suppressed in the September quarter at -7%, with a limited COVID-19 recovery chocked off by seasonal roaming effects and regulator-inspired pricing forbearance.
EBITDA growth did improve to -3% from -7% last quarter, mainly due to short-term cost actions and the early impact of its longer-term cost program, and the company has upgraded its short- and longer-term EBITDA targets.
The company is also optimistic on a longer-term return to underlying revenue growth, helped by a return to regular existing customer price increases and the impact of full fibre, but not until 2023, with a few bumps in the road before then.
In this report, we examine the completion rates of every scripted series since 2018 across all the major UK broadcast channels.
Comparing scripted programmes across different channels by overall viewing is difficult as these numbers are affected by promotion, prominence, competition, the quality of online player UIs and availability.
The rate that series are completed—viewing of the final episode as a proportion of the first episode—eliminates these and allows comparison.
STV now has a clear pathway to reduce its reliance on linear advertising by investing in production, while pushing the transition to digital forward with a UK-wide footprint.
To that end, STV Player has some momentum and recent production company acquisitions, increasing external commissions and PSB Out of London quotas should ensure STV Studios returns to growth in 2021.
Such development is imperative: COVID-19 has accelerated structural change in viewing habits meaning now that content must not only be great, but available widely and immersed in a smooth user experience just to have a chance.
With a lack of live sport, the lockdown weighed on incumbent pay-TV platforms’ subscriptions. SVOD providers leveraged their cheap positioning—Netflix and Amazon Prime Video now rank above other subscription services in Europe, and Disney+ had a successful launch.
Incumbents—Sky, Canal+, Movistar+—all pursue a twin-track strategy. They are positioning themselves as gatekeepers thanks to service bundles, while redirecting resources away from sports towards original series.
European productions are increasingly garnering audiences outside of their home markets, regardless of the production language. Netflix is a major conduit for European exports, due to personalisation of the interface and high-quality dubbing.
Despite numerous examples of critical acclaim for BBC Three programming over the last couple of years, the evidence suggests that its audience has collapsed since the closure of its linear TV channel in 2016.
Annual viewing minutes of BBC Three programming are down by more than 70% compared to its last year of linear TV broadcasting, and weekly reach amongst its target demographic of 16-34s has fallen by c. 70%—a loss far greater than those of other TV channels.
More difficult to assess are the effects of the shift in content strategy. Comedy programming, for example, proportionally shrank in terms of the total volume available while receiving a greater share of consumption, in direct contrast to factual content’s fate.
BT’s June quarter results were predictably hit by COVID-19, with revenue and EBITDA dropping by 7%, but less predictably most of the hit was on mobile and business customer revenue, with consumer fixed resilient despite the suspension of sport.
BT’s full year guidance is cautious, with a 7% EBITDA decline at the mid-point, with much of this caution around further hits to its business revenue as government support is withdrawn.
BT’s full year guidance is cautious, with a 7% EBITDA decline at the mid-point, with much of this caution around further hits to its business revenue as government support is withdrawn.
The COVID-19 crisis and suspension of sport has hit Sky hard, with Q2 revenue falling 12.9% year-on-year, and EBITDA (while flat for now) expected to fall 60% in H2 as the rights costs from a condensed schedule hit the bottom line
Underlying trends are hard to discern amidst massive disruption, but the UK remains strong, and increasingly less dependent on sport, with continental Europe a work in progress to repeat this model
Longer-term initiatives continue, with new branded channel launches in the UK, broadband launched in Italy, and scope for further moves in Germany provided by significant sports rights cost savings following recent auctions
In March 2019, the UK government consulted on a wider TV advertising ban until 9pm for food and drink high in fat, salt, and sugar (HFSS), to combat childhood obesity. The government may shortly publish the results more than one year later.
TV and TV advertising are not the cause of children being overweight or obese (O+O). Policy change in this area should inform and educate parents and young children, as they have in Leeds and Amsterdam.
With 64% of the UK population being O+O, obesity is a complex societal issue requiring a multifaceted approach. The evidence from existing rules, and plummeting TV viewing amongst children, says that further restrictions on TV advertising will be ineffective in curbing the rise of obesity in the UK.