As viewing moves online, broadcasters’ on-demand players make up a growing proportion of viewing, becoming central to their future strategies.
However, even though SVOD viewing might have begun to plateau, BVOD growth cannot yet balance the decline of linear broadcast.
Of this shrinking pie, 2023 saw most of the major broadcast players increase their viewing shares.
UK consumers bought £123 billionof goods online in 2023, up 63% on 2019 (vs 7% for offline). Online sales of non-store retailers, such as Amazon (and Temu, Shein, Next), reached £60 billion in 2023, of which Amazon—a nascent online advertiser in the UK—accounts for about £43 billion.
The pandemic’s structural boost to the online channels of store retailers—which operate on the open internet, outside online walled gardens—lifted sales to £63 billion in 2023, up a huge 78% on 2019. With more competition for spend in straitened times, they are using advertising more aggressively.
The open internet is also the domain for online-transacted services: the return to in-person experiences drove the biggest ecommerce gains since 2022, as consumers purchased services online worth an estimated £291 billion in 2023 and rising.
Disney's bottom line results were flattered by a year-long cost cutting drive: the decline in linear entertainment revenue is accelerating and direct-to-consumer subscriber growth has temporarily stalled.
A new sports JV with Warner Bros. Discovery and Fox, along with other announcements are designed to grab attention in midst of turbulent shareholder rebellion. Disney also—at last—unveiled a new games initiative with a $1.5 billion equity stake in Epic Games and a major immersive universe to attract younger audiences.
Disney's approach to the licensing of content to third parties is nuanced and so will be its effect on the perception of Disney+'s exclusivity.
Meta's China risk is overstated: the spend from Chinese advertisers is diverse and resilient to everything short of a full-blown trade war.
Apple (and Tesla) are in the more precarious position of selling directly in-market, and face sharpening domestic competition.
Amazon's exit from selling in China still leaves it exposed: its marketplace strategy is built on Chinese sellers, whose potential routes to market are proliferating with local platforms going global.
Vodafone’s Q3 results were slightly disappointing following the green shoots of Q2, with growth in Germany slipping back again, albeit some of it already flagged.
It is difficult to imagine the full year results event being a positive catalyst with the likelihood of a dividend cut, a recognition of the hard-currency reality of the financials, and a still challenging outlook for FY 2024/25.
Deal-making is a positive counter with a highly accretive deal still in the offing in Italy, and the prospect of execution in Spain and the UK. Various inorganic deals with 1&1, Microsoft and Accenture will also be helpful, although none of them as valuable as an improvement in the core operations.
Dramas from the public service broadcasters based on books consistently bring in bigger audiences than those that are not, a trend driven by certain genres, especially detective mysteries and thrillers.
A greater volume of newer book IP is being developed into programming, but this preference is not necessarily reflected in audience figures.
Younger demographics are less enamoured with dramas based on books than older viewers. There are however notable exceptions, while attracting younger audiences may have more to do with the age, genre, and fame of the IP.
The value of the domestic rights of major European leagues is falling due to the declining competitive intensity between broadcasters.
The Premier League’s new rights deal extends its lead, while Serie A faces a 10% fall in revenue next season and Ligue 1 struggles to get a flat fee.
Sky and DAZN have cemented their status as Europe’s top football broadcasters. Amazon has refocused to one game per week.
Book pricing has stagnated over the past two decades, leading to severe real-term declines in price per book. Nominal prices are now on the rise, but they are still swamped by inflation, and there is no prospect of them catching up to where they were.
The cost to produce books has been hit by many of the same inflationary conditions affecting companies (and people) across the board, leading to tough conditions at publishers, particularly small ones.
Fortunately, books offer many ways for publishers to price discriminate, charging more to price-insensitive, motivated readers.
The UK’s ‘zombie’ economy—largely flat since March 2022—is due to the cost-of-living crisis weighing on households, with this exacerbated in 2023 by the rising cost of credit. Real private expenditure growth will be weakly positive in 2024 before strengthening in 2025 as headwinds recede
Our 2023 forecast of a nominal rise but real decline in display advertising was realised, with TV’s revenues falling while digital display rose. Advertiser spend online is justified by the channel’s size and growth, worth an estimated £406 billion in 2023
For 2024, much lower inflation and mildly positive real private expenditure growth points to 3-4% display advertising growth, with a stronger recovery anticipated in 2025
Service revenue growth was broadly flat this quarter as some unwinding of price increases was compensated by a pickup in roaming revenues.
Vodafone has made some progress on its turnaround plan: it has sold its ailing Spanish unit; is rumoured to be in talks about a deal in Italy; and its German business is (just) back to growth (for now).
We expect muted guidance for 2024 with lower prospective price increases for most, inflated cost bases, and continued consolidation uncertainty.