Market revenue growth surged to 2% in Q2, but entirely-and-more driven by price rises, with underlying trends negative across volumes and ARPU.
Broadband volumes in particular turned sharply negative, largely due to a post-lockdown hangover combining with weak economic conditions.
The outlook is bleak: price rise benefits are set to wane and then reverse, and weak volumes will feed through, with economic recovery needed for a return to sustainable growth.
ITV’s external revenues saw only a small decline in H1 (-2%), a product of the Studios business’ solid growth (+8%, £1.0 billion) offsetting a very tough period for television advertising, which saw an 11% YoY decline.
Despite the appearance of a contracting market, ITV remains very confident in the continued organic growth of Studios, while the ad market looks to be improving although the full year will be down.
ITVX is growing both in total viewing and the length of viewing session, an outcome of improving the experience and content offering. However, broadcast viewing of ITVX exclusives is lower than might be expected, indicating that cannibalised linear viewing is more of a driver of ITVX growth than ITV seems to suggest.
Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.
Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).
A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.
A new era is starting for the big consumer tech companies, as they venture outside of their traditional comfort zones to bet on future growth—most obviously in AI, and then cloud, gaming, headsets and video.
Competition in the tech space is intensifying as incumbents go head-to-head in new revenue growth areas also populated by insurgent startups—their M&A watched closely by competition regulators.
Fat profit margins have ensured vast financial resources are available to pour into competition, but hitting the right targets for consumer engagement is key to success.
As younger viewers continue to migrate from linear TV to online video-sharing platforms, engaging with the audiences on these platforms is no longer simply an opportunity, but a necessity.
However, this ecosystem offers broadcasters limited monetisation opportunities, reduced audience data and worse attribution than the more lucrative broadcast TV model.
In this fragmented media landscape, broadcasters must maximise their digital reach and exploit incremental revenue opportunities, although linear channels and owned-and-operated platforms will continue to provide the bulk of revenues.
On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce.
With over 550 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation, and infrastructure will impact the future of the industry.
This is the edited transcript of Session Four, covering: news publisher growth, the way forward for UK telecoms, regulation, and closing remarks. Videos of the presentations will be available on the conference website.
On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce.
With over 550 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry.
This is the edited transcript of Session Three, covering: public service broadcasting and its path to a digital future. Videos of the presentations will be available on the conference website.
We forecast broadcaster viewing to shrink to below half of total video viewing by 2028 (48%)—down from 64% today—as streaming services gain share of long-form viewing time.
On the key advertising battleground of the TV set, broadcasters will still retain scale with a 63% viewing share by 2028, even as SVOD and YouTube double their impact.
Short-form video will continue to displace long-form as video-first apps (e.g. YouTube, Twitch, TikTok) gain further popularity and others (e.g. Facebook, Instagram) continue a relentless pivot to video. This will expand the amount of video watched and transition habits—even amongst older demographics.
BT’s revenue and EBITDA growth fell in the December quarter, with consumer broadband in particular suffering from weakening volumes and ARPU, as last year’s price rise benefit wanes and broader macro pressures hit.
Openreach, however, had an improved quarter, with the broadband market returning to growth, full fibre build and take-up progressing at or ahead of expectations, and the altnet threat fairly subdued.
Inflationary price rises in April will give a temporary fillip, and likely help drive a decent 2023/24 for Group financials, but it will take much longer for full fibre benefits to really be felt.
This report is free to access.
Cross-party support for an 11th hour amendment to the Online Safety Bill’s Commons report stage has forced the Government to agree that a new criminal liability for tech executives will be added in the Bill’s passage through the Lords.
The proposed amendment cites faulty precedents, including in financial services, and a new, not yet established Irish online safety regime that is lengthy in procedural steps before criminal sanction.
The introduction of criminal liability will not strengthen the safety objectives of the bill. It is at odds with the approach of the wider regulation, and is practically unworkable.