• The Commission proposes to require VOD services to implement a 20% share of EU works in catalogues, which Netflix already largely meets
• More impactful is the EU’s proposal for OTT SVOD services to provide access to the home service when subscribers travel in the EU, benefitting the UK’s 14 million subscribers
• TV broadcasters, which observe a 50% EU works threshold in their linear programming served on TV platforms and online players, will be able to opt-in to portability

Short form video is growing. It is easy to create, share and, with the rise of mobile technology, incorporate within communication

But despite the novel flexibility that mobile technology offers, the actual video most desired is surprisingly traditional

Buzzy, short form content fills gaps that have always existed; yet, despite the hype, it will remain supplementary to long-form programming

On TV, UK public service broadcasters (PSBs) have operated within a privileged ecosystem; a guaranteed electronic programme guide (EPG) prominence placing their channels at the forefront, helping sustain their market share and spawning digital families

But technological changes within the TV set are eroding this prominence, and on devices, such structural advantages are non-existent

To confront dramatically falling mobile engagement, despite consistently excellent content, the PSBs need to collaborate and replicate their privileged linear position or they will struggle against the major SVOD players

Netflix gained 1.8 million accounts in the course of 2015 (+37%) to 5.2 million, surpassing the 1.3 million VOD-enabled homes added by fixed line telcos Sky (including NowTV), Virgin Media, BT and TalkTalk. SVOD homes overlap with pay-TV accounts, and are topping up content for family members, not cord-cutting

Amazon Prime Instant Video, bundled into Prime, looks set to balloon from 1.6 million users in Q4 2015 on the back of the marketing of Jeremy Clarkson's motoring show, cementing its position in home entertainment by serving a family-friendly eco-system of devices and media, leveraging its mammoth 25% share of UK e-commerce

Free-to-the-user YouTube remains the heavyweight with 35 million monthly unique users in the UK, although skewing strongly to Millennials, while those 55+ will take longer to move beyond catch-up TV to embrace a wider range of VOD options

ITV has delivered double-digit growth in adjusted EBITA for the sixth year running, marked by big increases in both TV NAR (Net Advertising Revenue) and non-TV NAR revenues, which now make up nearly 50% of the total

The outlook for 2016 is promising. We expect continuing real growth in ITV family NAR in line with the market average, and further substantial increases in both Online, Pay & Interactive and ITV Studios

The big question is how ITV can sustain all it has achieved with the international expansion of ITV Studios and use its growing scale to support growth in its Online, Pay & Interactive revenues abroad as well as in the UK

Weak Q2 commercial viewing figures fuelled stories that ITV1 NAR could be approximately £100 million lower in 2005 unless audience share rallied in H2 2004. This was due to the Contracts Rights Renewal (CRR) remedy, imposed by the Competition Commission as a condition for the merger of the Carlton and Granada sales houses to create ITV Sales, which now controls over 50% of television advertising sales.

Ofcom produced a tough and rigorous document on ITV licence fee renewals. Although the paper is dense and difficult to understand, we think it is bad news for ITV. The likely licence fee settlement is going to be higher than commentators might have expected six months ago. The prime reasons are Ofcom’s proposed move to assessing the ‘digital dividend’ on the basis of digital viewing, not households and, second, taxing the benefits of the lower costs of the merged ITV business. The first of these is the more important financially since only about 57% of ITV viewing in digital houses is of the digital ITV service.

We have long been sceptical of claims that music download stores like iTunes, combined with hardball legal tactics against pirates, would rapidly turn around the fortunes of the music industry. The wildly successful iPod has driven the growth of digital music downloads, and is expanding the population of music downloaders that pay for music - but not forced a change of heart by file sharers! Music download sales are expanding but not fast enough to balance the decline in physical formats. Globally, we project sales of music downloads of $3.5 billion by 2010, about 10% of the total music market.

The issues surrounding ITV Digital are complex and unclear. This report tries to unpick the tangled threads. It looks at the main financial issues and the manoeuvres with the BBC, the Office of Fair Trading and the set-top box manufacturers.

This note has been prompted by a flurry of activity in UK television media: the renaming of ONdigital (‘ITV Digital’) and its absorption into the ITV mother ship; the launch of ITV Sport, a new pay-TV channel aimed at sports enthusiasts; the impending final results of BSkyB (‘Sky’) on 25th July 2001 (dealt with in a separate note issued on 20th July) and the renewed concerns over the funding of the UK cable companies.

ITV Digital itself stresses the importance of thinking about the 'platform' and its associated channel, ITV Sport separately. ITV Digital and its shareholders, Carlton and Granada, are highly optimistic about the future performance of the platform. We look at each of the many reasons for optimism that they have advanced. There is strength in many of their arguments, but we still see their breakeven target as very difficult to achieve.

This note considers the so-called 'digital dividend' in light of the recent ITV licence renewals.

The UK online population reached 17 million in February 2001, up around one-quarter on the year, on the strength of rising participation of women (to 44% of users) and of young people. We expect 4 million users to be added to the online population by February 2002, to reach 21 million, with growth at a lower rate than in 2000.