The games industry, with the potential to become the world’s largest media and entertainment sector by revenue, is undergoing profound transformation.
The consolidation of major developers is a response to a revenue model pivoting toward subscription, with direct consequences for those already in the subscription space: film, TV and music.
A technology-led creative medium, with an audience approaching three billion gamers, is seeing its franchises become more valuable and useful than ever.
UK news publishers have rushed to distribute content on TikTok. They are drawn by its enormous young audience, but poor monetisation and data sharing, a lack of referrals to their own sites, and data security concerns are frustrating a full embrace of the platform.
TikTok is increasingly identified as a ‘news source’ by young people: a risk to publishers distributing content on the platform is that their brands may get lost in user feeds.
Publishers should view activity on TikTok as a strategic cost instead of a revenue source: an investment in brand awareness, and development in content and delivery formats that are becoming more widespread across platforms. Brand visibility is key to success here.
ITV’s external revenues increased 8% in 2022, driven by a big boost from Studios (+19%, £2.01 billion) with COVID overhang now appearing to be a thing of the past. Total advertising revenue (TAR) was down just 1% on last year’s record highs
ITVX had a successful launch, leveraging big audiences for the World Cup to drive awareness and use of the service. We will have to wait and see what effect ITV’s aggressive new content windowing strategy will have on linear viewing
Guidance is that Q1 2023 TAR will be down 11%, with April down between 10% and 15%. TV advertising should recover later in the year, but we are forecasting that the total market will be marginally down
Microsoft’s planned acquisition of Activision Blizzard is in trouble. US, UK, and European regulators may make the deal impossible for Microsoft—and a disaster for Activision and the wider industry.
Sony’s late improvement in PlayStation 5 sales is only just enough to reach its target numbers for the year. It needs a more dynamic approach to a rapidly changing industry, and a less dogmatic message to consumers and regulators.
Netflix Games is more than a trial—it’s on track to become a major games platform.
On 1 October, Google CEO Sundar Pichai announced $1 billion for worldwide news publisher partnerships for a novel News Showcase product, helping them to distribute their content to a new audience.
It is an important milestone: for the first time Google will pay publishers to curate content in the Google News app (initially), and to provide unpaywalled access to articles on publishers’ websites that users can click through to.
In so doing, Google is defusing the simmering conflict with publishers in major markets, and showing policy-makers its willingness to collaborate with a news industry facing existential threats.
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.
ByteDance is rushing to sell a 20% stake in TikTok Global to Oracle and Walmart at an enterprise value of $60 billion. TikTok otherwise faces a ban in the US on 12 November, subject to legal challenges.
The sale hinges on ByteDance obtaining approval from China to export TikTok’s core technologies. China updated its export control rules to include algorithms (and AI), entrenching a tech cold war with the West.
TikTok has confounded regulatory woes in India and the US, and renewed competition from US tech, to post dizzying user growth in every major internet region where it is available, casting off its image as a niche youth product and entering the mainstream.
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.
Following deadly border clashes between the 15th and 16th June, the Indian government has taken down 59 Chinese apps including TikTok, accusing them of illegally mining user data
India is TikTok's biggest international market, accounting for half of all users outside China. Chinese apps made up 38% of all app installs in India last year, second only to domestic apps
The India-China rivalry may spill over into more sectors as reports suggest India is reconsidering Huawei’s role in its 5G infrastructure plans. A ban would provide a fillip to US influence in the country
ITV TV advertising was down 42% in April, better than expected—but there was no Q2 guidance. We believe ITV has outperformed the market, aided by large audiences, with 22 programmes with viewing above seven million, double the number over the same period in 2019.
The TV production stoppage hits ITV in two ways—leaving gaping holes in the schedule and cutting ITV Studios revenues. ITV Studios revenue was down 11% in Q1 (£342 million), with no guidance given for Q2 when the production shutdown will really come into effect and likely devastate previously expected revenues. ITV note that demand for library content is up, however, although much higher margin, this will only go a small way to offset lost production revenue.
The Love Island cancellation is a major blow, with the benefits that the format brings ITV—youthful, simultaneous, easily-monetisable, cross-platform engagement for six nights a week for over two months, akin to a major sports tournament that ITV owns—lost. But BritBox use and subscriptions are both up.