The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face. 

Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.

Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.

The CMA's provisional findings on the Vodafone/Three merger reiterate its concerns around the impact on the retail and wholesale market but its previous issues regarding mobile towers sharing with BT/EE have been satisfied 

Crucially, the CMA seems somewhat dismissive of structural remedies, although hasn't ruled them out entirely. Remedies sought in the form of network and pricing commitments seem somewhat unnecessary, but nonetheless workable 

We now expect the Vodafone Three merger to gain approval in December, with remedy detail negotiated over the coming months—a very significant positive development for the sector 

Service revenue growth dropped off by 2.7ppts this quarter, and into negative territory, as operators in all markets suffered weaker growth
 

Operators in France and the UK implemented price increases this quarter but re-contracting absorbed any positive revenue impact. In Italy, regulatory intervention thwarted operator plans to raise prices
 

Increasing competitive intensity in France and Germany comes at a time when operators can ill-afford ARPU dilution and high churn
 

SpaceX and its Starlink satellite network have made headlines dangling a vision of free emergency service coverage direct to all mobile devices, undoubtedly connected to its ongoing battles for FCC approval.

Starlink is the clear leader in the D2D space and almost certainly will be the first to launch its service. AST Space Mobile, backed by various mobile operators (including Vodafone) is lagging significantly behind, having not yet launched any commercial satellites.

The UK is however a relatively unfavourable geography for D2D, due to its high latitude and relative density, and we don't expect any launch of commercial service in the UK by Starlink or AST Space Mobile before 2026.

In the past, broadcast TV and YouTube content has been poles apart—both in substance and the need states they served. This is changing, with the overlap in offerings growing 

We estimate that c.61% of viewing of YouTube Trending content is of videos that could be considered TV-like. Similar programming makes up c.35% of broadcast TV viewing 

YouTube’s videos are also becoming longer, raising audience tolerance and expectations, and allowing the service to compete in a broader range of genres. However, this will be challenged by monetisation limitations

We forecast broadcaster viewing share to drop to 52% in 2030 (from 58% in 2023), with the firming of its on demand viewing unable to balance out the decline of live: this is a slight improvement on our past estimates, with decline slowing.

SVOD viewing will begin to plateau in 2025, as video sharing platforms (YouTube, TikTok, Twitch) take an increasing share of engagement.

On the TV set, YouTube will grow strongly: we predict a 90% increase from 2023 to 2030. This is from a low base with broadcasters retaining 70% of viewing on the main screen in 2030

The UK’s choice of policy for rebalancing the relationships between news publishers and tech platforms is on the agenda of the CMA’s Digital Markets Unit for 2025. The UK is expected to steer clear of the pitfalls of Canada’s news bargaining regime, which led Meta to block news, crashing referrals.

In the UK, Google’s relationships with news publishers are much deeper than referrals, including advertising and market-specific voluntary arrangements that support a robust supply of journalism, and dovetail with the industry’s focus on technology (including AI) and distribution.

The rise of generative AI has also ignited the news industry’s focus on monetising the use of its content in LLMs. AI products could threaten the prominence, usage and positive public perceptions of journalism—this might require progress in journalism’s online infrastructure, supported by public policy.

Off the back of the Euros, ITV’s advertising revenue grew in H1 (+10% to £889 million) but this was not enough to balance a drop in Studios revenue, which declined 13% (to £869 million), hit by phasing and a tough market

Nonetheless, profits were up on a very tough 2023, with group adjusted EBITA rising 40% to £213 million, as cost-cutting proved successful—total costs were down 7% YoY

ITVX is moving from its launch phase to one of consolidation, with a changing approach to content release and an increasingly nuanced relationship with its array of users

Google has permanently shelved the 2025 deadline for removing all third-party cookies from Chrome, but publishers should prepare for much higher rates of users blocking cookies. 

The online economy is still moving towards more privacy and user controls on the major platforms, with Android the next target for the Privacy Sandbox. 

Regulators are increasingly setting the terms online, limiting Google's freedom of movement, and with the conflict between competition and user privacy protections defining the next phase of the internet.

Service revenue growth was broadly flat at 1.7% as improvements in Germany offset weaknesses in Italy.

The impact of price increases has been mixed, with subscriber losses dulling their upside, and the mixed picture looks set to continue into Q2.

The market continues to be challenging with elevated competition at the low end, pressure from some regulators to increase network coverage, and a somewhat soft EBITDA outlook.