RedBird IMI will sell its claim to own the Telegraph Media Group (TMG) due to the public interest test it was set to fail, with the Spectator also back on the block
TMG surpassed a declared goal of 1 million subscribers by the end of 2023, motivating our forecast of 4% revenue growth for FY2023 to reach £265 million
The buyer of the Telegraph is likely to face an intervention on public interest grounds from the Secretary of State—a hurdle that could dissuade many bidders
News UK and DMG Media’s joint venture to combine their printing operations has been given the green light by the Competition and Markets Authority (CMA), concluding the supply of services to third parties would not be adversely affected
The CMA concluded that the printing operations of the two publishers were not particularly close competitors for third-party customers. Geography and spare capacity—as we have long argued—were far more influential factors
The CMA’s green light is a timely reminder of the importance of industry collaboration for the profitability of the news industry’s print era, with useful indicators for the evolving online market
The US is intent on preventing the CCP’s goal of AI supremacy by 2030, banning exports of advanced AI chips to Chinese companies. So far, these bans have largely been shrugged off to create a new commercial dynamic in the region.
Huawei wields a de facto monopoly on the manufacture and sale of advanced chips in China. Huawei also sells cloud services globally and threatens Apple's $70 billion in Chinese revenues through its premium handsets.
China’s AI regulation is highly supportive of the training and deployment of Chinese-language LLMs developed by tech platforms, startups, and device makers, with meaningful revenue gains only appearing by H2 2024.
Streaming profitability beckons, but owes much to the profitable services folded into companies’ DTC segments alongside the headline streamers.
There is a broader move towards bundling and price rises. The former bolsters subscriber additions and lifetime value but is ARPU-dilutive, while price rises will bump up both ARPU and churn.
2024 marks the first year with multiple players at scale in the ad space, as Prime Video entered the market. Other streamers with high CPMs and lower scale may be forced to re-examine their offerings.
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.
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.
Sony PlayStation’s next CEO will have hard decisions to make: compete against a resurgent multiplatform Microsoft, or retreat and defend an increasingly rickety PlayStation console model.
New gaming hardware will have an outsize influence in the year ahead, giving gamers unprecedented choice, starting with XR headsets and continuing to a likely new Nintendo Switch.
YouTube’s foray into browser-based games will be the service to watch in 2024. If successful, streaming services, including Netflix, will be on track to become heavyweight game platforms.
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 UK print media sector is facing escalating input cost inflation. Newsprint prices are 50% higher year on year in Q4 2021, noting that prices in 2020 were exceptionally low on soft demand. Based on 2019 rates, prices could be 25% higher in H1 2022. The squeeze on margins for print could destabilise the economics of supply overall.
Newsprint inflation is being caused by soaring costs of recycled feedstock, exacerbated by the monopoly of a single supplying mill in the UK after years of attrition. Imports remain substantial, but impaired by the EU-wide crisis in the supply of paper products, alongside bottlenecks at points of entry to the UK.
Although less significant a factor than paper in the cost of printing the news, electricity cost inflation is another worry for printers, noting that these costs were again also exceptionally low in 2020. Wholesale electricity prices surged by 80% in 2021 (Ofgem), due to pressure on gas supplies from Russia, and the global energy crisis, which will persist into 2022.
Facebook has been caught unawares by the significant impacts of privacy changes to its advertising revenue, posting an uncharacteristic quarterly decline as its costs are set to spiral
Facebook’s ageing user demographics are a long-standing and growing issue, as competitor platforms erode Facebook’s attraction to the young. Recent negative PR only compounds a brewing problem of relevance as social media shifts towards being content, rather than network-driven
By pinning its name to the metaverse, Facebook hopes to redefine its narrative and claim the benefits of managing the platform of the future, but significant challenges in the entertainment, enterprise, and tech spheres stand in its way