2014 saw a fall in profits as BSkyB absorbed the £217 million step-up in the annual cost of PL rights and invested £60-70 million in accelerating growth in its connected offerings, but with strong underlying revenue growth pointing to a resurgence of profits in 2015

The annual results release was over-shadowed by the news of BSkyB’s proposal to create Sky Europe through the acquisition of 21C’s shares in Sky Deutschland and Sky Italia, where it sees great opportunities for revenue growth and cost synergies

Taking on a large increase in debt to finance the acquisitions when the next PL auction is about to strike sends out the message that BSkyB management is confident about the state of its business, has a clear view about the value of PL rights, and will not be side-tracked from the pursuit of its broader strategic objectives

After a three-week long “messy and opaque” high drama auction Sky retained its broadcast rights for all Italy’s Serie A games for 2015-18 with a negligible 1% price increase.

Its rival Mediaset managed to keep hold of the top fixtures, but its coverage shrinks by 18% whilst paying 35% more. A deal earlier this year for the Champions’ League rights will add considerably to Mediaset’s total costs.

In the stagnating Italian economy, Sky may manage a return to more comfortable profitability. Mediaset’s pay-TV business model looks much more challenging, even if a new investor were to be lured in.

Strong growth in the UK economy has created a very positive short term outlook for display advertising, with TV Net Advertising Revenues (NAR) expected to increase by 5% in 2014.

That bright prospect is nonetheless overshadowed by online video advertising, where 2014 is expected to add almost £200 million to the estimated £300 million spent in 2013. YouTube is leading the way, but the TV broadcasters also stand to benefit.

All the indicators point to yet more rapid growth in online video advertising over the next three to five years. So far it has had little apparent impact on TV NAR, but this should change from 2015 as TV and online video become more closely meshed.

The ongoing digital migration and the resulting audience fragmentation have led to rating losses at RTL and ProSieben, but with the latter retaining its younger viewers. From a low base global operators are gaining share

Leveraging their high market shares within a benign economic environment means RTL and ProSieben are in a position to withstand the increasing competition. ProSieben has been more active in developing diversification businesses – on which we have mixed feelings

The main extra growth prospects are in the distribution fees charged to TV platforms for HD channels, allowing a progressive shift to a mixed funding model

Amazon has entered the increasingly crowded digital entertainment TV device marketplace, one which could be strategically more important for the ecommerce giant than tech rivals Apple and Google

The frictionless integration of entertainment and ecommerce on TV represents a bigger consumer milestone than competitor services are offering, and Amazon’s brand has huge appeal, though at present it has less market traction for streaming than it does for other products

Content owners and broadcasters remain the real TV gatekeepers, with integration of TV and digital a service-level pipe dream for now, and so Amazon will likely have to accept being one of many, rather than the runaway winner as it is in books

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. This report provides edited transcripts of the talks given by six of those speakers: Sir Martin Sorrell, WPP; Gavin Patterson, BT; Andrew Griffith, BSkyB; Thomas Rabe, Bertelsmann; David Dyson, Three UK; David Abraham, Channel 4

In 2013 Sky focused on recruiting ‘quality’ subscribers: net additions fell but ARPU growth accelerated and most new customers have signed up to two-year contracts, which will lead to a reduction in churn

Now Sky is moving its focus back to subscriber growth. It aims at 400-450,000 net adds this year, including the migration of wholesale DTAG customers – a target we find realistic. The €70-90 million EBITDA guidance may be conservative

Without any direct competitor, Sky is rightly enhancing its all-in-one premium appeal. This supports ARPU growth and increases its distinctiveness compared to other providers, including the expected Netflix launch in Germany

Explosive growth in take-up of smartphones and tablets means that the effective size of the internet will increase by several multiples within the next few years. This transformation in scale comes with a major change in character and operating dynamics, creating new opportunities and revenue streams.

Twitter is unique amongst social apps: it gives new users a blank canvas in which they can (and must) create their own social network reflecting their own interests, hence building an ‘Interest Graph’, but onboarding new users remains a challenge.

Revenue at Twitter is now on a $600 million annual run-rate, scaling rapidly since the introduction of ‘native ads’, and seems set for further growth: the key question is whether it can achieve breakout user growth and mass market scale.

Non-subscribers can download this report in full - alongside all our other coverage of the BBC during the Charter Review process - from the 'BBC Charter Review' page of our site.

The Charter Review of the BBC officially opened with the Culture, Media and Sport Committee’s inquiry into the Future of the BBC asking the question “What should the BBC be for and what should be the purpose of public service broadcasting?” The only obvious answer is that the BBC and public service broadcasting should be for the people of Britain, and the BBC rates highly on different measures of public and audience engagement. The BBC plays an irreplaceable role in the supply of PSB programming that UK audiences appreciate, most importantly news, where the BBC accounts for 70% of TV news time and for 22% of online news time in 2013.

The stress on 21st Century Fox’s Italian pay-TV platform is easing as the worst recession of any G8 country is expected to end in 2014, and competitive pressure from Mediaset is weakening

Sky is sticking to a long term strategy, investing in the (unrivalled) quality of its offering and sustaining high recruitment costs. The subscriber base seems to have levelled off, revenues are stable, but profits have collapsed. Management plans cost cuts to raise profitability by 2016

The upcoming auction for the 2015-18 football rights could see Sky gaining more exclusivity at a higher cost, which it would have to recoup mostly by rising prices. The key potential upside resides in an Italian economic upturn – which is only conceivable in a few years