The UK’s ‘zombie’ economy—largely flat since March 2022—is due to the cost-of-living crisis weighing on households, with this exacerbated in 2023 by the rising cost of credit. Real private expenditure growth will be weakly positive in 2024 before strengthening in 2025 as headwinds recede

Our 2023 forecast of a nominal rise but real decline in display advertising was realised, with TV’s revenues falling while digital display rose. Advertiser spend online is justified by the channel’s size and growth, worth an estimated £406 billion in 2023

For 2024, much lower inflation and mildly positive real private expenditure growth points to 3-4% display advertising growth, with a stronger recovery anticipated in 2025

Market revenue growth was robust in Q3 at 1.4%, but heavily supported by price rises whose effect will wane over the next year.

Broadband net adds remained negative, with pay TV and telephony more negative still, mainly thanks to strained consumer finances.

Declining volumes and waning price rise boosts are likely to lead the market into decline next year, with a recovering economy needed to reverse this.

CEO Bob Iger has announced that Disney is now in a "building" phase—indicating that the strategic turnaround is complete—however, upcoming breakeven of  streaming products owes much to cuts on programming spend

With the rest of Hulu soon to be acquired, Disney looks as if it is pulling out of India—this will make the company's presence outside of the US even more peripheral

In the UK, Disney+'s advertising-supported tier is now live, however, there are forces at play that limit Disney's ability to execute its tiering strategy as effectively as its biggest streaming competitor

Unable to match Netflix, financially-pressed Hollywood studios are cutting content output and reassessing the DTC model

Price rises are being forced through, however for challengers this is asking a lot from subs, who don’t see an improvement in product or usage

The corporate landscape is fluid—loss-making DTC platforms and revenue-plunging linear channels are candidates for M&A

Market revenue growth surged to 2% in Q2, but entirely-and-more driven by price rises, with underlying trends negative across volumes and ARPU.

Broadband volumes in particular turned sharply negative, largely due to a post-lockdown hangover combining with weak economic conditions.

The outlook is bleak: price rise benefits are set to wane and then reverse, and weak volumes will feed through, with economic recovery needed for a return to sustainable growth.
 

Thanks to Parks (+11% YoY, $2.43 billion), Disney's Q3 operating income remained flat, balancing the decline from Media and Entertainment (-18% YoY, $1.13 billion) as DTC only lost $512 million and linear dropped by 23% ($1.89 billion). No new major growth initiatives were announced but Disney will look to stem DTC losses through Disney+ price rises and a password sharing crackdown.

Major segment resets are looming as Disney looks for new partners for ESPN and possibly buyers for its legacy TV business, ABC.

A difficult remainder of the year will be prolonged if the Hollywood talent unions strike into the autumn and beyond, while Bob Iger stays on as CEO through 2026.

Electronic Arts’ earnings for Q1 2024 delivered strong annual growth across its licensed franchises but also a worrying lag in mobile game revenue due to mobile sector challenges.

EA’s global dominance of sports-based games, and its 700m users, make it a strong candidate to be a ‘strategic partner’ with Disney for ESPN’s reboot as a direct-to-consumer service.

The launch of EA Sports FC24 next month finally sheds FIFA from EA’s largest franchise and promises a dynamic approach to managing football partnerships, but no word on increased margins.

Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.

Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).

A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.

Channel 4 was resilient in 2022: highlighted by a 2% YoY drop in total revenues after a record 2021, a quickly growing digital business and a new high for content spend

With privatisation now off the table, in its draft form the Media Bill presents new opportunities and challenges: an “appropriate degree of prominence” on smart TVs and devices, the option to produce content for the first time, and a “sustainability duty”

The effect that these might have is murky without a body of interpretation and mediation, and indeed execution—it appears uncertain whether Channel 4 would begin to produce, with the optics concerning indie producers tricky and accumulation of the required operational skills a long process 

Success was never going to be defined by profitability for GB News and TalkTV, at least in the mid-term. So far this has been borne out, with revenues small and viewing confined to niche audiences.

The two recently launched channels have become part of the broadcast news environment while diverging from its traditions. Their emphasis on opinion and commentary over news and analysis has influenced news agendas, political discourse and the TV news landscape more than their viewing figures suggest.

Now that the fairly elastic (and previously untested) boundaries for due impartiality set out in the Broadcasting Code are being stretched, it is only right that Ofcom look at them more closely. Although some change is to be expected, TV news' integrity as a highly trusted medium should be preserved.