Market revenue growth improved to -1.4% in Q1 2021, a partial recovery being better than at any point in 2020, but still worse than at any point in 2019.
Next quarter the sports channel suspensions will lap out, driving strong (but temporary) year-on-year growth.
Longer-term revenue growth recovery will need backbook pricing pressure relief, which will start in Q2, and demand for ultrafast broadband.
As private sector employers faced an unprecedented degree of uncertainty, the volume of vacancies fell 60% from 2019 to 2020, driven by the arts & entertainment, food & hospitality and retail sectors, leading expenditure on recruitment advertising to fall by 32%.
In 2021, vacancies for temporary placements are surging as society proceeds to unlock, with the near-term labour market tight, boosting expenditure on recruitment. Our concern is the masked unemployment in B2C sectors that will emerge should furlough end on 30 September.
Judging by global revenue trends in FY2020, professionally-oriented networking platform LinkedIn gained from demand for hiring served by paid-for listings, also filling demand for events. Indeed, which serves the high-volume but lower-value end of labour markets, with a less fruitful budget and cost-per-click model, suffered mild revenue decline.
BT ended a very challenging 2020/21 financial year with its worst quarter yet for EBITDA growth, as the third national lockdown impacted mobile, offices, pubs/clubs and installation revenue streams
There are many turnaround drivers ahead though, including price rises, backbook effects annualising, lockdown effect reversals, and full fibre benefits, but returning to revenue growth by the end of the year still looks challenging
The acceleration and expansion of fibre build is very positive in our view, but BT has given no guidance on the future benefits aside from capex returning to normal levels, which is doing it no favours with investors
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
After a strong post-pandemic rebound, Sky has the opportunity to leverage its strong reputation with consumers to meet the challenge posed by new competitors and the studios’ direct-to-consumer transition, establishing Sky Q as the ultimate gatekeeper of video subscription homes.
Sports rights costs in Germany and Italy have been cut significantly, while Sky’s spend on UK Premier League rights will decrease in real terms. Savings will ease the financing of the shift to original content, which, associated with owner Comcast’s NBCU output, anchors the aggregation strategy.
Fibre deployment in the UK and Italy presents a subscriber and revenue growth opportunity, and underpins the gradual shift away from satellite to online content distribution.
A move away from premium sport is long overdue from BT, with there having proved to be little strategic, 'halo' or other cross-over benefit to its core broadband and mobile businesses.
BT Sport has managed to dramatically increase its pricing since launch, with little evidence of significant net subscriber leakage, which has driven 'standalone' profitability and allows a partial or full sale.
A sale would not likely cover BT's full losses to date, but a partner could enhance the value of the asset, and an eventual full sale would reduce risk for BT and enable it to fully focus on its broadband and mobile core businesses.
Apple is bringing in privacy changes on iOS that could hurt ad-funded apps.
Responding to platforms’ legitimate push for user privacy is a trial for regulators in the midst of building new online antitrust regimes.
Antitrust rulings are chipping away at the App Store’s stringent terms of use, but reforms will keep it at the centre of the iOS universe.
Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.
Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.
Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.
Market revenue growth sunk back to -3% in Q4 from -2% in Q3, with further backbook pricing and lockdown effects to blame .
Backbook pricing will improve with numerous price increases announced, but these will only start to take effect in Q2 2021.
Demand for broadband and ultrafast looks promising, but will also take time to filter through to revenue, with Q1 again lockdown-affected.
Facebook emerged from 2020 reporting record revenue growth of 22% over the year, built on its huge volume of usage, its simple buying tools and its trove of first-party data.
Facebook’s ability to match third-party data for targeting and attribution is also central to its success. However, Apple and Google are restricting data-matching tools like third-party cookies and mobile IDs, and Facebook is moving to minimise the damage.
Facebook is trying to turn its sites into storefronts by launching ‘Facebook Shops’. It is also taking public stands on the use of data for advertising, and on the need for brand-building in marketing plans. These are conversations all advertisers and media owners should be engaged with.