Despite two decades of online disruption, the UK remains reliant on traditional platforms and brands across the media sector more so for older cohorts, but also for younger generations
13% of adults still do not use the internet and, in reality, an online only media ecosystem remains a distant prospect
Traditional providers, particularly within TV, radio and news, look set to endure for the long term , aided by the trajectory of the UK’s ageing population
The speeds made possible by full fibre build are unnecessary for most users in the short term, giving limited commercial advantage to those that can offer them, but are likely to prove essential in the medium/long term.
The economics of full-scale, independent alternative networks look very challenging in our view – especially without the support of Sky – although there are some limited arbitrage/cherry-picking opportunities.
The Openreach full fibre model makes economic sense under Ofcom’s proposed regulatory framework, provided it retains the lion’s share of the market, although considerable risks remain.
Recorded music revenues in Japan are stuck in decline as physical sales sag, although 2017 marks the first year when streaming gained a foothold with 8 million subscribers.
J-pop fans spend on 'experiences' with their idols including events, merchandise, CDs and DVDs, which streaming cannot replicate. Top native LINE MUSIC offers integration with a popular messaging app and bundling with mobile.
Serving international repertoire, Apple Music claims more subscribers than Spotify in Japan, which is more localised, and has most users on the free tier. Amazon Prime Music is a looming constraint on the adoption of subscriptions.
Audiobooks are growing fast, driven by smartphone adoption and better supply, as well as interest from people who don’t usually buy books, such as young men
The sector is dominated by the presence of Audible, Amazon’s audiobook publisher/retailer, which has driven growth of audiobooks but put publishers under pressure. Its strategy is a lesson in Amazon’s approach to media
Audio is an opportunity to sell to new customers, but publishers must acquire and use rights responsibly, and experiment while not letting the audio tail wag the print dog
Although launched with an array of public service goals in mind, local TV’s flawed design has created a sector struggling to live up to its optimistic ambitions.
Five years and £37 million of licence fee monies later, it is unclear what public service contributions are being made, or whether the scheme has provided value-for-money. A wholesale review of the sector is urgently needed.
The vision of a “thriving and sustainable” sector has fallen flat. Most licences remain loss-making, with doubts as to their long-term viability. Those operating low-cost models seem best placed to survive.
Spotify is now the world’s first publicly listed on-demand music streaming service. Its global footprint generated €4 billion in 2017 from over 70 million paying subscribers and 90 million ad-funded users across 65 countries
As it expands, the service is steadily but surely moving ever closer to profitability, with a 2019 operating profit a very real prospect
So far and for the near future, Spotify’s global pre-eminence versus competition from Apple, Amazon and Google proves remarkably resilient. Plans to build upon its differentiating features will become ever more decisive as the tech titans will continue to wield their resources and ecosystems against the comparatively undiversified company
UK residential communications market revenue growth fell again to 1.2%, with weakening ARPU growth the main driver. New customer pricing remains flat to down, and existing customers are being increasingly discounted, fuelling the ARPU weakness
High speed broadband adoption is proceeding apace, but the high speed premium is fairly thin, muting the impact on ARPU. Regulated wholesale price cuts from Openreach finalised today and due in April 2018 will not help
Looking forward, the March quarter will benefit from price timing effects at BT and Virgin Media, but we fear that the rest of 2018 will follow the current downward trend and the operators will need to adjust to an ex-growth environment
Children’s media use and attitudes have dramatically changed over the last few years, stemming from the rapid take-up of smartphones and tablets.
Traditional TV continues to decline at the expense of newer video services such as YouTube, Netflix and Amazon, with 43% of children aged 8-15 preferring YouTube videos over TV programmes.
These online services offer content producers wider opportunities, but questions remain around the lack of regulation online, and the recent scandal around children’s safety on YouTube has heightened these concerns.
21CF’s bid for 100% ownership of Sky has been referred for a Phase 2 investigation to the Competition and Markets Authority (CMA), which will decide by 6 March 2018
Third parties Avaaz and Ed Miliband MP complain of the influence of the Murdoch Family Trust (MFT) and family members over the UK’s news agenda and political process
A remedy could insulate Sky News from this influence. The offer of a Sky News Editorial Board at Phase 1 was refused. Third parties will ensure the debate in Phase 2 is very lively
For the second consecutive year, the global recorded music industry body IFPI reported rising trade revenues, growing 5.9% to reach $15.6 billion in 2016
Our forecasts supplement IFPI’s trade revenue data with richer national-level consumer expenditure data from local bodies in core markets, and project CAGR of 2.3% to 2021, tapering off as streaming approaches maturity
This fairly modest topline growth for global recorded music streaming trade revenues is the product of our judgement that the marketplace remains awash with free music. Streaming trade revenue growth could be higher still if the industry finds a solution to piracy through technological or regulatory means, obviating the need for the ad-funded compromise