With viewing to traditional broadcast TV continuing to shrink rapidly, especially among under-45s, our latest forecasts revise a new low for broadcasters’ audiences: falling to just half of all video viewing in 2027, down from 63% today

Long-form, broadcast-quality content will increasingly be viewed on SVOD-first services (e.g. Netflix, Amazon, Disney+) as online habits solidify, especially among older audiences. Platforms offering different content (e.g. YouTube, Twitch, TikTok) will continue to grow their share and will also expand total watch-time

We forecast that under-35s will spend just a tenth to a fifth of their video time with broadcasters’ traditional long-form content five years from now, versus a third to a half for 35-54s and 85% for over-65s

With major studios arguably over-indexed on SVOD, the stickier experiences of interactive entertainment and the metaverse will eventually form a critical pillar of studio D2C strategy, boosting subscription services and tying in closely with consumer products and theme parks.

Disney’s appointment of a Chief Metaverse Officer is good first step, demonstrating a strategic interest in the space. But other major studios remain cautious and distracted, with limited capability beyond licensing to engage in the metaverse for the next 24 months and possibly longer.

Meta will need to provide a strong guiding hand creatively and technically to ensure its new partnership with NBCUniversal is a success, and to evangelise the metaverse and its revenue model across the Hollywood studio content space.

The pandemic years boosted many businesses selling services on subscription in the UK: work-from-home gave people more time and money to widen the services they enjoyed in the home, such as gaming, entertainment and music, also boosting engagement with trusted news

The cost-of-living crisis dented the number of subscribers to OTT SVOD and news services in Q2 2022. Broadband and mobile are must-have; bundles of services (e.g. Sky’s pay-TV and broadband or mobile) are more resilient; yearly and multi-year contracts prevent churn relative to monthly contracts; and services that cater to passions (e.g. football) are always need-to-have

Subscription (or supporter) media and news services reaped the demand for trusted news through the pandemic, but now face a tough challenge to their toplines from the economic downturn—and also to transition to a sustainable business model for media audiences, while advertisers are also feeling the heat

Market revenue growth continued to accelerate in Q2 to reach 3%, but broadband growth worryingly dipped as the lockdown boost waned.

Differing pricing dynamics (among other factors) led to very different outcomes for the main players, with BT’s growth surging to 7% while VMO2’s revenue stayed in decline.

Underlying trends of weakening broadband growth, keener pricing and customer bargain seeking point to slower growth ahead … until the next price increase.

Revenue decline accelerated in Q2 as the cost-of-living crisis appears to be impacting UK sales, but profits remained strong thanks to last summer’s Continental sports rights reset

In Italy, DAZN will return on Sky’s platform just in time for the new Serie A football season, filling a key gap in its aggregation strategy

Looking forward, thanks to its enhanced profitability, Sky has the flexibility to respond to the economic downturn using pricing and content

BT Group’s revenue growth surged in Q1 to 1%, the first time it has been positive in five years, with a stronger than expected boost from the April price rises partially offset by the Virgin Mobile MVNO loss.

EBITDA growth, however, actually dipped to 2%, with little operating leverage due to cost pressures, although the company is still very confident in its full year EBITDA guidance (which implies 4% growth).

BT is far from immune to macroeconomic pressures, with pressure on costs, corporate revenue and signs of a sharp dip in broadband market growth, but it is well placed to deal with them given strong growth at Consumer and Openreach.

UK altnet full fibre rollouts are accelerating, with an aggregate build pace close to that of Openreach, but customer acquisition is not growing at the same pace, and overbuild in the most attractive areas is becoming a significant issue.

Altnet business models remain challenging and are getting worse as Openreach builds out, and (although there are some notable exceptions) most will need to rapidly achieve scale and turn around their performance to survive.

Consolidation is very likely, along with business failures, and while some market share loss for Openreach looks likely as serious scale players emerge, the downside is limited, and even more so for retail ISPs.

Reportedly, BT Sport is about to seal a deal to extend its coverage of the revamped Champions League until 2027. Amazon is going to step in with a weekly game, and the BBC will get the rights to the highlights.

In France, Canal+ has outbid Amazon to claim the full rights package thanks to a bid that has grown the total value of the rights by 28%.                                  

With Canal+’s football content secured, the upcoming Ligue 1 auction may struggle to find bidders, a fate threatening other short-sighted leagues.

The market looked superficially healthy in Q1, with revenue and broadband volume growth both maintained at 2%.

However, net adds trends suggest that consumers are becoming more bargain seeking, and prices have become more competitive into Q2.

The April price increases will support growth in the short term, but this boost may not last long if the cost-of-living crisis persists.

BT’s Q4 was mixed in the detail, with consumer broadband volumes weakening but FTTP roll-out and adoption surging, with performance at the Group level solid enough.

The April price increase has reportedly landed well, strongly supporting BT’s guidance for revenue and EBITDA growth in 2022/23 with no other improvements required.

The macroeconomic environment continues to weaken, affecting BT and its premium brands in a number of ways, but it appears to have enough room in its guidance to weather this storm.