After a quarter coloured by big, returning series Netflix now has just shy of 104 million subscribers worldwide, with, for the first time, the majority living outside the US
Content expenditure continues to dazzle with $4.2 billion spent in the first half of 2017. Negative free cash flow looks set to hit $2.5 billion for the year, with large upfront payments for self-produced and commissioned content coupling with rights acquisition expenditure to create a library of programmes that necessitates continual subscriber growth
Current international growth is small considering the magnitude of the opportunity, revealing the difficulty of creating sizeable customer bases outside of the West, where competitors are cheaper, US programming less desirable and internet access comparatively limited
The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results
Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising
Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse
The debate over the entitlement of free-to-air PSBs to retransmission fees from pay-TV platforms has simmered for the last few years, yet promises to boil over once the Digital Economy Act 2017 (DEA 2017) comes into force; as expected in late July/early August
The repeal of section 73 of the Copyright Designs and Patents Act 1988 (CDPA 1988) has removed a barrier to negotiations between the PSBs and the cable operator Virgin Media over retransmission fees, seen by some as the thin end of a wedge for obtaining such fees across all pay-TV platforms
However, pressing for retransmission fees could have the opposite effect of what the PSBs – in particular the commercial PSBs – wish for, threatening as it does to undermine the principles of universality and free access at the point of use, so long the bedrock of public service broadcasting in the UK
Secretary of State (SoS) Karen Bradley has made an initial decision to refer 21CF’s bid for Sky to the Competition Markets Authority (CMA) for a detailed consideration of media plurality concerns, to be finalised in the near future
The issue at hand is the potential increase in the influence of the members of the Murdoch Family Trust (MFT) over the UK’s news agenda and political process. The SoS rejected the remedy for Sky News brokered by Ofcom
Ofcom’s non-negative decision on the fitness and propriety of 21CF to hold Sky’s broadcast licences cleared another hurdle in the event the merger is finally accepted
Tinder is one of the most high-profile mobile apps on the market and has transformed the adoption of online dating
Tinder’s success is due in large part to its understanding of user experience, which is key to getting, keeping and upselling users through network effects
But the financial value of this success is limited by the industry: even a mobile revolution has not created a high-revenue mass market where none existed before
In February 2016, the BBC moved its youth-focused channel BBC Three out of the broadcast sphere and into an online-only delivery system, as part of plans intended to find an extra £100m in savings laid out in 2014
The new service would aim to continue fulfilling the channel’s remit of delivering innovative and diverse content to a key audience of 16-34s, but with greater emphasis on short-form and various more digitally focused formats
Now, more than a year on, the effort shows the difficulty traditional media brands have in adapting to space occupied by niches that primarily digital brands have carved out, although the ‘channel’ still manages largely to deliver on its remit with much of its original content
In contrast to print coverage, most shared news and opinion content on social media was decidedly pro-Labour this election season, with fake news relatively non-existent compared to the US election in November
Facebook’s role in news distribution has steadily grown and now rivals Google’s, but only a half of the UK’s electorate are active users – for the platform to become decisive in political news would require much stronger turnout among young voters
Facebook was the chief digital ad platform for both main parties, with Conservatives targeting Labour seats, Labour defending them and both adopting a negative tone
After a US debut, Amazon’s marketplace of SVOD services arrives in the UK and Germany, but without the major draws of HBO and Showtime
Unbundling SVOD for premium content strengthens Amazon’s position in the fast-developing connected TV landscape, where Prime Video is taking on Netflix, NOW TV and YouTube
For niche content providers, Amazon Channels provides a new, low-friction route to go direct-to-consumer with a mix of live and on-demand premium content alongside existing distribution strategies
The launch of BBC Studios - the relocation of most of the broadcaster's in-house production capability into a commercial subsidiary - gives it the ability to compete for work elsewhere at the expense of a guaranteed quota at the BBC
The upside is large, with the opportunity to retain an increased amount of intellectual property, a requirement of growing importance. However, so is the risk, with sustainability dependent upon a major cultural shift; from comfortably retained provider to competitive production engine
Outside of a weak track record when competing for work, other entwined issues must be overcome for success in the medium term; demonstration of transparency in the commissioning process and watertight transfer pricing practices, and the dispelling of state aid concerns
Media reports of ads by top brands appearing next to extremist content on YouTube have surprised advertisers and led to a barrage of criticism from other media companies, agencies and the UK government
Despite several advertisers pausing spend, the revenue impact for Google is likely to be small in the short term – but the debate is a symptom of ongoing tension between “frenemies”: large agencies and Google & Facebook
By urging Google alone to educate display advertisers and filter campaigns, agencies risk ceding more of their client relationship to the advertising giant, while calls for the platform to make all editorial judgements on political content are inappropriate