As Spotify wavers around the breakeven point, the deal with UMG is good news for royalty costs and thus for the likely advent of the IPO rumoured for autumn 2017
Royalty costs will reduce if Spotify reaches the subscriber growth targets that have been agreed – these have not been disclosed, so are hard to track
Question marks persist over whether a two-week optional windowing of new releases on the premium tier will significantly drive upgrades from the free tier
The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium
Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment
2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers
Despite a slowing of circulation decline in 2016, UK national newspaper brands continue to face profound structural challenges, with print advertising spend expected to be down at least -15% for the year
In digital advertising, tech and distribution platforms continue to dominate growth with newspaper publishers and other content producers competing for an increasingly small slice of the revenue pie
In this context, many publishers are turning to paid membership and content subscription models to generate online revenues; success here will require a radical shift in thinking to a retailer mindset that delivers high quality reader experiences through integrated execution of tech, data, marketing and design
Streaming is now mainstream and we predict 113% growth in expenditure on subscriptions for 2015-18 in the top four markets (US, UK, Germany and France)
Free vs paid-for streaming is the central question for the music ecosystem: free yields fractions of pennies, making subscription the only credible business model
Market leader Spotify is facing competition from tech giants Amazon, Apple and Google, with deep pockets, for whom content is a pawn in a larger game
US entertainment groups have not been disrupted by the rise of digital media. Long running franchises drive growth across diverse sectors, starting with pay-TV and SVOD. US television advertising is rising in line with GDP, while the online video ad market is flourishing, with much appearing alongside the majors' scripted content
Studios' cable channels are their most profitable assets, but M&As with distribution platforms, including Comcast's aquisition of NBC Universal, have usually failed to deliver synergies
The Donald Trump presidency could leverage hostile public opinion towards mergers to undermine the AT&T bid for Time Warner; but it could also stimulate M&As if it granted tech companies a tax break to repatriate profits. A more protectionist administration could also bring about a less benevolent attitude towards majors' foreign operations
Whether the US has reached “Peak TV” —the apogeic volume of original scripted series—is debatable, but the mass of content being produced is unparalleled
As television continues its transition from a disposable medium to a permanent one, and an increasing number of outlets are creating original, scripted programming to keep up or differentiate, does this American explosion have ramifications for the UK consumer or broadcaster?
Simply put, the UK’s more concentrated television landscape limits exposure. And, counter-intuitively, an unsustainable focus on scripted drama could play into the hands of the traditional broadcasters, whose future strength may lie in the diversity of their offering
Music publishing revenues are trending up in a broad sustainable manner across the US, Europe and Japan, underpinned by longstanding music rights regimes
Purchasing is down and streaming taking off, driving a mechanical to performance transition, with direct licensing of Anglo-American repertoire in Europe as in the US
Public performance revenues collected by PROs are also rising as live music grows, general business conditions improve, while TV audiences remain resilient
The decline in print display advertising in national newspapers accelerated to -16% in 2015, while growth in digital advertising is slowing, and will be unable to offset revenue decline for the foreseeable future.
We believe this decline is structural and irreversible, continuing at a sharper pace than before despite the recovery in the UK economy in 2013-2015, and very different from the cyclical decline of 2009.
Publishers must convince brands and agencies that in the mobile era their superior content environments have added value. If scale newsrooms are to survive, costs must be reduced through collaboration and outsourcing.
Google Home will compete against Amazon’s Echo in the contest to supply voice-activated home hubs to US homes
Google claims Home is better at voice-based search due to its superior capabilities; pricing is unknown, but is likely to be at par with Echo ($179)
Prime, Fire devices and media services are competitive advantages for Amazon in the US that will make it hard for Google Home to succeed there
Paid placements for content marketing online in Europe will increase by 186% from 2014-2020, to over €2 billion
It is a particularly exciting area for premium publishers, who can leverage their content expertise to reverse the flight of ad money to lower-cost properties. Almost all are developing creative content offerings to capture this value
Metrics and measurement, disclosure and cost remain as challenges for content marketing online, but growth is strong due to high commitment to spend from advertisers