On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Salesforce, the Financial Times, and Adobe

With over 580 attendees and over 40 speakers from the TMT sector, including leading executives and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry

This is the edited transcript of Session One, covering: the evolution of streaming models, and public service broadcasting in the digital age. Videos of the presentations will be available on the conference website

Reddit, a unique and valuable online space, has reported its first quarterly results as a public company, following a very successful IPO.

In the longer term, Reddit is doomed to scratch out an unprofitable existence as a wannabe scale ad platform, echoing peers in the public markets.

Advertising is probably the least-bad business strategy, as user payments, ecommerce and licensing revenues are even less proven. Dialling back growth ambitions to improve the bottom line is the most sustainable path.

With traffic from Facebook and X to news publishers’ destinations in decline, distribution is shifting to other platforms where they have more control, such as feeds served on WhatsApp and newsletters on LinkedIn

There is no one silver bullet platform to replace Facebook, on which certain publishers became overly reliant, or X. News publishers are trying out a myriad of platforms to see which work best for the specific audiences and use-cases they are cultivating

WhatsApp and LinkedIn are still platforms that are mediated for news publishers, so risks remain. These platforms have highly differentiated alignment with the needs of enterprises producing journalism
 

News UK and DMG Media’s joint venture to combine their printing operations has been given the green light by the Competition and Markets Authority (CMA), concluding the supply of services to third parties would not be adversely affected                                                                                          

The CMA concluded that the printing operations of the two publishers were not particularly close competitors for third-party customers. Geography and spare capacity—as we have long argued—were far more influential factors                                                                                          

The CMA’s green light is a timely reminder of the importance of industry collaboration for the profitability of the news industry’s print era, with useful indicators for the evolving online market

Meta's China risk is overstated: the spend from Chinese advertisers is diverse and resilient to everything short of a full-blown trade war. 

Apple (and Tesla) are in the more precarious position of selling directly in-market, and face sharpening domestic competition.

Amazon's exit from selling in China still leaves it exposed: its marketplace strategy is built on Chinese sellers, whose potential routes to market are proliferating with local platforms going global.  

DMGT prepares to end its tenure as a plc, as the Rothermere family finalise a takeprivate offer of £2.9 billion (c. 18.8x EBITDA) and make a swathe of new appointments as it seeks to reconfigure the business

The Daily Mail newspaper is the crown jewel in the company’s assets, as the wider portfolio has recentred around consumer media

The road ahead is still foggy, with a rickety bridge between its print and online brands—a strategic risk for DMGT, yet also a key opportunity in UK media

Google has lost its appeal of the European Commission’s antitrust ruling of 2017 that it had abused its position in general search to favour Google Shopping, its Direct-to-Consumer (DTC) channel for merchants, in relation to price comparison aggregators. 

Since the case was lodged in 2010, price comparison has receded as the key to consumers’ online purchases, also motivated by influencers, reviews, and browsing. Merchants use YouTube and Instagram to build brands, Facebook to launch products, and Google Shopping as the key alternative to Amazon for direct response.

The EU’s antitrust regime has once more solved yesterday’s problem, but this will shift for Big Tech to an ex-ante regime when the landmark Digital Services Act and Digital Markets Act come on-stream.

The UK print media sector is facing escalating input cost inflation. Newsprint prices are 50% higher year on year in Q4 2021, noting that prices in 2020 were exceptionally low on soft demand. Based on 2019 rates, prices could be 25% higher in H1 2022. The squeeze on margins for print could destabilise the economics of supply overall.

Newsprint inflation is being caused by soaring costs of recycled feedstock, exacerbated by the monopoly of a single supplying mill in the UK after years of attrition. Imports remain substantial, but impaired by the EU-wide crisis in the supply of paper products, alongside bottlenecks at points of entry to the UK.

Although less significant a factor than paper in the cost of printing the news, electricity cost inflation is another worry for printers, noting that these costs were again also exceptionally low in 2020. Wholesale electricity prices surged by 80% in 2021 (Ofgem), due to pressure on gas supplies from Russia, and the global energy crisis, which will persist into 2022.

Facebook has been caught unawares by the significant impacts of privacy changes to its advertising revenue, posting an uncharacteristic quarterly decline as its costs are set to spiral

Facebook’s ageing user demographics are a long-standing and growing issue, as competitor platforms erode Facebook’s attraction to the young. Recent negative PR only compounds a brewing problem of relevance as social media shifts towards being content, rather than network-driven

By pinning its name to the metaverse, Facebook hopes to redefine its narrative and claim the benefits of managing the platform of the future, but significant challenges in the entertainment, enterprise, and tech spheres stand in its way

Sales of used and new cars fell 18% in 2020, impacted by the pandemic’s closure of forecourts, and bottlenecks in the supply chain. Consumer demand for private over public transport has strengthened, however, pointing to a recovery of car sales in 202.

Market leader Auto Trader posted a 29% revenue decline in the year ending in March 2021, largely from necessary but self-imposed subscription holidays. Auto Trader revenues are set to rebound in 2021 as the car market’s recovery emerges.

The pandemic accelerated the transition of the consumer car buying journey from the physical forecourt to the digital space. Fully digital transactions are edge-case, but there is huge opportunity for scale players to facilitate transactions—needless to say, Auto Trader looks to be a key winner.