Rupert Murdoch is seeking to merge News Corp and Fox Corp, split up a decade ago, to create greater corporate scale and streamline management.

A recombined News Corp would generate revenues of c.$24 billion based on fiscal 2022 results, with EBITDA of $4.6 billion, and an enterprise value in the region of $25-26 billion.

An additional rationale for News Corp is the financial protection of cherished news brands such as the Wall Street Journal and the Times inside a stronger enterprise. While the first phase of online transformations has been successful, sustainability of trusted, quality news media is never settled or guaranteed. The objective could hardly be more important now and in the coming years.

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.

FAST services that include digital linear channels (FAST channels) appear to be experiencing solid growth in the US. In the UK, this success has been used to highlight a potential mechanism to diversify away from broadcast linear and SVOD

However, the growth potential of these services on this side of the Atlantic contends with a very different video market than the US—the free output of the PSBs remains prolific and of high quality, while prominence legislation is likely to tougher

Furthermore, overall viewing of long-form video content is declining. Any new FAST services will be fighting for a declining amount of screen time with poor content slates and little name recognition—however, growing demand for US content is an advantage

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

Amidst the US macro downturn denting online sales, Amazon reported revenue growth of 7.2%, driven by AWS and advertising, but broad-based in nature

Inelastic demand for Prime has created opportunities to increase efficiency and monetisation, with cutbacks to fulfillment costs and increased subscription fees boosting Amazon's margins

Amazon's bottom-funnel search advertising growth has proved resilient, up 18% YoY, as growth eludes higher-funnel competitors—offering a strong indication that Amazon will largely buck the trend of advertising decline

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.

Apple's News and News+ service to iOS users in the UK, US, Canada and Australia has attracted many ad-funded and paywalled news publishers since its launch in 2015

Publishers’ 'opt-in' to its walled garden environment to reach underserved demographics on their own sites and raise brand awareness, and more recently, take advantage of the reduced commission on subscriptions sold through the App Store, with Apple taking 15% instead of 30%

For Apple, the priority is to improve the user experience, ultimately driving sales of iOS devices, although its engagement with news is only a minor source of revenue compared to games. We regard Apple News as being mainly a device to buttress its reputation in those selected markets where it faces political and regulatory pressures, explaining its limited geographic roll-out

Amazon's first reported loss since 2015 is not surprising in a difficult inflationary environment, as ecommerce resets from the pandemic boost. Highly exposed to cost pressures through its logistics business, the situation is not as bad as it looks

The increases to Fulfilled by Amazon fees have been completely lost in the storm, while costs continue to increase on all sides. Amazon's announced increases are unlikely to keep up 

Launching Buy with Prime will allow Amazon to increasingly monetise FBA: a further step towards creating a monopoly in the fulfillment space while also boosting the desirability of Prime membership

Broadcast TV viewing resumed its downwards trajectory in 2021, following a pandemic-inflated boost in 2020. The effect has been compounded by streaming services retaining much of their lockdown gains, consolidating their place at the heart of people's viewing habits

Within the shrinking pie of broadcast TV viewing—still c.70% of total TV set use—the PSBs have held relatively steady, whilst Channel 5 has increased both its share and absolute volume of viewing

However, further decline seems inevitable, with the largest components of the programming landscape, namely longstanding formats and the soaps suffering badly since the beginning of the pandemic. We await the effect of various new scheduling strategies

Channel 5 has been a rare recent success story in linear television, growing overall viewing and share while beginning to shake off the perception of being the home of cheaper, exploitative programming, consolidated under the ownership of Richard Desmond's Northern & Shell

The programming shift—most notably in investment in lower-price-point British drama—has been made possible with savings from axing schedule centerpieces Big Brother and soon, Neighbours. However, this will result in continued declines in 16-34 viewing share

The other channel brands of Paramount Global (formerly ViacomCBS) are in a gradual downswing: My5 is subscale, while Pluto TV makes less sense in the UK than in other markets. We wait with interest as to how upcoming SVOD, Paramount+, will differentiate