By integrating Amazon's content, Sky tightens up its ecosystem. We now estimate that no more than 5% of Sky users have subscriptions to services that are not carried by Sky Q, excluding Now TV

The agreement may be a first step in closer co-operation, but Sky will be cautious to value the benefits and costs. Amazon's width of business makes it different from others it has made deals with

Sky is on its way to transform the relationship it has with content suppliers from a relatively simple wholesale model to something it now calls aggregation: this appears intrinsically more complex

On 1 October, Google CEO Sundar Pichai announced $1 billion for worldwide news publisher partnerships for a novel News Showcase product, helping them to distribute their content to a new audience.

It is an important milestone: for the first time Google will pay publishers to curate content in the Google News app (initially), and to provide unpaywalled access to articles on publishers’ websites that users can click through to.

In so doing, Google is defusing the simmering conflict with publishers in major markets, and showing policy-makers its willingness to collaborate with a news industry facing existential threats.

 

With a lack of live sport, the lockdown weighed on incumbent pay-TV platforms’ subscriptions. SVOD providers leveraged their cheap positioning—Netflix and Amazon Prime Video now rank above other subscription services in Europe, and Disney+ had a successful launch.

Incumbents—Sky, Canal+, Movistar+—all pursue a twin-track strategy. They are positioning themselves as gatekeepers thanks to service bundles, while redirecting resources away from sports towards original series.

European productions are increasingly garnering audiences outside of their home markets, regardless of the production language. Netflix is a major conduit for European exports, due to personalisation of the interface and high-quality dubbing.

Even with lockdown continuing and competition for time still almost non-existent, linear viewing is heading back towards 2019 levels after its big, early boost

The inevitable fatigue around COVID-19 news, along with the growing staleness of the TV schedule caused by content supply struggles, are behind the decline

Unmatched TV set use, made up predominantly of streaming and gaming, has held onto much of its growth, not affected by many of the challenges that linear schedules face. This trend will inform future viewing patterns

The UK lockdown since mid-March has boosted TV time to levels not seen since 2014, with broadcast TV and online video each growing by nearly 40 minutes/person/day.

While trends vary significantly by demographic, news consumption has been a common catalyst for linear TV’s growth, benefitting the BBC above all. Although Sky News has also flourished, Sky’s portfolio has been seriously impacted by the lack of live sport.

2019 extended many of the long-running trends of the last decade, but, notably, online video’s growth rate appeared to slow among youngsters, in contrast to older demographics. 35-54-year-olds watching more VOD will have significant implications for linear broadcasters down the line.

In response to COVID-19 and the associated lockdown and economic crash, advertisers have slashed budgets. Online budgets are not immune.

This has clarified features of the online ad market: it is demand-driven, relies heavily on SMEs and startups, and is built on direct response campaigns.

We expect online advertising to outperform other media, and for platforms to further gain share. But with a very few exceptions, this health and economic disaster is good for nobody.

COVID-19 has sent online news surging, with publishers experiencing massive traffic uplift, as trusted news sources become increasingly important.

But the industry is still heavily reliant on print revenues, and we are seeing supply chains come under extreme pressure as core readers self-isolate and retail giants close or de-prioritise news media. Advertising—including categories like retail and travel—has collapsed.

In face of existential threats to the sector, we have written to DCMS to mobilise Government funding to sustain news provision and journalism.

Amazon aired its first set of Premier League matches in December, with proxy figures supporting reports that it attracted up to 2 million concurrent viewers.

Amazon Prime penetration soared in Q4, backing up Amazon’s claims that record numbers of new members signed up on the first two days of its football coverage—an encouraging sign at the time of year when ecommerce spend peaks.

As long as Amazon remains principally an online retailer, bidding for premium packages of Premier League rights cannot be justified. In fact, it could retrench from Premier League football altogether after wringing out the value over three seasons.

With Comcast’s acquisition of Sky confirmed and Disney’s acquisition of 21st Century Fox on the path to regulatory clearance, how will the relationships of the various parties evolve?

Disney is betting on a standalone SVOD service in the US. However, its content deal with Sky in Europe is lucrative, and the performance of DisneyLife in the UK suggests its US strategy may not fit elsewhere.

Sky’s relationships with Disney and Fox are crucial to its business. A joint pursuit to maximise returns from IP and distribution in Europe would be economically efficient for both Comcast/Sky and Disney/Fox.

Drawn by its rapid growth and enviably youthful audience profile, incumbent broadcasters are paying increased attention to esports and its followers

Viewership of esports on UK broadcasters’ linear channels is low, with consumption on their online platforms likely the same. The market’s fragmented nature and global audience, along with the dominance of Twitch—and to a lesser extent YouTube—makes this unlikely to change

Broadcasters’ low-cost approach has primarily benefited competition organisers and games publishers. For broadcasters to create real revenues, massive upfront investment would be needed, with the risk of failure high