TikTok has been dealt a devastating blow as a US bill has been signed into law forcing owner ByteDance to sell within a year or face its removal from app stores.
The stakes are higher than in 2020—China's opposition to a divestment will make an optimal sale harder to conclude, so all sides must be prepared for a ban.
The TikTok bill introduces extraordinary new powers in the context of the US and China's broad systemic rivalry, though online consumer benefits will be limited.
IFPI reports trade revenues from streaming rose 10% in 2023 to reach $19.3 billion, and we estimate Spotify contributed about $7 billion. Spotify also rewarded music publishers with about $2 billion in royalties.
Spotify’s Loud & Clear data on royalties paid to the 225,000 professional and aspiring artists served to its 600 million users reveals a bulge in the middle part of the distribution in favour of Spanish language artists as the service expands in Latin America.
The top 1,000 earners are mainly artists at the top of the charts in the US and UK markets, which together contribute half of Spotify’s revenues and thus royalties. Top earner and top all-time streamed artist Taylor Swift earned over $100 million in 2023.
UK consumers bought £123 billionof goods online in 2023, up 63% on 2019 (vs 7% for offline). Online sales of non-store retailers, such as Amazon (and Temu, Shein, Next), reached £60 billion in 2023, of which Amazon—a nascent online advertiser in the UK—accounts for about £43 billion.
The pandemic’s structural boost to the online channels of store retailers—which operate on the open internet, outside online walled gardens—lifted sales to £63 billion in 2023, up a huge 78% on 2019. With more competition for spend in straitened times, they are using advertising more aggressively.
The open internet is also the domain for online-transacted services: the return to in-person experiences drove the biggest ecommerce gains since 2022, as consumers purchased services online worth an estimated £291 billion in 2023 and rising.
Germany’s RTL+ streaming platform has been revamped into an 'all-in-one' bundle of content including premium sports, music and audiobooks.
RTL wants to leverage its FTA reach to build an online subscription base large enough to influence the future shape of German TV.
To sustain subscriber growth we argue that RTL will need to release defining content and explore partnerships beyond its current deals with telcos.
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.
Online advertising growth at big tech firms has flatlined, with real-term declines at Meta and YouTube. The weakness is concentrated in higher funnel ads.
Advertising is a leading indicator. A hardware slowdown is coming, services growth is stuttering, and businesses will want to save on cloud services.
Investors are hostile to attempts to spend through a downturn, but competition from TikTok and developments in AI demand targeted investment, while Meta is pot-committed to the metaverse. Tech giants are looking for savings elsewhere.
Advertisers are rushing to create immersive virtual experiences to promote their brands, particularly on social gaming platforms with large built-in audiences. The interest shows no sign of waning.
We are in the very early days of metaverse marketing: formats are bespoke, costs are high and the data provided by platforms is rudimentary. Not all product categories are suited to a virtual incarnation.
The long-term promise is tantalising: advertising that is better than its real-world counterpart, that forges new relationships with customers, and that forms part of the product offering rather than just promotional activity.
For the media and entertainment industry the dawn of the metaverse, and the word soup of acronyms that accompanies it, is the latest high-profile technology wave that threatens to simultaneously upend established distribution models and reinvent both the experience and the relationship with the audience.
Music is the media sector (outside gaming) that has moved fastest to experiment with metaverse applications, so far mainly on gaming platforms like Fortnite and Roblox, which provide a ready game-centric audience but offer little lasting innovation.
Music's metaverse potential beyond gaming is huge, led by artists who want a more dynamic online presence, though we anticipate a long trajectory towards mainstream applications as questions remain around formats, design, platforms, and monetisation.
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