Cord-cutting has become a major headache for US pay-TV operators in the last three years, while cable network channels face further erosion due to cord-shaving and we now see a rapidly growing population of cord-nevering households that have never taken a pay-TV subscription  

Should we expect it to be only a matter of time for the UK to follow the US? The short answer is no, due to major differences in the pay-TV market infrastructures of the two countries, which leave the UK much less exposed

However, downward pressures from the online space do exist in both countries, while the big cord-cutting-shaving-nevering threat we now see in the UK has most of all to do with the chill Brexit winds on the economy

Video content is crudely defined. If something is not very short (<10 minutes) then it tends to be considered long-form. But there is a middle ground - one which displays a distinctive combination of characteristics in terms of production, broadcasting and viewing

Mid-form video (between 10 and 20 minutes) has the ability to carry the narrative arcs normally associated with long-form programming, whilst also retaining the snackable and shareable attributes of short-form

The footprint of mid-form is, so far, small. However, it is growing, as its unique qualities, such as excellent ad completion, become more readily recognised

European service revenue growth improved in aggregate but with traction noticeably gradual and fragile, and growth remains negative. The future of this fragile recovery is highly uncertain in the wake of a vote to take the UK out of the EU. Most economists have budgeted a slowdown in UK GDP growth, revising 2017 expectations from around 2% to near zero or below. The IMF expect 1.3% growth in 2017 (-1ppt revision) based on “limited” Brexit impact with implied potential for further downward revisions, and it has made more modest cuts to forecasts for other European markets

Mobile service revenues are susceptible to the slowdown but we believe there to be sources of resilience in the revenue stream that would temper the impact including much reduced prepay share of the base, heavily eroded ARPU differential of contract users over prepay and contract tariff value for money, bundling trends, high smartphone penetration (>64%) and data attachment rates (>75%), and 4G coverage and penetration

Following a failed acquisition of O2 in the UK, H3G have turned focus to the proposed JV merger with Wind in Italy where offered remedies are rumoured to have been found acceptable although official confirmation (pending) is only due by 8 September. These include furnishing Iliad as a replacement fourth market entrant with uncertain consequences for the Italian market

Google’s recent product updates and developer conference announcements aim for as many users on as many platforms and devices as possible – a return to strategic form

The company has a dual approach: using Android as a mobile trend-setter while also devising new ways for users and developers on other platforms to use Google services

The reach provided by these initiatives will help Google’s machine learning algorithms to better understand and predict user intent – the cornerstone of the company’s ad business

Adverse market trends are finally touching the iPhone, the mainstay of Apple’s business, which looks healthy in the short term but is facing substantial threats further out

In response, Apple has changed its iPhone pricing, is warming up to developers and seeks to address long-standing problems with its first-party service offerings

While some of the holes in Apple’s service suite are now being patched, the company is still playing catch-up to rivals Google and Amazon in areas like smart assistants, maps and the connected home

The DCMS has published the government’s response to its consultation on the balance of payments between television platforms and public service broadcasters, the so-called issue of retransmission fees

One sure outcome is that Section 73 of the Copyright, Designs and Patent Act (CPDA) 1988, which has hitherto protected cable operators (i.e. Virgin Media) from having to pay retransmission fees, is outmoded and will go

But, we now have a disconnect. The government has stated unequivocally that it expects the continuation of no net carriage payments between the licensed PSBs and the platform operators and may consider legislative changes to ensure this. And yet ITV sees the government response as a welcome first step towards their introduction

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

A post-Brexit recession will cause a hyper-cyclical decline in the advertising revenues of broadcasters and publishers

The Vote Leave idea of the UK joining a free trade area for goods with the EU would sever UK access to the Single Market for services, damaging the export-reliant audiovisual group, among many other sectors of strength

Made-in-the-UK IT, software and computer consultancy services will lose eligibility for government procurement tenders once the UK is an outsider to the EU

At present, Sky exclusively holds all pay-TV domestic live rights to Germany’s top football league. The 2017-2021 rights auction will conclude in early June. It contains a new soft ‘no single buyer’ clause referring solely to online rights

Sky’s real threat comes from potential bids for the main TV packages by deep-pocketed telecom or digital platforms. This could see Sky losing games and shouldering significant cost increases

We think Sky’s German operations will break even by fiscal 2017. Beyond this, profitability is heavily dependent on the auction’s outcome. If it were to retain all live rights, Sky could afford to increase Bundesliga costs by up to 40% over the four-year period. Anything beyond this would lead to Sky making losses

European mobile service revenue growth was flat at -0.8%, while underlying country movements were somewhat more dramatic. The key highlights were Italy returning to positive growth driven by pricing stability, and France showing worsening growth decline for the first time in over two years impacted by challenger telco pricing cuts

An assessment of these challenger telcos highlights a somewhat precarious position, as continued price aggression yields diminishing incremental gains, and they all remain some way from gaining the scale to achieve profitability

The only incentive for challengers to remain aggressive is as an encouragement for their competitors to buy them; increasing regulatory hurdles to consolidation would remove even this incentive, leaving price increases as their only rational route to profitability