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.

 

Investors warmly welcomed WMG's IPO of non-voting shares in March, valuing the company at $12.8bn, a 388% increase in the company's valuation since Len Blavatnik acquired it in 2011

Investors are placing a bet on music streaming. WMG's strength in the US market due to R&B and Hip-hop in its catalogue allowed it to outperform UMG and Sony on recorded music over 2015-19, an advantage that will dissipate when growth shifts to emerging markets

COVID-19 impacts explains WMG’s 6% decline in recorded music revenues for calendar Q2 2020, despite an 8% rise in digital revenue, as revenues from physical sales (vinyl and CD) sank, and also those from artist services due to the halted 2020 live music season

Facebook grew revenues by 11% in Q2. This rate is higher than investors expected, but still driven to record lows by the pandemic slowdown. It forecasts 10% growth in Q3.

The company is under very public pressure over its moderation of hateful content, with upwards of 1,000 advertisers joining a month-long boycott, while other online platforms institute tougher policies on hate.

Facebook’s world-beating ad product and 9 million-strong bench of active advertisers means an organised boycott can’t hope to dent its growth. A coalition of advertisers, users, staff and regulators could make it take notice.

 

Online reviews are a vital input for consumer decision-making. However, reviews are easy to manipulate, and widespread fraud is undermining credibility and raising the issue of consumer protection.

Facebook, Google, and Amazon utilise reviews to improve the consumer experience, but also to sell advertising to businesses and to address fraud. These companies leverage their data superiority to better utilise reviews on their platforms, and possess a competitive advantage, versus sites like TripAdvisor, Yelp, and eBay.

Demand for expert opinion remains strong, yet is supplied only by publishers and Which?, a small segment in terms of share of traffic relative to platforms.

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.

2020 promises a year of transition for the games industry: eSports and games broadcasting are competing with traditional programming; game streaming services are becoming meaningful platform competition; and new consoles are on the way.

While most in the studio and TV industries continue to struggle with the games market—neither understanding (or seeing) a strategic fit, nor showing a willingness to invest—expect explosive growth to power the industry for the next decade and transform all entertainment services, not just games.

The ‘free-to-play’ games sector requires oversight and regulation to protect children and the vulnerable; expect regulatory turbulence in the UK, Europe and China.

Despite two decades of online disruption, the UK remains reliant on traditional platforms and brands across the media sector more so for older cohorts, but also for younger generations

13% of adults still do not use the internet and, in reality, an online only media ecosystem remains a distant prospect

Traditional providers, particularly within TV, radio and news, look set to endure for the long term , aided by the trajectory of the UK’s ageing population

Our all media ad forecasts predict 4-5% growth in advertising expenditure on UK media in 2020, driven by double-digit growth of pure play online, expected to reach 58% of total spend this year, up from 55% in 2019.

We expect that pure play online spend will grow by 10.9% in 2020, while TV and Press continue to fall by 3.1% and 8.6%, respectively.

Although the economic outlook for 2020 is more positive than 2019, debt-fuelled growth in spending is a continuing concern on the consumer side.

Employment reached an all time high in 2019 of 32.8 million people at work despite slower GDP growth in 2017-19. The tighter labour market has helped real wage growth. A two-tier jobs market has emerged, with high-grade skilled roles evolving in a wide range of service sectors, and a large pool of low-grade, part-time work  

The heterogeneous labour market has ensured that in recruitment classifieds, unlike property and auto, no digital player has achieved absolute dominance. In the layer devoted to the recruitment of professionals, served by LinkedIn, rising demand for more specialised roles has expanded the number of agencies, intensive users of digital tools to locate recruits and crack the problem of "approachability" of those already in the job  

Online job portals are rushing to improve their AI and programmatic capabilities as specialisation prompts a shift from keyword search to smart matching, leading to a boom in recruitment tech M&A. Traditional agencies such as Hays are upgrading their own data capabilities through acquisitions and partnerships with LinkedIn, Google, Salesforce and other data/tech providers