Market revenue growth improved to -1.4% in Q1 2021, a partial recovery being better than at any point in 2020, but still worse than at any point in 2019.
Next quarter the sports channel suspensions will lap out, driving strong (but temporary) year-on-year growth.
Longer-term revenue growth recovery will need backbook pricing pressure relief, which will start in Q2, and demand for ultrafast broadband.
The highlight of what seems set to be O2’s final results as a standalone company is OIBDA growth of almost 8% in spite of a drag from weaker net adds.
It has also been a good quarter for O2 strategically with preliminary merger approval and contiguous 5G spectrum although that may be matched by its peers in subsequent deals given H3G’s openness to negotiation.
The annualisation of COVID impacts as well as an improving mobility picture will provide a significant boost to trends, although the roaming drag seems unlikely to reverse any time soon and O2’s relative growth will suffer from lower in-contract price rises than peers this spring.
As private sector employers faced an unprecedented degree of uncertainty, the volume of vacancies fell 60% from 2019 to 2020, driven by the arts & entertainment, food & hospitality and retail sectors, leading expenditure on recruitment advertising to fall by 32%.
In 2021, vacancies for temporary placements are surging as society proceeds to unlock, with the near-term labour market tight, boosting expenditure on recruitment. Our concern is the masked unemployment in B2C sectors that will emerge should furlough end on 30 September.
Judging by global revenue trends in FY2020, professionally-oriented networking platform LinkedIn gained from demand for hiring served by paid-for listings, also filling demand for events. Indeed, which serves the high-volume but lower-value end of labour markets, with a less fruitful budget and cost-per-click model, suffered mild revenue decline.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
Virgin Media’s subscriber boom continued into 2021, despite a marked price rise in Q1, benefiting from lockdown and continued demand for higher speed broadband.
ARPU remained weak in Q1, suppressing revenue growth, but this will recover (somewhat) in Q2 as the price rise takes effect, countering the current disconnect between volume and revenue growth.
The merger with O2 is set to complete in June, with much operational pre-merger preparation already done, but the key strategic questions appear yet to be decided.
Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.
Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.
Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.
The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy.
Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry.
Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated.
Facebook emerged from 2020 reporting record revenue growth of 22% over the year, built on its huge volume of usage, its simple buying tools and its trove of first-party data.
Facebook’s ability to match third-party data for targeting and attribution is also central to its success. However, Apple and Google are restricting data-matching tools like third-party cookies and mobile IDs, and Facebook is moving to minimise the damage.
Facebook is trying to turn its sites into storefronts by launching ‘Facebook Shops’. It is also taking public stands on the use of data for advertising, and on the need for brand-building in marketing plans. These are conversations all advertisers and media owners should be engaged with.
Virgin Media’s subscriber growth continues to be very strong, and it looks like next quarter’s price rise will (at worst) only stall, not stop, the renaissance.
ARPU was hit in Q4 by the postponed price rise, and it will likely remain in decline in 2021, with regulatory pricing pressure and lockdown effects still weighing, despite firm new customer pricing.
Nonetheless, accelerating subscriber growth is expected to drive group revenue growth positive again (helped by B2B growth), and Virgin Media’s main strategic problem—its fibre trilemma—looks like it will be dealt with after the merger with O2, expected to close mid-year.