Service revenue took a dip in Q4 to 1.5% as a waning price rise impact in the UK combined with the loss of positive one-offs in Germany.

We expect growth to slow further through 2024 as many operators implement lower index-linked price rises which are also coming under increasing regulatory scrutiny.

Vodafone has made progress on its turnaround plan—striking deals for its Italian and Spanish units—but it is not yet out of the woods, with ongoing challenges in Germany and approval still uncertain in the UK.

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. 

News UK and DMG Media’s joint venture to combine their printing operations has been given the green light by the Competition and Markets Authority (CMA), concluding the supply of services to third parties would not be adversely affected                                                                                          

The CMA concluded that the printing operations of the two publishers were not particularly close competitors for third-party customers. Geography and spare capacity—as we have long argued—were far more influential factors                                                                                          

The CMA’s green light is a timely reminder of the importance of industry collaboration for the profitability of the news industry’s print era, with useful indicators for the evolving online market

Device makers regained their mojo at this year’s MWC, with phones a crucial route to generative AI becoming a daily habit. 

AI software has improved and proliferated, but limited differentiation leaves room for consolidation as a competitive funding crunch looms. 

Unanswered questions loom large, but won't dim AI's potential. 

Sony PlayStation’s next CEO will have hard decisions to make: compete against a resurgent multiplatform Microsoft, or retreat and defend an increasingly rickety PlayStation console model.

New gaming hardware will have an outsize influence in the year ahead, giving gamers unprecedented choice, starting with XR headsets and continuing to a likely new Nintendo Switch.

YouTube’s foray into browser-based games will be the service to watch in 2024. If successful, streaming services, including Netflix, will be on track to become heavyweight game platforms.

Public service broadcasters are in a position to plan for the long term with commercial licences renewed for ten years, an updated prominence regime via the Media Bill and a government broadly supportive of the BBC.

With the Premier League and EFL rights secure to the end of the decade, Sky can plan for the future from a position of strength.

Relationships between Sky and the PSBs have improved markedly recently, and as all can now plan for the long-term, this should provide further opportunities to cement relationships for the benefit of the broadcasting ecosystem and viewers.

Mobile growth improved very marginally to -3.6% this quarter as roaming revenues were harder hit and competitive intensity bounced back, but usage recovered from the lockdowns in Q2 and cuts to intra-EU calls were annualised.

Italy’s fortunes took a turn for the worse as roaming hit particularly hard and Iliad resurged. After a spate of downgrades to the outlook last quarter, there were some tentative upgrades in Q3 although the tone remains cautious.

The diminished drag from roaming is the primary positive driver from here. Although lockdowns of some degree are in place in Q4, their impact will be less severe than those in Q2.

 

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.

The launch of new games consoles this week showcases broadly divergent strategies for Sony and Microsoft, with market leader PlayStation focused solely on defending its model against the rising tide of cheaper subscription games services.

Xbox's consumer offer is the best value proposition for these difficult economic times, attracting new customers and positioning for growth, and stopping slavish devotion to 'core gamers' in the process.

Amazon's Luna lands, providing big competition in game streaming services for Google's Stadia. But nobody is taking any notice, as neither provide a real breakthrough for the industry or great value for gamers. Stadia’s lifespan could be limited.