Europe experienced flat service revenue growth in Q2, with French trends worsening as SFR’s woes intensified.

There are signs of better pricing momentum in several markets, particularly in Italy and in Germany where O2 has softened its aggressiveness.

This, together with expected improved momentum in the UK, and a likely resolution in France, paints a more positive outlook—and will be particularly helpful for Vodafone’s German turnaround ambitions.

Defined roles within the advertising ecosystem are a thing of the past: everyone is adapting by building out functionality to claim share as the constants underpinning advertising—attribution, discoverability, and regulation—change.

There is a new wave of M&A, partnerships and developments from agencies, adtech, and big tech in data and AI, as all sides position themselves to reshape the terms of online advertising at a time of maximum uncertainty.

Big tech platforms are leveraging their scale and AI investments in attempts to reset broad swathes of the market. Publishers are exposed; their way forward relies on asserting their value through direct audiences and collaboration on sector-wide innovations

The erosion of the website’s centrality, and the rise of creators and influencers generates multiple challenges for media –people’s choices have grown enormously. This report highlights consumer behaviour: what people trust and value.

Through a series of case studies we demonstrate people’s needs are resilient: helpful and convenient services with personality that can be trusted, all enhanced by strong community.

Media brands continue to play a critical and trusted role for people to navigate marketplaces, interests and their work life. The role of product –and by extension, the leadership and structure of product development –has grown in importance.

Roblox’s rapid redirection towards attracting brands and advertisers with new tools, including programmatic advertising, is a savvy and ultimately necessary strategy to position the company as a global platform for games and entertainment IP

Roblox will comfortably hit 100 million DAUs in 2025, as growth rates begin to run upwards of 25%, aided by aggressive geographic expansion. New content partnerships could accelerate it faster 

For TV and film marketers, led by Netflix, Roblox is becoming a default option for immersive experiences and games, while actively avoiding indirect support for Disney through Fortnite

Classified advertising is estimated to have grown circa 7% in the UK in 2024, and forecast to grow 4% in 2025. Specialist platforms own these marketplaces, with both consumer and industry network effects the driving force behind platform strength

Online platforms are gradually becoming vertical-specific search providers, with dominant players Rightmove and Auto Trader looking for further growth through integrations up and down their respective value chains

The properties vertical is bouncing back as buyers adjust to ‘higher for longer’ interest rates, while recruitment sees ongoing polarisation amidst ongoing uptake of employer-facing AI. Autos, insulated from interest rates, grapples with the looming sector shift of EV quotas

Service revenue growth dropped off by 2.7ppts this quarter, and into negative territory, as operators in all markets suffered weaker growth
 

Operators in France and the UK implemented price increases this quarter but re-contracting absorbed any positive revenue impact. In Italy, regulatory intervention thwarted operator plans to raise prices
 

Increasing competitive intensity in France and Germany comes at a time when operators can ill-afford ARPU dilution and high churn
 

Service revenue growth was broadly flat at 1.7% as improvements in Germany offset weaknesses in Italy.

The impact of price increases has been mixed, with subscriber losses dulling their upside, and the mixed picture looks set to continue into Q2.

The market continues to be challenging with elevated competition at the low end, pressure from some regulators to increase network coverage, and a somewhat soft EBITDA outlook.

With traffic from Facebook and X to news publishers’ destinations in decline, distribution is shifting to other platforms where they have more control, such as feeds served on WhatsApp and newsletters on LinkedIn

There is no one silver bullet platform to replace Facebook, on which certain publishers became overly reliant, or X. News publishers are trying out a myriad of platforms to see which work best for the specific audiences and use-cases they are cultivating

WhatsApp and LinkedIn are still platforms that are mediated for news publishers, so risks remain. These platforms have highly differentiated alignment with the needs of enterprises producing journalism
 

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.

Reports of the "death of the metaverse" are greatly exaggerated. The scope of investment across metaverse-friendly technologies and experiences remains robust, although aggressive global competition in the AI sector could cause speed bumps.

VR, XR, and spatial computing will see a renaissance in 2024, renewing interest from developers as well as major media and entertainment. Gaming continues to be a major driver of the metaverse, with clear opportunity for new major services to compete against Fortnite and Roblox.

The building blocks are therefore all in place for the next consumer growth phase. Scaling the metaverse will be dependent on consistent and sustained trials, and more engagement from media and entertainment beyond games.

Prepared for The Metaverse Society by Enders Analysis.