Iliad has made an attractive offer for Vodafone Italy, to initially form a joint venture but to ultimately give Iliad the right to buy Vodafone's stake.
Vodafone management may be more keen on a less transformative, but easier, deal with Fastweb, retaining Vodafone's presence in Italy.
Iliad's announcement is likely aimed at highlighting to shareholders and the Vodafone board that a more value-creative deal is on the table, even if management appetite is not there for it just yet.
Service revenue growth almost doubled this quarter to 2.4% aided by price rises in the UK, Spain, and France, but remains well below inflation-levels.
The revenue boost from in-contract price rises will ultimately disappear as customers recontract, dampening the EBITDA outlook as costs continue to rise.
Operators are looking to other strategies to strengthen their positions, including edging up new-customer pricing, M&A, and attracting wholesale MVNO business.
Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.
The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.
Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.
Recorded music streaming revenues rose 11% in 2022 and we estimate Spotify’s contribution at 1/3—Spotify added 25 million Premium Subscribers in 2022, growing its recording and publishing payouts to the music industry to $8-9 billion.
Spotify’s Loud & Clear resource shows that the long tail of artists generating royalties between $1,000 and $10,000, of which many are self-distributing, rose 16% to 175,500—75% of all those generating over $1,000.
Spotify’s open platform for uploads grew the long tail to over 100 million tracks in 2022. Major labels are seeking to change the pro rata royalty payout model on Premium to address the siphoning of royalties by fake music, clips and bots—a looming threat to creators is AI-generated music.
Providing home broadband connections via a mobile network (FWA) is gaining traction in certain markets where local conditions make it a viable alternative to fibre, such as New Zealand, Italy and the US.
FWA is a time-limited opportunity for most, with mobile traffic growth absorbing capacity for it and fixed traffic growth depleting the economic case. An ultimate shift to fibre is the best exit strategy.
In the UK, H3G's spare capacity could support up to 1 million FWA customers on a ten-year view—enough for a meaningful revenue fillip for H3G, but not enough to seriously disrupt the fixed market.
Spotify’s strategy to invest massively in podcasts weighed on its costs and chewed up its operating profits, a bad combination that led CEO Daniel Ek to admit he 'got a little carried away'.
Spotify's podcast investment did not deliver the benefit of reduced music licensing costs on the premium tier.
Podcast investments in North America have not materially altered Spotify's slower post-pandemic subscriber growth in that geography, and do not travel outside their home country as readily as music.
With a lack of live sport, the lockdown weighed on incumbent pay-TV platforms’ subscriptions. SVOD providers leveraged their cheap positioning—Netflix and Amazon Prime Video now rank above other subscription services in Europe, and Disney+ had a successful launch.
Incumbents—Sky, Canal+, Movistar+—all pursue a twin-track strategy. They are positioning themselves as gatekeepers thanks to service bundles, while redirecting resources away from sports towards original series.
European productions are increasingly garnering audiences outside of their home markets, regardless of the production language. Netflix is a major conduit for European exports, due to personalisation of the interface and high-quality dubbing.
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
Times Radio launches as an ad-free commercial speech radio service on DAB and online. By extending brand reach, it forms part of the marketing funnel to convert listeners into subscribers.
Radio is remarkably resilient for a traditional mass media, and this arrival will complement the strong commercial sector and the mighty Radio 4.
Timing will be a revenue challenge, but this bold, cost-effective, intelligently deployed experiment comes as the news industry is most at risk, a welcome innovation for readers and listeners—and for the sector.
Times Radio launches as an ad-free commercial speech radio service on DAB and online. By extending brand reach, it forms part of the marketing funnel to convert listeners into subscribers.
Radio is remarkably resilient for a traditional mass media, and this arrival will complement the strong commercial sector and the mighty Radio 4.
Timing will be a revenue challenge, but this bold, cost-effective, intelligently deployed experiment comes as the news industry is most at risk, a welcome innovation for readers and listeners—and for the sector.