While Sky’s overall revenues continue to rise, Q3’s growth was hampered by a significant fall in advertising revenue and to a lesser extent a slowdown in content sales

Underlying EBITDA growth was in the mid-teens. Next quarter, Sky will continue to benefit from lower Premier League rights costs versus last season, and profit appears on track to meet full year guidance

Q3 saw a rare decline in Sky’s total number of customers due to the conclusion of Game of Thrones. Sky clearly understands the value of unique content—recently extending its HBO deal. In our view, this was essential, since without a distribution deal for Disney+ (launching in the UK in March) Sky would lose Disney’s alluring content

New SVOD entrants are prioritising reach over revenue in the US with extensive ‘free’ offers, including Apple TV+ (to hardware buyers), Disney+ (to Verizon customers), HBO Max (to HBO subscribers) and Comcast’s Peacock (to basic cable homes)

This is the latest development in an unfolding global story of partnerships, continuing on from multiple Netflix and Amazon distribution deals with platforms, bringing benefits to both parties

In Europe, Sky faces price pressure, but it has secured its HBO partnership and can now talk to Disney from a position of strength

Ofcom’s recommendations to Government suggest updating EPG prominence legislation to cover connected TVs, and were warmly welcomed by the PSBs

Balancing various commercial, PSB and consumer interests will be key; determining what content qualifies for prominence will be a particularly thorny issue to resolve

Extending prominence to smart TVs and streaming sticks is critical, but implementation will be challenging

The combination of 5G, AI, IoT and big data were evangelised at MWC as generating massive scope for the transformation of multiple industries. 

That much is probably true, but it is the tech and consultancy companies who will likely receive the benefits, with connectivity revenue likely to be modest.

For the operators, 5G brings more capacity much needed for hungry smartphone users, and perhaps the opportunity to transform themselves into a leaner operating model.
 

The average cover price of national newspapers has risen by 58% since 2010, more than twice the CPI increase of 22%. Are publishers “shooting themselves in the foot” at a time when buyers and advertisers are defecting to online?

To settle this, we analysed all the cover price events by national titles between 2010 and 2018, which reveals the relative success of The Times when it has raised its price.

For mid-market and popular titles, cover price hikes have on balance reduced circulation revenues and, by lowering reach, drained advertising revenue: a lose-lose scenario.

On 29 November, the Leveson Inquiry into the culture, practices and ethics of the press finally issued its report. Its verdicts on the conduct of the press, politicians and police were less severe than expected.

The three main political parties have accepted most of the report’s recommendations, but have disagreed over the use of statute. As expected, the Conservatives are against, while Labour and the Lib Dems are in favour.

Subsequent cross-party talks and negotiations between editors have so far failed to produce agreement, with the process only becoming more opaque as time goes on. The shape of the future regulatory system remains uncertain.

News Corporation’s Fox is to acquire a controlling stake in the Eredivisie Live pay-TV channel, which holds long-term rights to the top football league in The Netherlands.

The guarantees that Fox will give to the league imply that revenues will more than double over the twelve years from 2013-14. Although we see growth potential in the historically underdeveloped Dutch pay-TV market, this looks challenging.

Eredivisie Live operates in a wholesale market, making it very difficult to replicate the Sky platform model. The rationale for the deal appears instead to lie in an effort by Fox to opportunistically strengthen its global portfolio of sports channels.

News Corp will split publishing out of its business by creating a company to include newspapers in the US, UK and Australia as well as book publisher HarperCollins News Corp revenue growth has for some time been driven by explosive growth in cable network programming revenues, with slower revenue growth in film, TV, satellite TV and publishing The structural decline of print-based businesses is the main reason cited for the split. However, the Dow Jones and WSJ, both serving a B2B market, will be at the heart of the new publishing company’s value

The New York Times has generated $243 million from its digital services in the four quarters since the launch of its new subscription strategy, representing about 15% of New York Times Media Group revenues, according to our estimates.

This scale is the clearest signal yet that digital-only newsrooms could be able to generate enough revenue to fund expensive breadth and depth in journalism – though there will be many fewer profitable scale players than in the print news era.

Meanwhile, bundling digital and print subscriptions has helped the New York Times develop an integrated and valued approach to consumer service provision, and in so doing has mitigated print circulation decline, at least for now.

The weak spot of 15,000 net TV additions in a positive quarter for operating profit growth reflects the continuing downward pressures of a struggling economy, with little indication of headwinds to do with connected TV Very strong growth in home communications in a weak quarter for TV net additions underline Sky’s competitive strengths in a market now close to maturity, as well as bringing revenue growth and churn reduction benefits Overshadowing Sky’s Q3 results, Ofcom’s investigation into the “fit and proper” status of News Corp’s shareholding in BSkyB is unlikely to affect the company in 2012