From the depths of 2023, advertising expenditure on legacy media rose moderately in 2024, on the back of an uptick in real private consumer expenditure thanks to lower inflation and reduced costs of credit—the outlook for legacy media is about the same for 2025.
Online stands apart from legacy media due to the growth of ecommerce—driven by both goods (over 26% of retail sales) and services such as travel, as well as intense competition among platforms (Amazon, Shein, Temu)—with double-digit growth in 2024 set to continue in 2025.
Television remains the most effective medium for brand advertisers—despite the decline in viewing—with broadcasters’ digital innovation and SVOD ad tiers providing greater targeting alongside the mass broadcast reach.
Service revenue growth dropped further to -1.7% this quarter as pricing remains under pressure and in-contract price increases no longer benefit
Competition is heating up in Germany and France, and Digi is taking an aggressive stance as it enters the Portuguese and Belgian markets
While there is increasing awareness that investment levels in Europe are compromised by the current market structure, support for in-market consolidation remains lukewarm at best at the EU level
The proposal from DCMS to expand the pre-digital “public interest” regime that requires clearance for changes in the equity stakes in print newspapers to online news publishers lacks a firm rationale in 2024.
A plethora of online sources dilute the influence of news brands and their proprietors over British people’s political views, in particular the platforms (X, YouTube, TikTok and Facebook) hosting self-publishing influencers, politicians and political advertising.
The UK's expanded future regime, if enacted, will further chill the appetite of investors for stakes in commercial media, reduce their value and ability to raise capital, and stifle beneficial consolidation.
UK news publishers are experimenting with generative AI to realise newsroom efficiencies. Different businesses see a different balance of risk and reward: some eager locals are already using it for newsgathering and content creation, while quality nationals hold back from reader-facing uses.
Publishers must protect the integrity of their content. Beyond hallucinations, overuse of generative AI carries the longer-term commercial and reputational risk of losing what makes a news product distinctive.
Far less certain is the role of generative AI in delivering the holy grail of higher revenues. New product offerings could be more of an opportunity for businesses that rely on subscribers than those that are ad-supported.
The Guardian online leads amidst challenging print, cost and advertising results, bringing the need to streamline operations to the fore. The Observer, most clearly defined in print, is a tidy option for divestment.
The Observer is a growth opportunity for Tortoise Media that promises mutual brand benefit, unifying an historic heavyweight with start-up and digital agility.
Some developments signal broader trends; a news start-up buying the world’s oldest Sunday newspaper could hardly dramatise the shift toward specialist digital media more effectively.
The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face.
Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.
Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.
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
Women’s sport press news coverage during the 2024 Paris Olympics has softened after three years of record-breaking highs, though it remains up 3.8x on 2016 levels
Publications vary in their representation, with populars increasing article numbers faster, though qualities continue to devote more space to women. Success is a key generator of ‘newsworthy’ content
Coverage of women’s sport, despite falling article numbers, is larger and more prominent than before, and the threshold for inclusion continues to fall—signalling wider normalisation of women in sports pages
Sony PlayStation 5 and Microsoft Xbox unit sales crashed in the last quarter, despite promotional discounting. Neither company appears able to reverse a clear consumer shift away from fixed consoles.
Nintendo Switch outsold Xbox and nearly matched PlayStation sales, even with the Switch 2 set to launch in 2025.
A radical change in hardware strategy and leadership will be the best solution for Microsoft to demonstrate a growth narrative following its acquisition of Activision. Gamescom this month may provide more clues.
Streaming fell back into the red again, although with further price hikes on the way—along with "modest" Disney+ subscriber growth—next quarter should see the beginning of a profitable trajectory
In the UK, Disney+ continues to grow engagement—if not necessarily subscriptions—however, we still await a boost from local scripted originals
While the performance of Disney's core segments appears to be stabilising, 2024 remains a year of unfinished projects