UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.
Sky and Canal+ have tied down key contracts until towards the end of the decade, while DAZN now has domestic rights for four of the top five European football leagues.
Tech players want live sport, but have distinctive demands and without new monetisation models they will not challenge pay-TV incumbents.
We analysed hundreds of ads on YouTube, the biggest online video platform. Direct response campaigns predominate, especially among finance, ecommerce and technology buyers.
YouTube on TV hosts more brand campaigns with unskippable >30-second ads. In the UK, YouTube viewing on the TV set will grow c.80% by 2030, changing the profile of YouTube advertising.
YouTube generates about 85% of its revenue from ads. We found it also guides user behaviour by ramping up ad load for logged-out users so that they log in.
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
In the past, broadcast TV and YouTube content has been poles apart—both in substance and the need states they served. This is changing, with the overlap in offerings growing
We estimate that c.61% of viewing of YouTube Trending content is of videos that could be considered TV-like. Similar programming makes up c.35% of broadcast TV viewing
YouTube’s videos are also becoming longer, raising audience tolerance and expectations, and allowing the service to compete in a broader range of genres. However, this will be challenged by monetisation limitations
We forecast broadcaster viewing share to drop to 52% in 2030 (from 58% in 2023), with the firming of its on demand viewing unable to balance out the decline of live: this is a slight improvement on our past estimates, with decline slowing.
SVOD viewing will begin to plateau in 2025, as video sharing platforms (YouTube, TikTok, Twitch) take an increasing share of engagement.
On the TV set, YouTube will grow strongly: we predict a 90% increase from 2023 to 2030. This is from a low base with broadcasters retaining 70% of viewing on the main screen in 2030
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.
TikTok has been dealt a devastating blow as a US bill has been signed into law forcing owner ByteDance to sell within a year or face its removal from app stores.
The stakes are higher than in 2020—China's opposition to a divestment will make an optimal sale harder to conclude, so all sides must be prepared for a ban.
The TikTok bill introduces extraordinary new powers in the context of the US and China's broad systemic rivalry, though online consumer benefits will be limited.
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.
Many telcos are surprisingly advanced in exploring GenAI opportunities, mainly in gleaning cost efficiencies in managing their complex systems, but it may also provide a revenue boost.
European telco CEOs made a heartfelt—if not entirely convincing—plea for regulatory/policy help via a ‘new deal’ to help support future investment, highlighting a genuine lack of price/investment balance in European telecoms.
The most convincing specific regulatory/policy solution is in-market consolidation, with other steps either less effective, or unlikely to happen, but a general shift in regulatory attitude could prove helpful in many small ways.
Vodafone’s Q3 results were slightly disappointing following the green shoots of Q2, with growth in Germany slipping back again, albeit some of it already flagged.
It is difficult to imagine the full year results event being a positive catalyst with the likelihood of a dividend cut, a recognition of the hard-currency reality of the financials, and a still challenging outlook for FY 2024/25.
Deal-making is a positive counter with a highly accretive deal still in the offing in Italy, and the prospect of execution in Spain and the UK. Various inorganic deals with 1&1, Microsoft and Accenture will also be helpful, although none of them as valuable as an improvement in the core operations.