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.

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
 

The UK’s choice of policy for rebalancing the relationships between news publishers and tech platforms is on the agenda of the CMA’s Digital Markets Unit for 2025. The UK is expected to steer clear of the pitfalls of Canada’s news bargaining regime, which led Meta to block news, crashing referrals.

In the UK, Google’s relationships with news publishers are much deeper than referrals, including advertising and market-specific voluntary arrangements that support a robust supply of journalism, and dovetail with the industry’s focus on technology (including AI) and distribution.

The rise of generative AI has also ignited the news industry’s focus on monetising the use of its content in LLMs. AI products could threaten the prominence, usage and positive public perceptions of journalism—this might require progress in journalism’s online infrastructure, supported by public policy.

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.

On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, Salesforce and Adobe. 

With over 580 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry. 

This is the edited transcript of Session Three, covering: consolidation in the telecoms sector; fixed-mobile convergence; and the future of the fibre industry. Videos of the presentations are available on the conference website.

Big news publishers are pursuing licensing deals with AI companies, chiefly OpenAI. Not all publishers will see a substantial return; while some news may be important for training AI models, not all publisher content will be

Litigation is a threat point when negotiations stall (see the New York Times), but the copyright status of Large Language Models (LLMs) is uncertain. In the UK, there has been no government intervention (on copyright or otherwise) that could facilitate licensing 

Publishers’ bargaining position is strongest when it comes to up-to-date material that could be important in powering some AI consumer products. They should seek deals to support their journalism, while bearing in mind the risk that new products may get between them and their readers

 

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.

IFPI reports trade revenues from streaming rose 10% in 2023 to reach $19.3 billion, and we estimate Spotify contributed about $7 billion. Spotify also rewarded music publishers with about $2 billion in royalties. 

Spotify’s Loud & Clear data on royalties paid to the 225,000 professional and aspiring artists served to its 600 million users reveals a bulge in the middle part of the distribution in favour of Spanish language artists as the service expands in Latin America.

The top 1,000 earners are mainly artists at the top of the charts in the US and UK markets, which together contribute half of Spotify’s revenues and thus royalties. Top earner and top all-time streamed artist Taylor Swift earned over $100 million in 2023. 

The US is intent on preventing the CCP’s goal of AI supremacy by 2030, banning exports of advanced AI chips to Chinese companies. So far, these bans have largely been shrugged off to create a new commercial dynamic in the region. 

Huawei wields a de facto monopoly on the manufacture and sale of advanced chips in China. Huawei also sells cloud services globally and threatens Apple's $70 billion in Chinese revenues through its premium handsets. 

China’s AI regulation is highly supportive of the training and deployment of Chinese-language LLMs developed by tech platforms, startups, and device makers, with meaningful revenue gains only appearing by H2 2024. 

Streaming profitability beckons, but owes much to the profitable services folded into companies’ DTC segments alongside the headline streamers.

There is a broader move towards bundling and price rises. The former bolsters subscriber additions and lifetime value but is ARPU-dilutive, while price rises will bump up both ARPU and churn.

2024 marks the first year with multiple players at scale in the ad space, as Prime Video entered the market. Other streamers with high CPMs and lower scale may be forced to re-examine their offerings.