UEFA and Relevent, a newly appointed media rights sales partner, are already surveying the rights market for the next cycle starting in 2027.
With minimal competitive tension in major European markets, incumbent broadcasters are unlikely to increase their bids.
Relevent will, however, try to leverage increased US appetite for soccer to lure a streamer into a global deal.
Most regulations within the TAR26 condoc were continuations of the previous pro-investment regulations, albeit with little progress made on copper withdrawal, no extra help for the struggling altnets and a number of unexpected twists at the margin.
Within the detail, the most significant hit is the return of cost-based price controls to some leased line charges, and across all of the proposed changes, Openreach has on balance fared worse than retail ISPs, albeit at a scale that is manageable within the BT Group.
Ofcom showed no inclination to offer any extra help to the struggling altnet industry, regarding its inefficiencies as being its own (and its investors’) problem, with consolidation the only sensible path forward for most.
Globally, subscriber growth remains the driver of topline streaming improvements—86% of Netflix’s 2024 global revenue growth came from subscriber additions, with 85% for WBD and 54% for Disney
However, in mature markets growth is underpinned by ARPU. Subs growth is becoming volatile with more customers churning in and out of services around key releases
Relevantly, the race to scale up SVOD ad-tiers will continue to have an ARPU-dilutive effect: CPMs are lower than expected and the growing price divide between premium and ad tiers will persuade more existing users to spin down
Podcast reach and share continue to grow, albeit slowly, aided by need-state differentiation and increasingly online, on-demand media habits.
The ad market remains small with the long tail of podcasts difficult to monetise, but an industry move into video—on both YouTube and Spotify—offers substantial reach and monetisation opportunities.
Publishers and broadcasters see podcasts as an essential brand extension enabling greater reach, whilst successful podcast networks have tapped into more relaxed, commercial formats.
YouTube is now the UK's fifth most-used venue for finding news, and a key focus for UK broadcasters and publishers. They made up a quarter of UK trending news videos in 2023, competing with native YouTubers and US broadcasters
We find that YouTube’s algorithms tend to funnel users from news content towards non-news within a few videos. The reverse trend, of non-news to news content, is almost non-existent
We do not find evidence of widespread brand safety concerns impacting advertising on news videos, though publishers still note YouTube is better for exposure and consumption than it is for generating revenue. The ad load is largely in line with other genres
The mid-sized UK altnets Zzoomm and FullFibre have agreed to merge, in what looks like an all-share merger of (nearly) equals, both of whom have been struggling to raise finance.
Why did they pick each other rather than the larger CityFibre/Netomnia/nexfibre options? Valuation may have been the key factor, but it has left them still vulnerably low scale with further consolidation necessary.
Much more consolidation is required for the sector to be sustainable in our view, and further financial distress may be required for realistic valuations to emerge.
Sky UK and Warner Bros. Discovery have reached a deal for the pay-TV platform to carry WBD's Max, non-exclusively, when it launches in early 2026. The ad-supported version will be bundled at no extra charge for Sky and Now subscribers
The non-exclusive nature of the deal appears to have invigorated Sky into a restructuring of its packages, essentially unbundling Sky Atlantic for the first time
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.
Under financial stress, most streaming platforms are increasingly focusing on third-party distribution. Thanks to bundling, top streamers like Netflix can increase the lifetime value of subscribers, while smaller streamers widen their reach.
Bundles of streamers may have some potential in the US, but in Europe—with Netflix not interested—they do not have the necessary scale.
This trend towards bundling favours incumbent pay-TV aggregators like Sky and Canal+, but in the longer run they face competition from tech video marketplaces.
The UK altnets collectively lost over £1bn in 2023, with most metrics unrealistically distant from what they need to be for a sustainable model, particularly the smaller retail-focused operators.
Consolidation is essential for survival, and CityFibre at least has a reasonable case for long term sustainability with a wholesale model and Sky as a customer, and looks the most viable altnet consolidator in our view, with VMO2/nexfibre able to pick up the pieces should the sector fail.
A lack of long-term viability and related financing difficulties will dramatically slow network roll-out, reducing the altnet pressure on the rest of the sector even if consolidation improves penetration levels.