On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce

With over 550 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 One, covering: the future of digital experiences, the streaming economy, and harnessing AI for good. Videos of the presentations will be available on the conference website

This report is free to access.

Climate change is again a core theme of this year’s Media and Telecoms 2023 & Beyond Conference, as it has been since 2021 when the UK hosted COP26.

Published in March 2023, the IPCC's Sixth Assessment Report points to alarming warming trends due to rising greenhouse gas (GHG) emissions. Echoing the messaging of COP26 and COP27, the IPCC implores signatories: “Emissions should be decreasing by now and will need to be cut by almost half by 2030, if warming is to be limited to 1.5°C.” With many governments stymied by short-term political exigencies, it is businesses and people that must harbour the ambition for net zero that our planet requires. 

This year’s report highlights the climate change initiatives of TMT companies to decarbonise operations, and their society-leading role towards the environment. Media businesses are mobilising their touchpoints with their audiences—from news, to magazines, to audio-visual productions such as films, TV programmes, games and advertising—to inform and win over hearts and minds in favour of climate action. Case studies of the Guardian, WPP, Ad Net Zero, Bertelsmann, Vivendi, Sky, BT Group, and Virgin Media O2 provide best practice learnings.

Broadcaster decline accelerated in 2022, with record drops in reach and time spent. This was primarily driven by the lightest and youngest viewers leaving broadcast television while over-65s also reduced their viewing for the first time.

Loss of lighter viewers threatens the future viewing base of broadcasters and relevance to a new generation. Further, broadcaster status as the home of mass audiences becomes compromised.

However, retention of lighter viewers is not yet a lost cause. They are amongst the heaviest Netflix viewers, and the very lightest are spending more time in front of the TV set than previously—suggesting enduring appetite for TV-like content.

Sky is coping reasonably well with the shock of retrenching consumer spending, with revenues almost flat in Q4 2022.

However, profits are under pressure, as the increases in Sky’s costs cannot be fully passed on to customers, and the product mix is rebalanced towards telecoms and variable costs.

Management continues to leverage Sky’s brand strength and its critical mass of consumers to enter new markets, this time with home insurance.

DAZN has published its 2021 results, with losses extending to $1.4 billion, a situation that will likely have ameliorated in 2022, as the company looks to breakeven in 2023.

With the Champions League rights renewed in Germany, and crucial distribution deals secured in Italy and Spain, DAZN has a firmer foothold in its three major European markets.

Price increases in major markets and ancillary revenue streams will help stem losses, but achieving break-even by 2023 is still a challenge.

Sky has started to reap benefits from its substantial reduction in sports rights costs in Italy and Germany, helping to grow group EBITDA by 76% in Q3, despite a slight drop in revenue

With this change in strategy, the business model in Italy is undergoing an upheaval. Meanwhile, the UK continues to perform well, with further promise on the horizon thanks to the bold launch of Sky Glass

This streaming TV is a future-proofing leap forwards in Sky’s ever-more-central aggregation strategy, starting the business down the long path to retiring satellite, though this is probably still over a decade away

Sky’s revenue was up 15% in Q2, back to pre-COVID levels despite some lingering pandemic effects such as most pubs and clubs remaining closed. EBITDA fell by a third, driven by higher costs from sports rights, since very few live sports events took place in Q2 2020

The impact of “resetting” football rights is already evident in Germany and Italy, with 248k net customer losses across the group despite growth in the UK. However, Sky will make substantial savings, and we expect this will more than offset lost revenues

Meanwhile, Sky continues to strike deals with other content providers, solidifying its position as the leading household entertainment gatekeeper. In time, apps for NBCU’s Peacock, ViacomCBS’ Paramount+, ITV Hub, and, in Germany, RTL TV Now and DAZN, will all be aggregated within Sky Q

In a new chapter of a three year saga, the Ligue 1 awarded eight weekly games to Amazon for the 2021-24 seasons at a rock bottom price of €250 million per year, while Canal+ is left paying €330 million for only two fixtures per week.

Amazon makes a qualitative leap to become the lead broadcaster of a top domestic sport for the first time, probably reflecting more opportunism than a strategic shift.

Canal+ is asking courts to cancel the auction. Based on precedents, we expect the shift to undermine the total market for sport subscriptions.

Despite relying on a narrow IP base, US content production is booming, overwhelming other markets and seeking alternative distribution to cinema.

Responding to the rise of Netflix and Amazon Prime, studios seek to shift distribution from wholesale to retail—but only Disney may succeed.

Most content is likely to remain accessed by consumers through bundles. Provided they engage with aggregation, European broadcasters can adjust to the new studio model.

In a bold attempt to expand, DAZN has won Serie A rights for 2021-24.

With a worst-case scenario of 14% decline in revenue from domestic rights, the Italian league will limit losses, but runs the risk of more long-term damage.

Sky takes a calculated risk, and sends strong messages.