UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.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.
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.
In the next fixed line regulatory review—TAR 2026—Ofcom is likely to maintain light regulation on Openreach’s pricing levels, while also maintaining strict restrictions on its pricing structures, which both help altnets.
On other matters, none of the interested parties (Openreach/altnets/ISPs) look like getting exactly what they want, but by and large the industry will likely get what it needs—regulatory stability with a broadly pro-investment slant.
The next TAR in 2031 is likely to be more dramatic, but by our estimates, even a full return to cost-based charging will not result in significant wholesale price cuts, which is likely to be a relief to longer term investors in BT and the altnets alike.
Both subscriber and ARPU growth are showing clear signs that they are topping out. We expect increasing volatility in both metrics moving forward as low-ARPU subscriber additions tug against price hikes and churn-cycling in wealthier regions
Many of the studios’ streamers are now flirting with profitability thanks to cost-cutting efforts, while cord-cutting only seems to be accelerating
Almost 50% of streamer sign-ups are opting for the ad-tier. However, it will be some time before ad-tiers become a ‘meaningful’ revenue stream
CityFibre has announced a deal to supply the second largest UK ISP Sky with wholesale broadband services, doubling its addressable target market at a stroke, in a blow to Openreach.
This may be just a foot in the door for CityFibre, but it is a critical one, and puts it firmly in the driving seat for altnet consolidation. There are also positives for VMO2 and other altnets hopeful of an eventual wholesale deal with Sky, and for retail ISPs now that the altnet sector is pitching towards wholesale away from retail.
While this is obviously bad news for Openreach, we see it more as an absence of a potential positive than something that might actually worsen current trends, and there are mitigating positives for the wider BT Group.
Market revenue growth was just positive at 0.2% in Q2, as lower price increases were mitigated by some temporary ARPU gains.
Growth is likely to drop negative in the rest of year however, with continued weak volume growth compounded by temporary ARPU gains unwinding.
Pricing structures differ quite widely as regards landline offers and out-of-contract pricing, and all could benefit from adopting best practice, a marginal gain worth pursuing in a tough market.
The US National Basketball Association has awarded its global broadcasting rights to Disney, Comcast and Amazon for $76 billion over eleven years.
The NBA is helping pioneer a new era of rights deals, by agreeing global contracts and a strategic DTC partnership with Amazon.
Sport stands at the crossroad of Amazon’s video, advertising and retail strategies.
After an arduous ten-month process, France’s Ligue 1 has reached a tentative deal to license its 2024-29 broadcasting rights at a price 14% down on the previous cycle.
Adding France (for €400 million p.a.), DAZN now has prominent positions in four out of the five big European markets. With a weekly top pick (for €100m p.a.), beIN consolidates its model.
Attention turns to distribution, and whether DAZN will patch up its partnership with Canal+.
Amazon is challenging online bargain competitors head on by launching its own direct-from-China sales channel, in a strategic reversal that aims to expand its audiences and competitiveness by segmenting product sales
Direct-from-China removes the competitive advantages of Amazon fulfilment and Prime to create a two-tiered Amazon for ultra-low-cost goods, making core fulfilment more efficient and providing advertising opportunities
The new product aims to grow Amazon's reach and relevance to non-Prime audiences, adding value across the Amazon ecosystem: offering efficiency for sellers and lower prices for consumers
Retail media, a ‘new’ form of advertising, is growing the overall advertising market with a highly personalisable and attributable offering, as other targeting mechanisms are threatened by the deprecation of third-party cookies.
Omnichannel retailers are ramping up third-party ad sales to boost margins, alongside less visible but significant growth opportunities for sales of first-party customer data for ad targeting elsewhere.
Long led by Amazon in the UK, the retail media is now shifting the broader advertising ecosystem: competition and innovation are rising as retailers seize growth opportunities, with incumbents threatened by disintermediation.