Investors warmly welcomed WMG's IPO of non-voting shares in March, valuing the company at $12.8bn, a 388% increase in the company's valuation since Len Blavatnik acquired it in 2011

Investors are placing a bet on music streaming. WMG's strength in the US market due to R&B and Hip-hop in its catalogue allowed it to outperform UMG and Sony on recorded music over 2015-19, an advantage that will dissipate when growth shifts to emerging markets

COVID-19 impacts explains WMG’s 6% decline in recorded music revenues for calendar Q2 2020, despite an 8% rise in digital revenue, as revenues from physical sales (vinyl and CD) sank, and also those from artist services due to the halted 2020 live music season

Admissions and box office revenues in 2020 will be the lowest in over three decades. The pandemic forced the closure of theatres, putting pressure on cinema to a degree unlike ever before.

The reasonable success of the straight-to-TVOD releases under lockdown has some studios suggesting TVOD distribution will live alongside theatrical in the future. However, simultaneous releases are unacceptable for cinemas and TVOD’s sub-optimal financial reality means theatrical release will remain essential for most films.

TVOD distribution will temporarily play an expanded role, while SVOD will pursue its climb up the distribution chain and big studios will assert their increased power to negotiate more favourable terms with cinema owners.

Broadcast radio has maintained its reach and listening time over the past decade: younger people listen less than before, but this is made up for by an ageing population.

The challenges to radio come from changes in distribution technology in the home and in cars, and from product innovation in the online audio space.

Over the next few years, we predict continued stability in radio, but as technology brings it into closer competition with online audio, broadcasters will have to continue product innovation.

Despite operating in a challenging market, Sky has continued to increase revenues, with the resilient performance of its direct-to-consumer and content businesses offsetting the disappointing drop in advertising income.

Across FY 2019, EBITDA was up 12.2%; profit growth driven by a significant reduction in “other” costs as large one-off effects disappear and cost-cutting continues.

Extended distribution deals with Netflix and WarnerMedia will protect Sky’s content proposition for the coming future, as would the mooted integration of Disney+.

Comcast’s new, on-demand service, launching in April, is an attempt to break NBCU’s unsustainable dependence on sales to Netflix and other SVODs. Peacock provides a path of digital transition for advertising-funded TV with a revamped low-load, high cost-per-thousand model.

Reach will be built with a free online tier and distribution to Comcast subscribers. Peacock seeks carriage from other pay-TV operators, with which reciprocal deals would make sense (i.e. HBO Max on Comcast alongside Peacock on AT&T’s platforms).

In Europe, where Comcast has no existing major free-TV offering to transition, launching Peacock will be challenging but could present Sky with ideas to counterweigh Netflix on its own service.

While Sky’s overall revenues continue to rise, Q3’s growth was hampered by a significant fall in advertising revenue and to a lesser extent a slowdown in content sales

Underlying EBITDA growth was in the mid-teens. Next quarter, Sky will continue to benefit from lower Premier League rights costs versus last season, and profit appears on track to meet full year guidance

Q3 saw a rare decline in Sky’s total number of customers due to the conclusion of Game of Thrones. Sky clearly understands the value of unique content—recently extending its HBO deal. In our view, this was essential, since without a distribution deal for Disney+ (launching in the UK in March) Sky would lose Disney’s alluring content

New SVOD entrants are prioritising reach over revenue in the US with extensive ‘free’ offers, including Apple TV+ (to hardware buyers), Disney+ (to Verizon customers), HBO Max (to HBO subscribers) and Comcast’s Peacock (to basic cable homes)

This is the latest development in an unfolding global story of partnerships, continuing on from multiple Netflix and Amazon distribution deals with platforms, bringing benefits to both parties

In Europe, Sky faces price pressure, but it has secured its HBO partnership and can now talk to Disney from a position of strength

Spotify is investing heavily in podcasting through acquisitions, original content and product innovation

It is under pressure to reduce dependence on record labels, whose power makes generating large profit margins difficult. Podcasts promise a non-music content genre where Spotify can capture more value

Secondary benefits abound: Spotify can take an active and lucrative role in modernising online audio advertising, it can solve the podcast discovery problem, and engagement across more forms of audio will improve retention

Sky’s Q2 results were encouraging overall, with significant subscriber growth swinging direct-to-consumer revenue growth back to positive. ARPU declined once more, since new streaming customers are taking lower-priced products, but total revenue growth accelerated to 2.4%

EBITDA rose 20%, primarily due to the dropping out of some large one-off costs. Next quarter, Sky will begin making savings on the new Premier League rights contract, and increased football rights costs in Italy and Germany will have annualised out

Having launched Sky Studios in June, Sky is focused on producing original European content, with ambitions to double spend over the next five years, in a calibrated response to the Netflix-led race for content

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Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations

The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify

The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews