Unable to match Netflix, financially-pressed Hollywood studios are cutting content output and reassessing the DTC model
Price rises are being forced through, however for challengers this is asking a lot from subs, who don’t see an improvement in product or usage
The corporate landscape is fluid—loss-making DTC platforms and revenue-plunging linear channels are candidates for M&A
A cooler consumer market sees Sky now facing the same pressures as its SVOD competitors, with a loss of pay-TV subscribers in the UK.
However, Sky is performing better in telecoms in both the UK and Italy. These markets are less susceptible to recession with Sky also benefitting from its position as more of a challenger than an incumbent.
Uncertainty continues to loom over both the sale of its German platform and the upcoming allocation of Serie A rights in Italy.
Unprecedented growth in women’s sport is generating opportunities for publishers and advertisers. This year’s FIFA Women’s World Cup provides a chance to capitalise on the elevated coverage and interest
Women’s sport coverage must forge its own identity in the long term. News publishers play an enormous role by nourishing interest and discourse, creating brand opportunities and raising the profile of women’s sport
Articles currently must clear a higher bar for inclusion, though this will shift in the near term as coverage continues growing: variations in the type, style, and quantity of coverage highlight the progress made so far and identify areas of ongoing improvement
Sky has withstood the consumer crisis better than its telco peers, but owners Comcast are stepping up pressure nevertheless.
No buyer for its German unit has yet emerged. In Italy, the outcome of the ongoing Serie A rights auction will shape that company’s growth prospects.
Looking forward, Sky has built a solid content supply line and is likely to strengthen further from the deflation following the end of the SVOD bubble.
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.
Rupert Murdoch is seeking to merge News Corp and Fox Corp, split up a decade ago, to create greater corporate scale and streamline management.
A recombined News Corp would generate revenues of c.$24 billion based on fiscal 2022 results, with EBITDA of $4.6 billion, and an enterprise value in the region of $25-26 billion.
An additional rationale for News Corp is the financial protection of cherished news brands such as the Wall Street Journal and the Times inside a stronger enterprise. While the first phase of online transformations has been successful, sustainability of trusted, quality news media is never settled or guaranteed. The objective could hardly be more important now and in the coming years.
FAST services that include digital linear channels (FAST channels) appear to be experiencing solid growth in the US. In the UK, this success has been used to highlight a potential mechanism to diversify away from broadcast linear and SVOD
However, the growth potential of these services on this side of the Atlantic contends with a very different video market than the US—the free output of the PSBs remains prolific and of high quality, while prominence legislation is likely to tougher
Furthermore, overall viewing of long-form video content is declining. Any new FAST services will be fighting for a declining amount of screen time with poor content slates and little name recognition—however, growing demand for US content is an advantage
Broadcast TV viewing resumed its downwards trajectory in 2021, following a pandemic-inflated boost in 2020. The effect has been compounded by streaming services retaining much of their lockdown gains, consolidating their place at the heart of people's viewing habits
Within the shrinking pie of broadcast TV viewing—still c.70% of total TV set use—the PSBs have held relatively steady, whilst Channel 5 has increased both its share and absolute volume of viewing
However, further decline seems inevitable, with the largest components of the programming landscape, namely longstanding formats and the soaps suffering badly since the beginning of the pandemic. We await the effect of various new scheduling strategies
Sky’s performance across 2021 significantly improved, driven in Q4 by a nice c.5% growth rate in UK consumer revenues and the advertising rebound, but effects of the pandemic are still being felt with EBITDA down 30% on 2019.
The decline in Group revenue accelerated in Q4 due to the severe shock to the Italian operation from its loss of most premium football coverage, although we see upsides in a possible rights reshuffle.
In 2022, Sky can leverage growth vectors including bigger content bundles, Glass, advertising innovations and broadband. Consolidating SVOD and telecoms markets may be more favourable to price increases.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.