Accelerating print advertising declines in 2016 are placing pressure on local newspaper publishers to deliver faster online growth

However, digital growth is being supported yet compressed by Google and Facebook; we estimate SME expenditure on Google is roughly 2x the local press, and we expect SME spend with Facebook to match local newspaper advertising revenues in two to three years

Publishers need to grow consumer registrations and subscriptions, digital display and also digital marketing services, in partnerships with the tech giants – but first they have to convince consumers they have relevant use-cases that global platforms cannot replicate

The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results

Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising

Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse

The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium

Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment

2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers

US entertainment groups have not been disrupted by the rise of digital media. Long running franchises drive growth across diverse sectors, starting with pay-TV and SVOD. US television advertising is rising in line with GDP, while the online video ad market is flourishing, with much appearing alongside the majors' scripted content

Studios' cable channels are their most profitable assets, but M&As with distribution platforms, including Comcast's aquisition of NBC Universal, have usually failed to deliver synergies

The Donald Trump presidency could leverage hostile public opinion towards mergers to undermine the AT&T bid for Time Warner; but it could also stimulate M&As if it granted tech companies a tax break to repatriate profits. A more protectionist administration could also bring about a less benevolent attitude towards majors' foreign operations

Whether the US has reached “Peak TV” —the apogeic volume of original scripted series—is debatable, but the mass of content being produced is unparalleled

As television continues its transition from a disposable medium to a permanent one, and an increasing number of outlets are creating original, scripted programming to keep up or differentiate, does this American explosion have ramifications for the UK consumer or broadcaster?

Simply put, the UK’s more concentrated television landscape limits exposure. And, counter-intuitively, an unsustainable focus on scripted drama could play into the hands of the traditional broadcasters, whose future strength may lie in the diversity of their offering

A post-Brexit recession will cause a hyper-cyclical decline in the advertising revenues of broadcasters and publishers

The Vote Leave idea of the UK joining a free trade area for goods with the EU would sever UK access to the Single Market for services, damaging the export-reliant audiovisual group, among many other sectors of strength

Made-in-the-UK IT, software and computer consultancy services will lose eligibility for government procurement tenders once the UK is an outsider to the EU

The sale of the i, the innovative 2011 launch by the Independent, inevitably led to its parent’s death in print form and pushes two media experiments into the marketplace

ESI Media becomes the first publisher to switch a traditional national news brand into a digital-only service, while Johnston Press has developed a new local-national platform to compete with Trinity Mirror

Content publishers will increasingly experiment with vertical models and membership models for a range of services including access to some content as the challenges of the digital advertising market begin to mount

By fully acquiring Local World, Trinity Mirror has bought scale advantage in the local media marketplace, and accelerated a much needed growth story for digital assets.

The medium term outlook for local media continues to look stormy, underlining the importance of investment in technology and new platforms for publishing, journalism and marketing, essential for longer term sustainability.

Consolidation is needed to drive a more cost-effective investment phase as the transition to digital continues apace, provided the competition authorities do not interfere.

Non-subscribers can download this report in full - alongside all our other coverage of the BBC during the Charter Review process - from the 'BBC Charter Review' page of our site.

BBC proposals for local media set out on 7 September offer solutions to an alleged market failure, without much evidence, contained in February’s Future of News report.

There is no dispute that local commercial print and online media operations have suffered heavy revenue losses since their peak a decade ago – the industry is, however, still profitable, innovation and online growth are helping to stabilise the top-line, and new enterprises are emerging.

Local media publishers prefer a turbo-charged BBC policy of linking to their sites to the proposal for a local media digital hub fed by publishers and 100 BBC journalists.

UK advertising is having a bumper year – some of the strongest growth for two decades – but print is receiving none of this upside. The year started soft then plummeted in the weeks immediately before and since the General Election, with increasingly serious implications for the sector

A reasonably steady UK economy and explosive TV and digital spend evidence a structural decline for print media display, though specific factors also point to some cyclical effects

We forecast a slowing of the rate of decline in H2 2015 and 2016, but we believe sooner or later the industry will have to work closely with agencies and brands to establish new terms of engagement for print media