As Phase 1 digital shift from broadcast analogue to digital nears completion, individual platform growth trends have almost flattened out

The most likely area of change in platform trends over the next ten years concerns basic only subscription pay-TV, where we anticipate an overall increase in the total pay-TV base and change in platform balance arising from the introduction of low price basic packages

Phase 2 digital convergence between TV and the internet promises to take many years to reach maturity, and many questions need to be addressed in order to be able to assess its potential impact on the current broadcast TV marketplace over the next ten years.

Facebook is winning the battle for eyeballs and advertising in the internet display arena, with revenues projected to reach $5.3 billion in 2012

By comparison, we expect Google to achieve revenue of $2.5 billion, after traffic acquisition costs, though it remains the king of internet advertising, due to its dominance of search

Increasing advertiser demand for scale and performance will make many publishers increasingly reliant on one or both of the internet giants for audience and revenue growth

Apple has now sold 40m iPads – we estimate 4 to 5m in the UK – and goes into the Christmas season with no credible competitors beyond Amazon’s Kindle Fire, which is so far only available in the USA

Android phones are selling in huge numbers at half the price or less of the iPhone, but would-be iPad competitors are the same price or higher. With the continued absence of a meaningful content ecosystem for Android tablets it is hard to see consumers buying them in substantial numbers

Competing Android tablets have sold around a tenth as many units as the iPad, but others have sold far less: RIM’s PlayBook has been a major disappointment, forcing RIM to write off $485m of inventory

Citigroup has agreed to dispose of EMI’s recorded music division to Universal Music Group, and a Sony-led consortium is buying EMI’s music publishing division

UMG’s merger with EMI may raise competition concerns in the US and EU on the already concentrated recorded music market. Citigroup bears no risk

Depending on the nature of the strategic alliance between Sony/ATV Music Publishing and EMI Music Publishing, the EU may raise competition concerns on digital licensing

The spectacular growth of Netflix in the US has underlined the potential of online streaming subscription services offering films and other premium entertainment

As Netflix plans to enter the UK and Ireland in Q1 2012, its core US operations are in a critical phase of extremely rapid adoption, rising competition and escalating content costs, the successful outcome of which appears crucial to the international expansion of online streaming

The UK and Ireland possess features that make them an attractive first move into Europe; however, the competitive stakes are higher, while broadband download limits and traffic management present an added challenge – time will tell whether the UK and Ireland can sustain Netflix alongside LoveFilm and any other subscription online streamers

AOL, Microsoft and Yahoo! are partnering to cross sell non-guaranteed display inventory in the US, highlighting their need for scale in the face of increasing competition from Google and Facebook

Aggregating unreserved ads via their respective networks may boost share of ad budgets, but the focus on less valuable inventory means any impact is likely to be small

Short of extending the partnership to include all inventory and greater investment in technology there seems little the three companies can do to stop further erosion of display share, though revenues should continue to rise

Zoopla and The Digital Property Group, DMGT’s property portfolio which includes Findaproperty, Primelocation and Globrix, announced a merger on 14 October 2011. Under the terms of the proposed merger, DMGT would receive a 55% interest in the merged entity

A merged Zoopla and DPG will compete more effectively with market leader Rightmove, in a property market scaled down by one-third in terms of the number of transactions

We think the merger will give advertisers a better choice and constrain Rightmove’s pricing power, which has seen hefty fee increases on members, most recently in 2010, in 2011 and most recently again in November 2011

Spotify has just passed the 2 million subscriber mark in Europe and the US, and could reach 2.5 million by the end of 2011

Smartphone adoption and partnerships with MNOs and ISPs have proven a key driver of subscription in Europe for Spotify, which lacks a telecoms partner in the US. We think subscription is profitable

Spotify’s lower usage caps on the freemium tier will help compress total losses in 2011 in relation to the £25 million reported in 2010, despite the US launch

Content farms, which once threatened to undermine traditional publishers by flooding the internet with low value content, face significant challenges

Google’s changes to its search rankings in February 2011 reduced the prominence of content farms in favour of higher value content suppliers

In recent quarters, revenue growth at Demand Media’s content farm business has halted and revenues of About Group have declined

This presentation analyses the social games market in the UK. UK consumer spending on games software, like other recession-battered markets, has been flat for the last two years. At the same time, however, there has been rapid growth in PC-based social gaming, fuelled by the free to play nature of most games and viral marketing capabilities of social networks particularly Facebook. By 2015, we estimate that social gaming across PC, mobile and tablet devices could be worth up to £400 million, though much of this is likely to be driven by adding ‘social’ layers to existing games franchises.