The BBC announced that it should be active in planning for broadcast switch-off, but that the UK should be fully connected with universal affordable access to content.

World Radiocommunications Congress (WRC-23) takes place next year and the long-term future of DTT across EMEA will be debated. If WRC agrees coprimary access to existing DTT spectrum for mobile, this likely spells the end for DTT in the early 2030s.

By 2034, at the current migration rate, nearly 20 billion hours of TV will be viewed in DTT homes—just 20% less than today—with over 80% of that being to adults over 55.

As more viewing is delivered on-demand and online, the jeopardy and immediacy of sport make it one of the few genres which will remain overwhelmingly live.

Shared national experiences that allow as wide an audience as possible to follow simultaneously are increasingly rare in a fragmented media landscape, and public service broadcasters are still the only media capable of providing them.

The listed events regime should not just be protected but at least extended to include live digital rights: although the vast majority can presently access these events via DTT, changing viewing habits, eventual DTT switch-off and a shift in how rights are packaged means that action should be taken now to guarantee continual full, free availability.

The UK’s cost-of-living crisis will compress real household disposable income by 4.3% in fiscal 2022/23, despite the Energy Price Guarantee (EPG) in place for this winter, with the pain compounded by rising interest rates until mid 2023, provoking a mild peak-to-trough decline in GDP of 2-3%

With CPI inflation forecast at 7% in 2023, and real private consumption forecast to decline by 1.9% (OBR) at the very least, advertising could still rise by 2-3% in 2023, a decline in real terms, with H1 particularly affected relative to H2, when declining CPI will allow monetary policy to relax

Not all households are equally affected by economic headwinds, and those that are more resilient will be the most attractive targets for businesses in 2023: those in  the top half of the income distribution, particularly older, empty-nested homeowners without mortgages

Vodafone’s downgraded guidance is due to its woes in Germany rather than the economy. There is some limited reassurance that this will turnaround soon.

It remains challenging for Vodafone to achieve its revised FY guidance with a 7ppt improvement in underlying EBITDA growth required to get there.

Leverage and cash-calls are much improved, and the dividend looks assured, but the Vantage and German deals mean escalating pressures on EBITDA.

Online advertising growth at big tech firms has flatlined, with real-term declines at Meta and YouTube. The weakness is concentrated in higher funnel ads.

Advertising is a leading indicator. A hardware slowdown is coming, services growth is stuttering, and businesses will want to save on cloud services.

Investors are hostile to attempts to spend through a downturn, but competition from TikTok and developments in AI demand targeted investment, while Meta is pot-committed to the metaverse. Tech giants are looking for savings elsewhere.
 

Revenues were stable year-on-year in Q3, with UK growth offsetting Continental decline. All three markets posted positive customer net adds across the quarter.

Underlying profitability is improving, and although World Cup-related changes to the football schedule depressed net income in Q3, they will lift it in Q4.

A possible sale of Sky Deutschland would make sense if it helps the buyer reach superior scale within Germany.

Amidst a wider economic slowdown in the UK due to the cost-of-living crisis and the rising trend of borrowing costs, the Q4 retail spending peak (27.9% of total retail in 2019) will continue to be the dominant theme for retailers and advertisers in Q4 2022

Pandemic work and life patterns more fully reversed in 2022, with offline retailing recovering. Online share is ticking down to a new baseline of c.25% of retail (excluding fuel), thanks to food stores, the main pandemic gainers—now 10% of the vertical and contributing a huge 15% of online retail spend

Online promotions (Black Friday, Cyber Monday) have gained traction over the years, drawing retail spend into November from December, and inevitably motivating a pull-forward of advertising expenditure, with online advertising increasingly focused on the bottom of the consumer purchasing journey, favouring intent over brand

60% of Chinese online ad spend is directly driven by ecommerce, compared to 40% in the West. The gap will close as content and ads move closer to transactions.

General search engines are not central to the customer journey in China: Baidu fell below 10% of online advertising last year, compared to Google’s c.55% share in the UK.

The Chinese model now has a vector to the rest of the world in the form of TikTok, whose parent company ByteDance added more retail GMV in China than Alibaba last year. TikTok wants to grow video shopping in the West, targeting a huge $470 billion in transactions by 2027.

The new Truss/Hunt tandem is a needed response to the crisis affecting the credibility of the UK Government in global financial markets over its decisions on economic policy, although it will take time to re-establish credibility and stability

The cost-of-living crisis is inexorably widening from goods and services to the interest rates paid by Government, businesses, and households, exacerbating the recessionary trend of the economy

Implications for UK TMT range from the recession in advertising expenditure in2023, to the delay of the Media Bill (including the privatisation of Channel 4), alongside complications for mergers and acquisitions of UK companies

Vodafone is in the midst of a flurry of M&A, likely driven by its share price, which is at a 30-year-low, and stubbornly high leverage as an economic crisis looms.

While the mooted Vodafone/Three merger has the potential to add meaningful shareholder value, the German and Vantage deals are designed to ease Vodafone’s ongoing leverage issue—with debt relief up front paid for with future EBITDA.

Getting leverage under control will be helpful, but the focus should continue to be Vodafone’s operational performance, particularly in Germany, and its ability to deliver EBITDA promises in challenging circumstances.