This Digital UK 2015 report is a collaborative effort by research partners Enders Analysis and EY. Encapsulating materials in the public domain and proprietary to the partners, it sets out to demonstrate the vibrancy of the UK’s digital economy and its potential for growth.

Key UK strengths include:

• Rapid expansion of Next Generation Access (NGA) network coverage and 98% population coverage of 4G by the end of 2015 thanks to private and public investment
• 45 million adult consumers on fixed line broadband and 45 million forecast to be using mobile broadband by 2020, thanks to the embrace of smartphones and tablets
• Business e-commerce sales to consumers and other businesses of £556 billion in 2013, or 20% of non-financial business turnover, on a par with the US

The UK’s world-class digital infrastructure and its vast pool of smart connected consumers are unique strengths, and could be converted to leadership on the digital business models of the future. However, as important as the tech industry is to the future of the UK, the UK’s many existing businesses in other sectors could also aspire to be ‘fit for the digital age’. This will not only drive value for UK businesses, but if pursued energetically, it will help resolve the UK’s productivity puzzle.   

The report is free to download on the event website http://www.digital-uk.london/

Ofcom anticipates opposing the use of core DTT spectrum for mobile broadband at WRC-15 in November in recognition of the importance of broadcasting

Assuming the aligned UK and wider European position prevails at WRC-15, DTT spectrum will be exclusive to broadcast until 2030, providing certainty for broadcasters and programme makers to enable ongoing investment in the platform

However, there will be continued pushback from the mobile network operators to expand the spectrum made available to mobile broadband earlier, and broadcast will need to remain as vibrant and competitive as it is today

Speculation has arisen about a possible acquisition by Sky of Mediaset Premium, the DTT competitor to Sky Italia. The unprofitable platform faces a 50% cost increase this summer due to the start of new football broadcast contracts

Getting rid of competition would allow Sky to raise prices, but also burden it with the new contracts. At best, if it kept the Premium subscribers on DTT to limit churn, Sky would have a small revenue upside

But the regulatory risk looks substantial, including mandated third-party access to the platform and wholesale of content. On balance, we believe that it would be better for Sky to let the situation play out

In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead of company guidance and consensus expectations

The positive news about subscriber numbers, which saw a sharp jump in share price immediately after the results, was heavily reinforced by Netflix’s announcement of its aim to expand its global base from 50 to 200 countries over the next two years and generate a material profit from 2017

As usual Netflix provided no international details other than to say that LatAm had passed the 5 million milestone in Q4. Elsewhere, BARB data suggest that Netflix passed the 4 million milestone in the UK, while it is still too early to assess the longer term potential of its September launches in France and Germany

For the second year running, 2014 has seen a steep year-on-year decline in total daily average viewing time, which fell by almost 5%, and was again, as in 2013, greatest among younger age demos, especially among children aged 4-15 where the decline reached double figures

Connectivity and the rapidly growing population of smartphones and tablets appear the main, though not the only, causes of a decline that appears general across the main PSB, PSB family and non-PSB channel groups. The decline nevertheless varies by channel genre, with the more youth oriented, such as Children and Music, feeling the connectivity squeeze the most

Whilst the great majority of non-PSB channels are only available on the pay-TV platforms, the DTT platform provides a significant audience and advertising contribution (ballpark estimate of £150-200 million per annum) to the relatively small group of leading free-to-air non-PSB channels, which are also less constrained in developing their online initiatives than the mixed advertising/subscription non-PSB channels on the pay-TV platforms

One year on from the launch of the latest generation of gaming consoles Microsoft and Sony remain locked in a high stakes struggle for dominance of the gaming industry, and longer term viability of the console category.

Sony’s PS4, which we estimate outsold Microsoft’s Xbox One 3:1 in Q3, looks certain to win this round in a return to form for Sony following the relative disappointment of the PS3. Microsoft, struggling from missteps early in the Xbox One cycle, may have left it too late to catch up.

The wider games market continues to shift to mobile and online gaming, as developers seek to exploit the vast installed base of connected devices. New console gaming experiences from Steam and Amazon may be the primary growth driver for controller-based gameplay.

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

Underpinned by a legislative regime since the 1970s designed to prevent sex discrimination and unequal pay between men and women, the UK has enjoyed successive and ever bigger waves of young women gaining the education and skills to enter the work force as professionals, now standing at 5 million strong. The UK also boasts 1 million female-led companies and the digital age has greatly expanded the opportunity for entrepreneurship for women to be their own bosses.

The workplace inflicts a stiff ‘motherhood penalty’ that produces a yawning gender pay gap for women in their 40s and 50s as men more readily gain access to managerial and executive positions, radiating from there to board positions, where Lord Davies’ initiative for FTSE companies has led some to endorse the merit of a diversity of directors on boards.

On the whole, however, employers often overlook the potential to optimise talent management practices to accommodate maternity and support the work-life balance of employees, prevent sexism and unequal pay, and offer women an equality of opportunity to accede to top jobs. Companies that do so could be more likely to establish a lasting competitive advantage and the UK economy will gain too from releasing the talent and energy of women at work.

If you are not a subscriber you can download the pdf here

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series, and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

The General Election in May 2015 looks to be one of the most unpredictable in living memory. A hung parliament seems the most likely outcome, but the likely government after May is still unclear. Whereas in previous elections there were at most three swings that mattered, between the Lib Dems, Labour and the Conservatives, in this one there are arguably 10 or 11. There has been a huge increase in complexity, which, along with the virtually neck-and-neck polls, is what makes the outcome so much harder to predict.

In this report, we describe the context of this election, analyse the prospects for each party, and illustrate three possible outcomes of the election, detailing what would be necessary for each of them to occur, and what sort of government each of them would lead to.