Thanks to lockdown momentum, Amazon Prime Video enjoyed a 48% YoY increase in UK reach to 9.5 million households in Q3 2020. Christmas time coverage of the Premier League seems to have played a part, informing Amazon’s approach elsewhere.

Upping its game, Amazon has acquired more expensive Champions League rights in Germany and Italy. It also bid in Monday’s failed French Ligue 1 auction.

In the impending Premier League tender Amazon may be ready to increase its outlay if needed to meet subscribers’ expectations, but without any real incentive to challenge Sky and BT’s dominance.

The EU-UK Trade and Cooperation Agreement (TCA) grants zero-tariffs only to goods compliant with rules of origin, a subset of the goods previously traded freely, and dramatically raises barriers to exports, especially services, relative to the Single Market

UK (and EU) traders of goods must assume new onerous, costly and disruptive customs clearance procedures, also applicable to other third parties, which are certain to radically downsize trade with the EU, especially B2C e-commerce, typically single parcel

The UK’s initial vision of Global Britain via a pact on trade, security and defence with the US, rather than the EU, is not a priority now for President Biden, who also has a stake in the open border on the island of Ireland

The Consumer Electronics Show (CES) this year was held virtually, with announcements revolving almost exclusively around the pandemic and addressing changing consumer needs. The evolving use of tech at home was a particular focus for brands as consumers are now demanding more of their homes than ever before.

Following a record 2020, ecommerce was a topic that garnered a lot of attention, with retailers emphasising the importance of a consumer centric 'digital first' strategy, accepting the fact that ecommerce is going to be bigger than it ever has been.

Amid increased tech use at home, moves to ban third-party cookies and impending regulatory changes to data collection in the US, the conversation around data and privacy was more prominent than ever before. First-party data is going to be more valuable, even if tracking restrictions limit what can be done with that data.

The value of certain sports rights can be appraised through three major metrics: the ability to command viewing/engagement, the ability to drive subscriptions incremental to other rights, and the propensity of those subscribers to provide the rights holder with additional revenues.

In this report we examine these three metrics in order to gain an understanding of the tensions in the market, along with the reasons as to why there is competition (or not) for certain rights.

Unsurprisingly, outside of a few primary sports rights, there are an abundance of secondary rights which find it difficult to display their value over others. Their value relies just as heavily on whether rights holders are committing to, or retreating from, major rights.

The UK entered 2021 in the grip of a dangerous third wave of the pandemic, despite Lockdown 3.0 over Christmas, driving down trips taken by people to depressed levels last seen in Lockdown 1.0, reducing economic activity for Q1.

Time spent at home closely tracks the severity of lockdowns and mandates to work from home (WFH). Underpinned by the UK’s advanced digital infrastructure and services, WFH is providing resilience to Gross Value Added (GVA) creation, while staff in B2C activities are furloughed.

The City of London is emblematic of the potential for outsourced GVA creation under WFH. Its skilled and highly paid staff are too valuable to employers to risk exposure to the virus. WFH, largely preserving GVA, will anchor the future of work.

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This report is free to access 

Lockdown 1.0 in March-April-May 2020 reduced mobility in London to 65% of its pre-pandemic baseline, swelling time spent at home. London’s mobility tracked a similar decline to Paris and New York City, all hugely reliant on public transport

Easing lockdowns and good weather slowly led to a mobility recovery through the summer and early autumn, but it sharply declined again after November’s Lockdown 2.0. The mobility decline was greatest in the City of London, which is more acutely affected by working from home

Each nation in the UK diverged slightly from September due to varying local policies adopted by England, Wales and Scotland to address their public health crises. Notably however, Lockdown 2.0 did not cause mobility to fall to the same degree as late March

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By integrating Amazon's content, Sky tightens up its ecosystem. We now estimate that no more than 5% of Sky users have subscriptions to services that are not carried by Sky Q, excluding Now TV

The agreement may be a first step in closer co-operation, but Sky will be cautious to value the benefits and costs. Amazon's width of business makes it different from others it has made deals with

Sky is on its way to transform the relationship it has with content suppliers from a relatively simple wholesale model to something it now calls aggregation: this appears intrinsically more complex

In the UK, carriage on Sky Q will give the new service the opportunity to prove its worth to viewers. Without integration with the UK's biggest pay-TV platform, growing scale is difficult for nascent DTC services.

Elsewhere in Europe, Discovery seeks to bundle too. Unlike the US, where the company has a single model—basic cable—in Europe it operates both free-to-air and pay channels, and it also owns Eurosport.

Ultimate success will come down to whether Discovery's "real life content" is essential and defensible. Generally there is little evidence of people taking services that are not broad, while the barriers to entry for competitors wishing to commission "real life content" are lower than other genres.

The US Department of Justice antitrust case against Google alleges an illegal monopoly in search and search advertising in their home and largest market.

The lawsuit targets Google's control of the Android mobile operating system and exclusive revenue share agreement with Apple, which the EU prohibited in 2018, a decision that Google has appealed.

Alongside antitrust enforcement, legislative initiatives in the EU and UK will create an ex ante antitrust framework for relations between “gatekeeper” platforms and their users and customers, which the US Congress has yet to emulate.

Sky appears to have weathered the COVID-19 crisis, revealing an encouraging turnaround in its Q3 operating results, with revenue growth flat overall as each stream saw significant improvement from Q2.

Rights costs from a condensed sporting schedule began to hit EBITDA, which remains guided to fall by 60% across H2, with most of the impact in Q4. This was anticipated long ago, and Sky’s ambition remains to double 2020’s EBITDA “over the next several years”.

Having disclosed contrasting performances between its markets, Sky now appears more clearly committed to replicating its UK success in both Italy and Germany, with tangible plans in place to streamline costs and rebalance content expenditure—namely by “resetting” its spend on sports rights.