Revenues from traditional directory advertising products are continuing their rapid descent as social and mobile services become an increasingly popular tool in SME marketing activities as a supplement to online search

Hibu (formerly Yell) and other local media companies have responded to the shifting landscape by developing comprehensive marketing agency solutions for SMEs

In addition to these new service options, SME advertising spend will be effected by improving local service economies, rapid growth of mobile consumption and the continuing rise of e-commerce in the UK, while we believe that the decline of print has left a gap in local online display that is yet to be filled

The Court of Appeal held full day hearings on 5 and 6 December 2013 in response to the appeal by BT against the earlier verdict of the Competition Appeal Tribunal (CAT) published on 12 August 2012 that the core competition concerns that led to Ofcom’s Wholesale Must Offer (WMO) remedy were not justified by the evidence

Although it may take some weeks or months before the verdict is published, the hearing appeared to run in BT’s favour (contrary to what we had anticipated), as the judges seemed convinced that the CAT had made an important mistake in not assessing whether Ofcom’s price proposals were a reasonable response to Sky’s dominance in retailing premium pay-TV sports

It looks as though the Court of Appeal will send the case back, saying that the CAT must now properly examine whether Ofcom’s WMO price levels were set carefully and appropriately. The CAT will not redo Ofcom’s work but rather it will check that its methods were reasonable and well thought through

BT’s case that the Competition Appeal Tribunal failed to address the reasons why the premium sports market works badly will finally arrive at the Court of Appeal tomorrow. We think BT’s chances of success are low, though a win would substantially enhance its competitive position in its battle against Sky BT’s complaint is that it has always wanted to retail Sky Sports channels, however Sky has always been unwilling to wholesale them, thereby resulting in no prospect of effective competition in the provision of premium sports on TV Ofcom implicitly endorsed BT’s position when it introduced the Wholesale Must Offer remedy. However, Sky took its case to the Competition Appeal Tribunal, which overturned Ofcom’s WMO remedy on the grounds of misinterpreting the evidence, only for BT to retort by taking its case to the Court of Appeal, which is to deliver a final verdict on whether BT is disadvantaged by Sky’s alleged anti-competitive behaviour

Scotland’s SNP-led Government has published its White Paper setting out its assumptions for independence, including on broadcasting and telecommunications, where spectrum management will be assumed by the new Government, implying a discontinuity in existing UK-wide 3G and 4G licenses attributed by Ofcom.

The SNP promises no change in the broadcasting environment except for the creation of a Scottish Broadcasting Service (SBS), which would occupy the BBC’s position today. Channel 3, 4 and 5 licensees will be able to continue to broadcast without discontinuity, although free access to spectrum was not promised, which BSkyB of course doesn’t require.

The big ask is BBC One and BBC Two on free-to-air terms, implying a subsidy of £270 million to Scotland. This seems very unlikely to be agreed by the rest of the UK (rUK), since BBC Worldwide offers only commercial terms to other countries. However, the BBC will not comment on this assumption, so the Scots will only learn of the facts after the referendum.

After several years of preparation Sky’s AdSmart launched in August and is on schedule to be offered to all advertisers in January/February 2014 after beta trials involving some 50 advertisers in the second half of 2013 AdSmart is all about addressable and low waste targeted segmentation on the Sky pay-TV satellite platform, which for the first time in UK TV history allows national channels to offer highly localised, targeted advertising AdSmart promises to grow significantly the TV advertising ecosystem, though success in realising the full revenue potential of AdSmart, possibly in the order of several hundred million pounds per annum, will depend on Sky’s ability to handle various challenges on the way, with regional press and direct mail most at risk

France’s Canal+ faces an increasingly challenging domestic market, due to IPTV expansion, competition from Al-Jazeera’s beIN Sport and the threat of a Netflix launch – on top of sluggish consumer demand in a dull economy

Inflated promotional activity has brought rising churn and failed to stop subscriber base erosion, while denting profitability. Headline revenue growth comes from international channels, film production and FTA TV

Anxious to avoid interference from its owner Vivendi, Canal+ has followed a conservative investment policy that may have undermined growth. The spin-off of SFR and possible dissolution of the conglomerate would leave Canal+ free to contemplate more aggressive moves, in IPTV, set-top boxes and possibly through acquisitions

TalkTalk maintained recent momentum despite increased competition in the quarter, delivering 5k broadband net adds and 167k pay TV net adds, although increased churn required higher marketing spend to achieve this

TalkTalk restructured its pricing towards the end of the quarter, increasing certain prices, introducing a lower cost broadband option and bringing pay TV to its (now) mid-tier plan; the net impact appears as if it will be positive

TalkTalk is fairly well insulated from the ongoing BT/Sky battle, with little enthusiasm for sports content within its base, and pricing that is already very competitive, but extra marketing costs may still weigh going forward

The Vivendi empire is shrinking in revenues, cash flow and also in debt: Activision Blizzard and Maroc Télécom were sold in 2013, SFR will be spun off

We expect SFR’s topline revenue decline to halt in H1 2014, ending the pain from the disruptive launch of Free Mobile in 2012. With SFR and Bouygues Telecom intending to conclude a network-sharing agreement outside urban areas by the end of 2013, SFR should have a more positive story to tell investors when it comes to the Paris stock market in late 2014

With SFR spun off, Vivendi 3.0 will own just Canal+, Universal Music Group (UMG) and GVT (telecoms operator in Brazil), three companies without visible synergies. The end point appears to be the full dissolution of the Vivendi conglomerate

BT has doubled the price of the live ECL/EEL rights to £900m in order to outbid Sky and ITV and become the sole owner from 2015/16 to 2017/18 BT can easily absorb these extra costs through cost savings in other parts of its business, but the direct revenue returns through subscription charges and advertising on BT Sport are expected to fall far below the annual rights payments of £300m BT’s Euro victory is not a game changer in itself, but eyes are now firmly fixed on the next auction in about 18 months time of live PL rights, which could prove to be an inflationary bloodbath for all market participants

Virgin Media had a very solid quarter, with cable households returning to growth, cable revenue up 4%, underlying group revenue up 2%, and underlying OCF up 3% despite extra content costs weighing

Subscriber net adds were not as strong as last year, when DSL competitors were weakened by supply constraints, but there is little sign of a substantial impact from BT Sport or TalkTalk and BT’s YouView-based TV offerings

BT’s foray into sport has however had an effect on profitability, as it has with BT itself and Sky, with Virgin Media’s premium content costs rising from both BT and Sky