US recorded music retail sales fell 5% in 2013 to $5.5 billion on a bruising 17% decline in physical sales and a sharp slow-down in digital growth

DTO retail sales slipped for the first time in 2013, a trend that continued in Q1 2014. On a brighter note, the leap from 3.4 to 6.1 million subscribers makes the US the top market for the format

At the wholesale level, the fall in revenues from B2C sales was entirely offset by the rise in B2B revenues from ad-supported music where usage is booming – in 2013, B2B contributed 16% of wholesale revenues of $4.5 billion

Sky and TalkTalk are rolling out fibre in a small part of York, using a model that they could potentially extend to cover 10-15% of UK households

The economics of greenfield fibre build are still terrible in general, with even building in cherry-picked areas very hard to justify under current conditions, although the economics will improve over time as demand for speed increases

Moreover, once it is built it is built, and BT loses the wholesale revenue forever. Taking the hint and offering more reasonable wholesale fibre pricing may not be a bad option if Sky and TalkTalk persist

Newspaper apps have very quickly become a critical means for publishers to optimise consumer dwell time in digital, and cement an integrated digital subscription service

In common with apps in other markets, they are evolving, with new business models and usability solutions emerging relentlessly, while challenges including mobile advertising and the integration of video with text-based content are far from resolved

Unsettled consumer discovery and interaction, and continued innovation by platforms and services on top, provides a mercurial environment for publishers, bringing opportunities for specialist and leading services that develop agile iterations, and increasing the existential threat for many others

Japan’s RIAJ reported a 15% decline in trade revenues in 2013 on the 13% decline in CD and music video sales, still representing 87% of trade revenues

Digital trade revenues fell 23% on collapsing mobile sales; internet DTO revenues were up 24% and subscription revenues trebled to $31 million

UMG, WMG and even Sony each have limited exposure to Japan, where domestic labels dominate. Avex and other publishers exploit J-pop through 360 degree contracts with acts and enjoy robust concert and merchandising revenues

European mobile service revenue growth again disappointed in Q4, dropping slightly from -8.9% to -9.1%, with underlying revenue growth dropping a little further from -6.0% to -6.3%, again reaching a record low

There had been hopes that improved GDP growth would drive a volume rebound, that price declines would start to annualise out, and that declining out-of-bundle usage would wane in its impact as this usage declined. In the event, ongoing price competition from smaller operators, MVNOs and quad play offerings, combined with surging use of OTT communications platforms, have dominated trends

In the medium term, the development of 4G and Vodafone’s Project Spring may bring some much needed network differentiation back to the market, allowing pricing power to return to the larger operators. However, it will be 2015-2016 before these factors come into play: in the short term, the main source of optimism is consolidation

This report on the digital transformation of the creative industries in the UK was produced by Enders Analysis and research partner Bain & Company, to support the Creative UK event organised by Enders Analysis and held at the BT Centre on 18 March 2104. The event is sponsored by BT, Enders Analysis, Bain & Company, Powerscourt and Shine Group. 

 The UK’s rate of business creation since 2010 has been especially strong relative to other major economies, backed by a solid trend to self-employment. Business creation in the creative industries  – music, film, television, advertising, the arts, book and newspaper publishing - has been a major contributor, up 17% since 2010.  

Underpinned by a generation of investment in broadband, digital technology is changing how many creative-sector companies produce and distribute products. But experiences vary widely:  

• For advertising and marketing companies, the transition has had a benign impact on revenue; online’s share of total advertising was at 36% in 2012, placing the UK in the vanguard of digital advertising
• Television has remained relatively resilient to disintermediation by the internet and TV remains the single biggest advertising medium
• Consumer-facing newspapers have undergone a painful transition as pennies from digital replace pounds from print and ad sales
• Recorded music sales halved in the decade to 2013, but digital accounted for 50% of revenues in 2013, and the corner has been turned; artist management is being transformed by the use of online media
• New online pure play businesses have sprung up, like Rightmove and Zoopla Property Group, AutoTrader, LoveFilm and Spotify
• The crafts industries have been transformed by online marketplaces like Etsy, which allow them to serve their customers wherever they may be
• YouTube is emerging as an important outlet for UK creative talents 

Strong growth in UK sales of mobile devices in 2013, with tablet shipments overtaking declining PC sales, pushed smartphone and tablet penetration up to about 63% and 35% respectively, in line with our forecasts.

We estimate that mobile devices now account for 50% of time spent online in the UK, the lion’s share via apps, reaching this milestone sooner than expected. Mobile internet usage looks set for further growth in 2014 and beyond, with PC-based consumption flattening.

After a slow start mobile monetisation is also rising fast, with UK advertising and e-commerce to mobile devices accelerating and closing the gap with that on the PC. We expect much, if not all, future growth in commercial internet revenues to be driven by mobile devices.

UK mobile market service revenue growth improved on both a reported and underlying basis by 1.2ppts in Q4, a very welcome result after six consecutive quarters of declining underlying growth. Reported revenue is still in decline, at -1.6%, but it is the most modest decline among larger European countries, and compares to -5.0% in early 2013 EE is still leading in 4G coverage and performance, with around twice the coverage of its nearest rivals of basic 4G, double speed 4G now covering around 30% of the population, and plans for quadruple speed 4G to launch in 2014. Vodafone may prove the biggest network challenger going forward, with plans to increase capex as part of its Project Spring initiative Maintaining (or increasing) the current level of pricing is key to the industry returning to revenue growth in 2014. We would note that the smallest operator, H3G, is fairly unlikely to return to being a price discounter and put pressure on market prices, leaving the onus on the ‘big 3’ to stay disciplined, with a small but significant risk from SIM-only MVNO offers gaining more traction

Slides from the presentations by the following speakers at the Media & Telecoms: 2014 and Beyond conference on 4 February 2014: James Purnell, BBC; Dido Harding, TalkTalk; NIcola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette.

This report provides edited transcripts of the talks given by seven of those speakers: James Purnell, BBC; Dido Harding, TalkTalk; Nicola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco