Explosive growth in take-up of smartphones and tablets means that the effective size of the internet will increase by several multiples within the next few years. This transformation in scale comes with a major change in character and operating dynamics, creating new opportunities and revenue streams.

Twitter is unique amongst social apps: it gives new users a blank canvas in which they can (and must) create their own social network reflecting their own interests, hence building an ‘Interest Graph’, but onboarding new users remains a challenge.

Revenue at Twitter is now on a $600 million annual run-rate, scaling rapidly since the introduction of ‘native ads’, and seems set for further growth: the key question is whether it can achieve breakout user growth and mass market scale.

Non-subscribers can download this report in full - alongside all our other coverage of the BBC during the Charter Review process - from the 'BBC Charter Review' page of our site.

The Charter Review of the BBC officially opened with the Culture, Media and Sport Committee’s inquiry into the Future of the BBC asking the question “What should the BBC be for and what should be the purpose of public service broadcasting?” The only obvious answer is that the BBC and public service broadcasting should be for the people of Britain, and the BBC rates highly on different measures of public and audience engagement. The BBC plays an irreplaceable role in the supply of PSB programming that UK audiences appreciate, most importantly news, where the BBC accounts for 70% of TV news time and for 22% of online news time in 2013.

The stress on 21st Century Fox’s Italian pay-TV platform is easing as the worst recession of any G8 country is expected to end in 2014, and competitive pressure from Mediaset is weakening

Sky is sticking to a long term strategy, investing in the (unrivalled) quality of its offering and sustaining high recruitment costs. The subscriber base seems to have levelled off, revenues are stable, but profits have collapsed. Management plans cost cuts to raise profitability by 2016

The upcoming auction for the 2015-18 football rights could see Sky gaining more exclusivity at a higher cost, which it would have to recoup mostly by rising prices. The key potential upside resides in an Italian economic upturn – which is only conceivable in a few years

Richard Desmond’s appointment of Barclays to explore the sale of the Channel 5 Group in 2013 has fuelled speculation over prospective purchasers should Northern & Shell be intent on selling this asset

The reported target of at least £700 million, seven times the £103.5 million paid by Northern & Shell to RTL three years ago, reflects a strong performance in 2013, but needs to be against several distinctive factors, including Channel 5’s near total reliance on advertising and the cross-promotional benefits it gains from the Northern & Shell print publications

Regulatory and strategic considerations suggest that neither ITV nor the pay-TV platform operators, Sky and BT, are likely to emerge as serious bidders and that an overseas group from the US is the most likely outcome if a sale is to take place

The UK national press remains a ‘big beast’ in UK media, selling 7.2 million copies every day, supplemented by 1.6 million free newspapers; however, the decades long decline in print circulation and advertising has accelerated once again with the take off of smartphones and tablets.

Print still accounts for the vast majority of the nationals’ income, though revenue continues to fall due to declining copy sales and the structural shift of classified ads to the internet; there is also growing evidence that display advertising is declining by more than volume losses in some categories.

Digital is gathering momentum due to acceleration in digital advertising and a shift to pay models. In the UK, where print subscription levels are low, and home delivery lower still, publishers face the obvious challenges of digital transition and migration from a newsstand economy to a consumer relationship mindset.

2013 has seen yet another year of strong growth in consumer adoption of mobile devices and screens adding to the challenges facing traditional media. Press and radio have long been affected, but television is now starting to feel the heat

BT and Sky’s contest for premium pay-TV sports rights has intensified. August saw the launch of BT Sport, while BT’s acquisition of the European football rights in November was a clear statement of intent, spending half of Channel 4’s total programming budget on approx. 200 hours of content

The UK has seen buoyant advertising growth of around 4% in 2013, with similar growth expected in 2014, in the context of the strongest economic recovery in Europe

YouTube (YT) held its first Brandcast in the UK in October, as well as in France and Germany, after staging similar events in the US. Google’s ambition is to compete more directly for brand and TV advertising in these core markets

At this year’s Brandcasts, YT highlighted its position as a complement to TV content and advertising, emphasising unique advertising opportunities for brands to engage with viewers through sponsored YT native and dedicated brand channels, in line with its new ‘brand partner programme’

In direct comparison to TV, online video advertising and viewing remains small. We project UK online video advertising to reach £305 million for FY2013f, representing 8% of TV ad revenue. As the dominant players, Google/YT are well positioned to grow display revenue by securing a large share of brand advertising moving online

The launch of BT Sport and the acquisition of European Champions League and Europa League rights have set the scene for the fiercest of conflicts when the domestic live Premier League rights fall due for renewal by auction in 2015

The scale of BT’s ambitions when translated into spend per percentage share of total viewing across the year are staggering for a national TV industry generating circa £12 billion a year on programming spend of less than £6 billion. The current level of rights payments by BT imply a grand annual total of £100+ billion, if all other parties paid the same rate

So far, BT Sport has performed similarly to Setanta and ESPN in terms of audience share, and with little visible gains since launch in the total estimated base of about 3.5 million households taking BT Sport. However, BT has a long-term vision and 2015 promises to be a crunch year

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