Zoopla and The Digital Property Group, DMGT’s property portfolio which includes Findaproperty, Primelocation and Globrix, announced a merger on 14 October 2011. Under the terms of the proposed merger, DMGT would receive a 55% interest in the merged entity

A merged Zoopla and DPG will compete more effectively with market leader Rightmove, in a property market scaled down by one-third in terms of the number of transactions

We think the merger will give advertisers a better choice and constrain Rightmove’s pricing power, which has seen hefty fee increases on members, most recently in 2010, in 2011 and most recently again in November 2011

Spotify has just passed the 2 million subscriber mark in Europe and the US, and could reach 2.5 million by the end of 2011

Smartphone adoption and partnerships with MNOs and ISPs have proven a key driver of subscription in Europe for Spotify, which lacks a telecoms partner in the US. We think subscription is profitable

Spotify’s lower usage caps on the freemium tier will help compress total losses in 2011 in relation to the £25 million reported in 2010, despite the US launch

Content farms, which once threatened to undermine traditional publishers by flooding the internet with low value content, face significant challenges

Google’s changes to its search rankings in February 2011 reduced the prominence of content farms in favour of higher value content suppliers

In recent quarters, revenue growth at Demand Media’s content farm business has halted and revenues of About Group have declined

This presentation analyses the social games market in the UK. UK consumer spending on games software, like other recession-battered markets, has been flat for the last two years. At the same time, however, there has been rapid growth in PC-based social gaming, fuelled by the free to play nature of most games and viral marketing capabilities of social networks particularly Facebook. By 2015, we estimate that social gaming across PC, mobile and tablet devices could be worth up to £400 million, though much of this is likely to be driven by adding ‘social’ layers to existing games franchises.

Q3 results were contradictory, with accelerating demand for enhanced services and resilient revenue, but high churn and weak growth in fundamental cash flow

Cost increases struck us as justifiable in the longer term and were in some cases temporary. We share management’s confidence that there is better news to come, particularly at Virgin Media Business

Nonetheless, we remain of the view that future cash flow growth is likely to be significantly lower than that seen over the past two years, particularly given the deteriorating economic outlook

This report on UK consumer magazines charts the ongoing pressures on the sector: circulation of paid titles in H1 2011 of 445m copies was down 5% year-on-year, and down more than 20% in relation to the 562m copies sold in H1 2006. When the closure of Sky's titles is factored in, the year-on-year decline of both free and paid copies is 15%
A worrying decline in demand has taken place amongst the core magazine audience of women, whose frequency of purchase dropped in the recession and has not recovered with the squeeze on household budgets. Similarly, display advertising commitments to the magazine sector lost almost 25% of their value in the recession with no sign of subsequent recovery
Meanwhile, paid-for men’s magazines continue to crash, with free titles Shortlist and Sport adding further pressure on the paid weeklies and some monthlies. Amongst other genres, circulation of top tier ‘must have’ titles has been more resilient than second tier titles, and we suspect top tier titles are gaining disproportionate share of display advertising in the current difficult economic environment. Second tier titles are also likely to be the casualty of supermarket expansion via metro stores, which trim the magazines on offer to the top selling ones. Thus, while we consider the magazine format remains loved by readers, the pressure on publishers to downsize and consolidate portfolios will remain a feature of sector trends. Given the vast range of titles and publishers’ portfolios, we expect to see both winners and losers emerge. A second report, UK consumer magazines: the digital dimension [2011-099], focused on publishers' strategic and digital strategies, is forthcoming.

Sky’s Q1 2012 produced strong 16% year-on-year headline growth in adjusted operating profits, although weakening TV product net additions underlined the challenging economic conditions

Churn remains comparatively low in spite of the economic conditions, while Sky’s current round of major investment in entertainment content, now showing the first signs of bearing fruit, could prove vital to holding churn down and stimulating gross additions

Growth in home communications dropped back compared to the level seen the previous autumn, but was still well above that seen in 2009/10 thanks to strong growth in standalone sales

This second report on UK consumer magazines considers the strategic positioning of leading publishers in terms of their print portfolio and the digital opportunities. We believe further consolidation print assets is inevitable during the next few years. Additionally, publishers are launching fewer, or at least generally smaller products, and a widespread shift to a subscription model remains a distant prospect for most publishers. Digital products, on the web, mobile and tablets, offer new business models and new revenue opportunities, and some early tablet products in particular have delivered highly promising successes. However, they also require major structural changes and offer no guarantee of equivalent and equal revenue in the future.

Apple is now a $108bn company, with annual revenue up 66% from a year ago and 40% gross margins. September quarter iPhone sales dipped to 17m ahead of a new product launch, but Apple still sold 72m in the last 12m, compared to 40m in the 12m to September 2010

Apple has now sold 40m iPads for $20.3bn revenue, and 11m in the last quarter. All other competing devices have sold perhaps 4m. We expect Apple’s dominance to continue through 2012 and potentially beyond

Google’s Android sold even more smartphones than Apple, activating 150m in the last 12m and 55m in the September quarter. Yet in October Apple sold 4m of the new iPhone 4S in just three days, bringing in around $2.6bn: Google’s annual run-rate mobile revenue is now $2.5bn

National newspaper circulation continued its inexorable decline in September, with daily circulation down 7% year-on-year, although we estimate retail sales value decline was marginal

Sunday popular and mid-market newspaper circulation fell 4% month-on-month, as News of the World buyers continue to drop out of the market; we estimate around a third of ex-readers have not migrated to another title

Publishers are responding to circulation decline in a variety of ways, from churning out bulks to maintain scale, to increasing cover prices, axing international editions and developing their subscriber base