The BSkyB change of strategy announced last August by James Murdoch has claimed its first victim according to this report: the company's own original target of 30% operating margin by FY 2006/07. That leaves the company with just two of its core targets: £400 ARPU and 8 million subscribers by the end of 2005. Meanwhile, the profit target has been replaced by the long-term growth target of 10 million Sky Digital subs by 2010, over 25% with Sky+ boxes and more than 30% with multiroom subs.

NTL’s successful reshaping of its balance sheet over the last two years since it emerged from Chapter 11 has meant that the company is now a reliable future generator of cash. Management disciplines have improved substantially. Unsurprisingly, the company would therefore also like to be considered as a growth stock.

Our annual assessment of the global recorded music market highlights the key drivers of the market's development – competition for the consumer wallet from mobile telephony, video games, DVD sales and live performances, as well as piracy.

This note updates on 3G in Japan [2004-24] after visits to NTT DoCoMo, KDDI and Vodafone Japan, and recent announcements in advance of Vodafone’s investor day next week. We conclude that the market's outlook remains poor and, in particular, Vodafone Japan will struggle.

The profitability of the UK 2G mobile networks depends on the continued avoidance of a price war. Are there any signs yet of retail price erosion? This report suggests that mobile prices have in fact risen in the last two years, despite the entry of ‘3’, the growth of Virgin Mobile and the regulatory pressure on termination charges.

MVNOs have attracted much attention recently. Virgin Mobile's IPO revealed attractive economics and discount MVNOs in certain smaller European markets have had success. This report considers the question of whether Virgin Mobile is a one-off or the start of a trend, and whether discount MVNOs can replicate their success in larger countries.

Local loop unbundling (LLU) is about to become a reality in the UK. This is the main conclusion of our quantitative assessment of the cost savings to be realised from unbundling local exchanges following price declines to connection and rental charges by BT in May 2004, as well as those recommended on 26th August 2004 by Ofcom.

This report examines pay-TV developments in Spain where Digital+, Sogecable's DTH pay-TV service, has just celebrated its first birthday (Sogecable [2003-23]). Sogecable financial targets for 2005 are within reach.

Weak Q2 commercial viewing figures fuelled stories that ITV1 NAR could be approximately £100 million lower in 2005 unless audience share rallied in H2 2004. This was due to the Contracts Rights Renewal (CRR) remedy, imposed by the Competition Commission as a condition for the merger of the Carlton and Granada sales houses to create ITV Sales, which now controls over 50% of television advertising sales.

Ofcom produced a tough and rigorous document on ITV licence fee renewals. Although the paper is dense and difficult to understand, we think it is bad news for ITV. The likely licence fee settlement is going to be higher than commentators might have expected six months ago. The prime reasons are Ofcom’s proposed move to assessing the ‘digital dividend’ on the basis of digital viewing, not households and, second, taxing the benefits of the lower costs of the merged ITV business. The first of these is the more important financially since only about 57% of ITV viewing in digital houses is of the digital ITV service.

We have long been sceptical of claims that music download stores like iTunes, combined with hardball legal tactics against pirates, would rapidly turn around the fortunes of the music industry. The wildly successful iPod has driven the growth of digital music downloads, and is expanding the population of music downloaders that pay for music - but not forced a change of heart by file sharers! Music download sales are expanding but not fast enough to balance the decline in physical formats. Globally, we project sales of music downloads of $3.5 billion by 2010, about 10% of the total music market.