Enders News

Marketing Week 16 April 2018

Matti Littunen was quoted in an article on the advertising industry, which has been shaken over the weekend by the shock exit of Sir Martin Sorrell from WPP. His departure puts into sharp relief the challenges facing the ad industry and the agency-holding model WPP led the way in building. WPP had its worst year since the ad recession of 2009 in 2017, with a performance Sorrell called “not pretty”. Matti said “Many are using WPP as an example of the challenges facing the agency holding group model, which we agree are existential, but thanks to its unique assets and best-in-class agencies, the group Sorrell built is actually relatively well placed for the future compared to its peers”.

Hollywood Reporter 16 April 2018

Claire Enders was quoted in an article on Netflix, and the challenge the streaming giant is experiencing, as it tries to grow internationally while staying above the local political fray. Netflix is under fire, around the world, not for its disruptive business model but for the political content of its programming. Claire said “This isn't just a free speech issue and isn't just about politics,” adds Claire. For Enders, who has been observing the European media industry for 4 decades as a U.S. ex-pat, the current debates around Netflix are really about regulation. As the company's international viewership grows, local politicians are beginning to pay attention. Claire said “By 2020, Netflix' audience in the U.K. will be larger than (national commercial network) Channel 4. Do you think they'll be able to avoid the same kind of regulation imposed on every broadcast and pay-TV network in this country? They won't”. Enders predicts the U.K. will lead a regulatory crack-down on the service within the next 2 years, with the main focus being child protection and the high level of violent and sexually explicit content on Netflix. She added “Since having programming with loads of sex and violence is one of Netflix' main selling points, that could have an impact on their popularity”.

The Telegraph 16 April 2018

Claire Enders was quoted in an article on the resignation of Sir Martin Sorrell as CEO of WPP. “Finding someone who is a charisma machine with chief executives in the same way Martin is will be tough,” Claire Enders, founder of Enders Analysis, said. “There is no other Sir Martin Sorrell in the world.”

Digiday 12 April 2018

Robert Jenkin was quoted in an article on Politico Europe’s paid subscriptions, which now account for half of its overall revenue, up from 30 percent in 2016, with the rest coming from advertising and events, according to the publisher. European businesses have been increasingly on alert about how political developments, particularly relating to the European Union, international trade, data regulations and Brexit, could affect them. That’s led to increased demand from businesses for premium, political news analysis, which Politico has managed to tap into successfully, according to Robert. He said “Having developed as a trusted, quality brand in the U.S., Politico was well-placed to take advantage of the increase in demand — particularly from businesses — for nonpartisan, objective political information in Europe. Their subscription revenue model seems well-suited for this business-to-business product”.

Mediatel 4 April 2018

Claire Enders was quoted in an article on young viewing habits. According to the BBC, 82 per cent of children go to Google-owned YouTube for their on-demand content, half to Netflix, with only 29 per cent choosing the BBC iPlayer. Five years ago 40 per cent of 12-15 year olds watched CBBC; now it is more like 25 per cent. In part the cause is obvious - an explosion of choice from four channels mainly aimed at children in 1998 to 35 channels today, most of them of North American origin. Yet just beneath the surface,  there lurks the issue of regulation, or more precisely lack of regulation, of what has been called the £10 billion a year onslaught from the US tech companies providing UK relevant content online, most of it designed for the 15 plus or 18 plus market. Claire said, "You have Netflix of which 80 per cent of the choices offered on the front pages are 15 plus rated, YouTube with infinite attractions to children and you have the same phenomenon with Amazon, and you don't have the parental controls that operate on those three major online platforms". She added that one way to look at the issue is that these companies "are carpetbaggers, they don't pay tax, they don't have a watershed, they don't operate under any advertising regulations, and they don't have editorial (such as news or difficult documentaries)".

Financial Times 4 April 2018

Claire Enders was quoted in an article on Walt Disney, who has waded into the years-long dispute over Rupert Murdoch’s influence in UK media by offering to buy Sky News, attempting to ease political and regulatory fears that Fox’s acquisition of the television outlet would deepen the media mogul’s dominance in Britain. Claire said that Fox has presented two very credible options to the CMA. But she added that the regulator or Matt Hancock, the culture secretary, could look to extract a “third option” from the company which would involve Disney also committing to a governance and independence model. She said “It may be that this is not enough and the secretary of state may want to get his pound of flesh as well”.

BBC News 3 April 2018

Chris Hayes was quoted in an article on Spotify, the music streaming firm, which will be publicly traded for the first time later on Tuesday when the firm debuts on the New York market. The flotation marks a turning point for the firm, that, after 12 years, has not yet made a profit. Spotify's listing, which could value it at $20bn (£14bn), is unconventional: it is not issuing any new shares. Instead, shares held by the firm's private investors will be made available. Chris said that while it may not be as a direct result of the share listing, he also expects Spotify to evolve. He added "I think over time they're going to have to diversify their offering”, helping to set them apart from a sea of rival streaming services.

QueryOk 23 March 2018

James Barford was quoted in an article on Vodafone, which agrees to buy Spain’s Ono for $10 billion. The deal is part of a broader trend of mergers and takeovers in Europe, where the mobile industry is split among some 150 major operators crisscrossing national lines — compared to just four in the United States. Grupo Corporativo Ono S.A. provides phone, mobile and television services to 1.9 million customers and has the largest "next-International Lead Generation network" in Spain, reaching 7.2 million homes, or 41 percent of the country. Vodafone says Ono has abundant spare capacity, giving it space to expand. James said the price was high and was sceptical that the focus on "quad play" — the industry term for bundling phone, broadband, mobile and TV services — will pay off. He added "It's a little bit the tail wagging the dog in terms of justifying such a high cost. There's an assumption that 'quad play' is essential, but there really isn't evidence that consumers have a strong desire to buy the fixed line and the mobile services together".

Marketing Week 23 March 2018

Matti Littunen was quoted in an article on Mozilla, which becomes the first brand to pull ads from Facebook following Cambridge Analytica scandal. The company behind the Firefox web browser says it will not return to advertising on Facebook until there are strong protections around user data. Matti said “There are PR benefits right now in announcing a boycott, but ultimately what will matter for most advertisers is return on media investment”. He added “We don’t expect any big effect until advertisers are able to see the consumer response: will users abandon Facebook in droves in the core markets? If so, then an advertiser exodus will follow”.

NBC News 16 March 2018

Julian Aquilina was quoted in an article on big tech companies who are progressing their way into the world of live sports. Facebook, Amazon and Google, better known for making social networks and search engines, have spent the past few years buying up the rights stream live sports events over the internet. Though most of these contracts have been small compared to the billion-dollar agreements paid out by broadcast networks, the steady drumbeat of deals by tech companies with plenty of cash to spend has put the media industry on notice. Julian said “I think Amazon and Facebook have shown their hands and bought sports rights in the past. They will continue to pick on the fringes. They haven’t secured a major sport with exclusive rights. When they do that, it will be the day that everyone takes a step back and says, ‘They’re really here”.

IBC365 14 March 2018

Claire Enders was quoted in an article on the UK’s leading commercial broadcasters, ITV, Channel 4 and Sky, who have joined forces to champion TV advertising in the face of online threat. They had come together to mark the fact that ITV, Sky and Channel 4 had united to hold the Big TV Festival to celebrate the virtues of television as a medium and introduce those virtues to young digital natives in the advertising and marketing industries. According to Claire, the new wave of competition has unleashed 10 billion dollars a year of UK relevant content into the market. She said “we have never seen such an onslaught before”.

the Guardian 14 March 2018

Douglas McCabe was quoted in an article on NME, who published its final print edition on 9th of March. As a paid-for title, NME had spent years battling declining sales, with ABC figures from the second half of 2014 showing an average weekly circulation of around 14,000. So in September 2015, publishing company Time Inc revamped NME as a free magazine, bringing circulation up to a reported 300,000 copies per week. However, the disappearance of NME speaks to the complexity of the free publishing model – trickier than just ripping off the price tag – and forging a new identity from a brand steeped in six decades of music history. Douglas agrees that free isn’t a means to an end, particularly when translating a niche product for the mass market. He said “In the end, its very soul seemed to have been lost somewhere. Think about how Stylist has become the kind of magazine that people take home. You flick through NME for 10 minutes on the tube, which isn’t a deep enough relationship to really work”.

BBC News 14 March 2018

Joseph Evans was quoted in an article on Apple who is buying Texture, the magazine app subscription service, for an undisclosed amount. Texture offers US-based users unlimited access to more than 200 titles for a monthly fee of $9.99 (£7.19). It is currently owned by Next Issue Media, which is backed by magazine publishers Conde Nast, Hearst, Meredith, News Corp, Rogers Communications, and Time Inc. Joseph said "A lot of this is talking the talk. If they really wanted to help journalists, they could give publishers a waiver on the 30% tax Apple takes from App Store revenue. That wouldn't cost Apple anything, and it would be a big help to publishers. But instead they do these user-facing things". He acknowledged, however, that Apple's involvement could boost interest in the eight-year-old service, which in turn would help publishers earn more money.

the Times 6 March 2018

Douglas McCabe was quoted in an article on Trinity Mirror, which plans to change its name to Reach after its acquisition of the Express and Star newspapers, also revealed that Simon Fox, its chief executive, received a 19 per cent increase in his total remuneration package last year to £893,000. This was despite a 19 per cent drop in the company’s share price in the past 12 months. Like many print media companies, Trinity Mirror is struggling to find a workable business model at a time when print circulation is declining and advertising revenues are gravitating online. However, Mr Fox said that the company had delivered structural cost savings of £20 million in the year, £5 million ahead of the initial £15 million target set for the year. For 2018, it has targeted a further £15 million. Douglas said that the company’s profits had been resilient. He said “Consolidation is the best game in town in these circumstances. With revenue going to Google and Facebook, the greater scale you can bring to the marketplace, the better”, adding that Mr Fox had “a great track of pushing savings through”.

Financial Times 5 March 2018

Claire Enders was quoted in an article on Sky, the group founded by Rupert Murdoch, that is now at the centre of a flurry of deals by companies trying to keep up with Netflix and Amazon. Sky has grown from a risky bet that nearly went bust in its first year of operation into a pan-European media powerhouse at the centre of a bidding war and of an industry facing an identity crisis. Claire said “Sky is an extraordinary success story”, pointing to its record of increasing revenue at 5 per cent a quarter. She added that the company has withstood competitors: the likes of ITV Digital, BT and, more recently, Netflix have all threatened to damage Sky, but have not yet dented its growth. She said “in the years since Netflix launched its streaming in 2012 Sky’s record in terms of revenue growth is unbroken”.

Digiday 2 March 2018

Douglas McCabe was quoted in an article on the New Statesman, which is putting up a metered paywall. Later this month, readers will be required to register with an email address after hitting a limit of three articles a week. After five articles a week, they’ll be asked to subscribe for an annual fee of £144. Douglas said that although this will be the first step of the New Statesman’s subscriptions journey, it’s worth noting larger titles like the Financial Times are continuously tinkering with how to convert audiences to subscribers, “the focus has to be on the relationship between the editorial strategy and the membership strategy” he said. “It’s not a single switch; it’s a funnel with many switches”. A metered model allows the publisher to have the reach to convert audiences without giving away too much of its content. Audiences can be fully immersed and build habits through free-trial models. Douglas said “with metered models, you’re building a perverse emotional, attitudinal relationship with a potential member where they might not read one article in case there’s something more interesting another day. It builds friction at the heart of the system”.

BBC News 1 March 2018

Tom Harrington was quoted in an article on Sky which will allow viewers to watch Netflix shows on its Sky Q platform, later this year, in an attempt to tackle the threat posed by the popular streaming service. Customers will pay for Netflix as part of their Sky bill, although prices have not yet been announced. Sky said the move would make the entertainment experience "easier and simpler" for customers. While pay-TV rival Virgin Media has offered Netflix to its customers for some time, Sky has regarded it as an "existential threat to its service", said Tom. He added "It has inconvenienced its subscribers, who are more likely to have Netflix than those without pay-TV, because it has believed that its content was strong and exclusive enough to justify operating a walled garden. It seems as if that confidence has subsided and bringing a competitor on board - one that could potentially satisfy Sky's subscribers for a much lower price - is a risky move that cannot now be backed away from, but at least is a sure source of shared revenues".

Bloomberg 1 March 2018

Claire Enders was quoted in an article on the bidding war for Sky. Comcast’s interest this week puts Sky at the center of a global race for scale among media giants, with Comcast and Disney CEOs both calling the pay-TV company a “jewel,” and sets up a potential bidding war. On Tuesday morning just before the daily flurry of U.K. stock-market statements, Martin Gilbert, the co-CEO of fund manager Standard Life Aberdeen Plc and a consummate dealmaker, finds himself in the unlikely situation of being the broker for Sky shareholders with two billionaire media families. Moreover, at Sky, a case has been steadily building for Gilbert and the other independent directors to push Fox for a better offer, even before Comcast got involved. Premier League soccer viewing has rebounded this season and Sky came out a big winner in the league’s auction earlier in February for three more years of broadcast rights, paying less per game. The auction result added 5 billion pounds to Sky’s valuation, according to an estimate from Claire.

The Drum 1 March 2018

Matti Littunen was quoted in an article on ad fraud, which according to the World Federation of Advertisers (WFA) forecasts ad fraud will cost brands more than $50bn by 2025, citing it as “second only to the drugs trade” as source of organised criminal income. Blockchain is geared towards recording every transaction along the supply chain, which could go some way in alleviating the some 70% of brands currently amending their media agency contracts to bring clarity to the buying process, particularly fee structures. Matti warns brands on how they approach it “Blockchain is a typical glitzy technology fix and it sounds like a silver bullet that’s going to solve these issues for the industry. However, they need to remember that even tech like blockchain calls for a trust between partners to set up, and strategic direction in terms of where the industry wants to go”. Marketers, he argues, should look to iron out the more fundamental issues in the industry that have to be solved before they look to deploy an entirely new technology.

Bloomberg 27 February 2018

Alice Enders was quoted in an article on Comcast which has jumped into the fray for Sky Plc, challenging Rupert Murdoch’s 21 Century Fox Inc. and Walt Disney Co. with a cash offer valuing the business at 22.1 billion pounds ($31 billion) and opening the possibility of a bidding contest for the U.K.’s biggest pay-TV company. Comcast sprung the offer on Sky Tuesday morning, its timing suggesting it sees an opening to win over U.K. officials and investors. Fox has been struggling to secure regulatory approval for its bid and some Sky holders have been agitating for a better offer after Disney’s $52.4 billion agreement in December to buy most of Fox’s film and TV assets, including its stake in Sky. Fox would hand full control of Sky to Disney if its takeover is successful. Alice said “It’s obviously a huge gauntlet that’s been laid down to the Murdochs in relation to their pre-existing offer. Sky’s success at the Premier League soccer rights auction this month made it more desirable”. She added “Sky is a very attractive business”.