Enders News

the Guardian 22 November 2017

Tom Harrington was quoted in an article on Amazon's $1bn bet on Lord of the Rings, which shows the scale of its TV ambition. However, Amazon must navigate its losses against a backdrop of below-par performance at its streaming business, where there have been too many multimillion-dollar failures. Consequently, Jeff Bezos, the company’s founder, announced a deal to make Lord of the Rings into a TV series. The mooted $1bn (£755m) cost – $250m for the rights, $750m to film six series, making it the most expensive TV show ever – illustrates the scale of Amazon’s ambition and Bezos’s growing frustration with the TV business. Tom said “buying Lord of The Rings is completely against their previous strategy. They are trying to buy their way out of their difficulties”.

Reuters 20 November 2017

Francois Godard was quoted in an article on Altice’s shares, which have fallen 12 percent on Friday. On Monday, Patrick Drahi, Altice’s founder, said that Altice would shift away from acquisitions towards debt reduction and customer satisfaction, but concerns that Altice may need to raise cash hit its shares. Francois said that while Altice’s update might reassure bondholders in the short-term, in the longer run the company still needed to improve its underlying performance in France. He added “bondholders will be more comfortable once they see that the French operational performance is getting better”.

Financial Times 20 November 2017

Francois Godard was quoted in an article on Altice’s shares, which have almost halved in the past few weeks after poor third-quarter results were compounded by worries over its high levels of debt. In 2014, Altice acquired SFR, which still accounts for almost half of its revenues. This deal making has left Altice saddled with about €51bn of debt, much larger than the company’s €15bn market capitalisation and more than five times its earnings before interest, taxes, amortisation and depreciation. Investors want to see that Altice can manage the businesses that it has expensively assembled — particularly in France, its largest market. Francois said “besides sustaining network deployments, to turn around SFR, Altice needs to abandon short-term fixes, invest in its workforce and customer service and differentiate through valuable innovation — in other words the opposite of the model followed so far”.

OpenDemocracy 17 November 2017

Alice Enders was quoted in an article on the Sky/Fox bid. This week, the CMA has published a transcript of its first “expert round table” on the bid: that on media plurality (another on broadcasting standards will follow shortly). The review by the Competition and Markets Authority (the UK’s senior competition regulator) is what is known as stage 2 of the inquiry into this proposed merger, triggered by Karen Bradley, in September, after several months of scrutiny by the media regulator, Ofcom, whose inquiry was requested by Bradley, using her powers under the 2002 Act – media plurality being the only part of competition oversight of UK transactions of this size not reserved for the EU authorities. During the first expert round table Stewart Purvis, offered his own “theory of Murdoch”: the establishment of a right-of-centre broadsheet newspaper, alongside a raucous popular tabloid and an opinionated news channel – a pattern he identified in the US and in Australia, and now potentially in the UK. Alice gently deflated this conceit, pointing out that Sky in the UK is a family-friendly platform business, very different from Fox News in the US, which is primarily dependent on advertising revenue.

Wired 15 November 2017

Joseph Evans was quoted in an article on Uber, who had seemingly struck a deal with an investment group led in part by Japan's SoftBank. The deal, which would have seen SoftBank take a stake in Uber, seemed all-but-confirmed. Joseph said that this initial failure to secure investment is troubling for the company. He added “Uber being unable to lock down some of the easiest money in the world right now is a very worrying sign.”

TVBEurope 14 November 2017

Tom Harrington was quoted in an article on the Amazon/Lord of the Rings deal. Tom told TVBEurope Amazon's reported $250 million deal to secure the rights to JRR Tolkien's Lord of the Rings will not be the last time a streaming service will win out over traditional TV. He said "the traditional broadcasters are already worried in terms of these large super-premium productions because they can’t afford them on their own. They have to go into co-productions which inevitably which they wouldn’t have done previously. Tom added “it’s somewhat difficult for them in terms of major super-premium scripted dramas like this because most broadcasters have to provide 24 hours of entertainment across a different number of channels whereas streaming services can concentrate their not inconsiderable spend on particular projects. At the moment it does tend to be these big one-offs but it is going to become more and more difficult for traditional broadcasters to win those auction-type arrangements for major productions". According to Tom, the deal is a major win for Amazon. "In terms of video, Amazon has had a bad few months and they need a win. Amazon has been worried that they haven’t had a hit in the way Netflix has with Stranger Things. So they’ve gone back to the easiest way of acquiring a hit, which is acquiring IP which has shown to be very successful in the past. A lot of people were in the market for this so Amazon has gone above and beyond to ensure they’ve got what they think will be a guaranteed winner."

The Times 13 November 2017

Enders Analysis was quoted in an article on the expensive competition for entertainment content. In the past 12 months, Netflix has spent $8.5 billion on programming for its subscription video-on-demand service. With consumers increasingly watching movies and television via on-demand streaming, the Netflix subscription model is gaining on traditional models of advertising-funded viewing. As a result, Netflix and other streaming services have proved themselves nimbler and more willing to take risks than Hollywood studios. They also have several advantages over traditional television incumbents, not least the fact that in the UK they are not bound by regulations such as the 9pm watershed (only a quarter of Netflix’s original content would be allowed before the UK watershed). They also have such deep pockets that the team at Enders Analysis believes it is doubtful whether in a decade’s time Britain’s public service broadcasters will still be able to compete.

CNC News 10 November 2017

Chris Hayes was quoted in an article on royalties from thousands of song classics tucked away tax-free. Musical memories are offshore for the same reason as other assets — tax advantages. Skipping taxes helps increase earnings from intellectual property — patents, copyrights, trademarks and trade secrets — as well as other holdings. Music publishing rights have retained value despite turmoil in the music industry that has eroded the worth of related rights, creating steep declines in royalties for sales of digital music or albums. If the owner plays it right, music catalogues can be real money-makers, and the steady income that can be drawn from a music catalogue is a lure for institutional investors. Chris said "there is a burgeoning market for music catalogues among institutional investors who are looking for fairly reliable revenues in the future"

the Guardian 10 November 2017

Alice Enders was quoted in an article on Rupert Murdoch’s relationship with his younger son James, which is being called into question in the aftermath of the revelation that his company 21st Century Fox was considering selling its film studio and stake in Sky to rival Disney. It also raises the prospect that Rupert has become disillusioned with James’s strategy at Fox and the Sky deal. Alice said that if the Sky deal collapsed, in the face of a lengthy regulatory process and political opposition, then it would be seen as a failure for James. She added “we think that a lot of things could be on the table if the deal does not go through. If it doesn’t go through it would compromise the position and the strategy James has taken, it would be a failure.”

Twipe 9 November 2017

Douglas McCabe was quoted in an article on how The Guardian plans to reach one million paying members. The perennial question of how to fund quality journalism has seen a few new answers in recent memory, with membership programs as one potentially successful solution. The Guardian hopes to tap into this, with their membership plan as a core component of their goal to more than double revenue generated from readers to £68 million. Douglas said “at some level consumers are increasingly aware of the value of quality news provision by trusted brands due to an acceleration in the momentum of national and international political and economic developments. Greater uncertainty has pushed people to engage and commit”.

The Times 8 November 2017

Claire Enders was quoted in an article on the change of viewing habits, as the increasing appeal of programmes available from streaming services is shaking up the world of television. For decades, the bosses at Hollywood studio giants, including Disney, had controlled the biggest stars and had signed the fattest pay cheques in the global entertainment business. Suddenly, it was upstarts such as Netflix and Amazon that seemed to be in charge, hiring the best talent, drawing hundreds of millions of subscribers to their booming internet streaming services and making the industry dance to their tune. With consumers increasingly choosing to watch movies and television shows via on-demand streaming, often on smartphone or tablet, traditional models of advertising-funded viewing are being hit hard, forcing the industry to come up with new strategies to compete. Claire believes that Netflix is trying to cut out the studios and that this is forcing many to consider defensive mergers and acquisitions. Everybody, she said, “is thinking about how to circle the wagons”.

The Drum 8 November 2017

Douglas McCabe was quoted in an article on how Jeff Bezos built a tech business within the Washington Post. Over the past four years the Post has become both a technology business and a journalism institution, a mix it believes is essential to succeed in media in the future. Douglas believes Bezos has done a good job of evading the potential downsides of a tech entrepreneur buying an impartial news organisation. He said “the downsides could have included: interference; technology innovation at the expense of investment in journalism; an Amazon strategy shoehorned into the publishing business; too much distance, that is, money without intelligence. None of these outcomes have emerged because Bezos has evidently not interfered with the Post’s content at all. He has applied a strategic framework and some tactical elements to generate a means of investing more in journalism in the short and medium term”.

Financial Times 8 November 2017

Claire Enders was quoted in an article on the prospect of Mr Murdoch and his sons to sale 21st Century Fox prime film and television assets to Walt Disney. Claire said “you will not find the Murdochs selling a damn thing unless they are forced to — or humiliated politically. They’ve never been sellers and don’t need the money”. She added that James Murdoch was particularly personally invested in acquiring Sky, saying “he has spent 10 years trying to buy it. [James] has always been a one-track guy”. Six years ago, the family’s reputation took a knock from the phone-hacking scandal, which led to Rupert Murdoch apologising to MPs and the eventual withdrawal of its first Sky bid. Claire said “there are huge reputational advantages to James and the Murdochs of this [latest] deal clearing”.

TVBEurope 7 November 2017

Alice Enders was quoted in an article on Walt Disney’s exploratory talks with 21st Century Fox to buy the bulk of Fox’s entertainment assets. Alice told TVBEurope she is sceptic about the deal as the Murdoch family has always been "buyers not sellers". The younger sons are still in their 40s, they’re very active in the assets that they have, they see entertainment and media as being their forte as opposed to newspapers which is their father’s passion. So from a human element, you have to say why would the Murdoch brothers want to sell to anybody, not just Disney?". She added "I think the existence of talks masks a much broader set of options that are being considered for eventually a collaboration or maybe a sale, although we see Disney as not really needing to buy Sky or 21st Century Fox. Disney occupies a very unique space in the studio market, and the heart of what it’s doing is selling entertainment and products to children. It’s not absolutely clear what it would be seeking to get out of a hook-up with 21st Century Fox as a studio". However, Alice said the distribution side of Fox's business could be what's attracting Disney. "Of course 21st Century Fox owns 39 per cent of Sky today and presumably in the future will own 100 per cent of Sky potentially. Obviously Sky is the most interesting pay-TV operator in Europe for a US studio. So Disney probably doesn’t need studio assets but it might enjoy having a footprint outside the US in the distribution area".

The Hollywood Reporter 7 November 2017

Alice Enders was quoted in an article on Walt Disney talks about buying assets from 21st Century Fox, including much of its international business. The news not only drew attention in Hollywood and on Wall Street, but also in London, where industry watchers immediately wondered what the news means for European pay TV giant Sky. After all, Fox owns a 39 percent stake in Sky and last December offered to take full control of it in a $15 billion deal, which U.K. regulators are still reviewing. Consequently, what does all the news mean for the regulatory review in Britain of Fox's bid for all of Sky and Fox's commitment to the deal? Alice said "I doubt very much this would interfere with the [U.K. regulatory review] process, which after all concludes in early March 2018. It has been rumoured that this would lead to 21st Century Fox withdrawing from the Sky deal, but I doubt that very much. Relatively, 100 percent of Sky is worth much more than 39 percent".

BBC 3 November 2017

Alice Enders was quoted in an article on Anna Wintour, Vogue's editor-in-chief, which according to Forbes Magazine is the most powerful woman in the media and entertainment. But why is Dame Anna top of the tree? Alice has a theory, she said "it's pretty simple why Anna Wintour is number one - Facebook's Sheryl Sandberg and Google's Susan Wojcicki are not included in that list. By media, they mean the printed press and performing arts. They (Forbes) have studiously segmented out the advertising genius of Facebook and Google, despite these two companies being advertising behemoths today". Despite that, Wintour has still squeezed out other big names including Bonnie Hammer (number two), the chair of media company NBCUniversal. Alice explains "Anna Wintour is the most influential woman in the printed press simply because Vogue magazine is the pinnacle of taste-making and women's fashion. She incarnates the transatlantic bonds of commercial fashion endeavour today, spanning the continent where fashion was born to the dynamic innovation of the British and American fashion houses".

The Bookseller 31 October 2017

Douglas McCabe was quoted in an article on the prospective sale of Waterstones. Analysts have said that new ownership of Waterstones “makes sense”, following reports that its Russian owner, Alexander Mamut, has appointed banker N M Rothschild to contact potential buyers for the chain. But the development has sparked anxiety in the wider trade, with concerns over any uncertainty affecting the crucial retailer. Douglas said that Waterstones’ reported £40m profits would "give the owner some leverage and reinforces why the timing of new financing could be attractive". He added that if Waterstones increases its profits in its next results, the "responsible thing" to do would be "to re-engineer its financing on a more stable footing”. Douglas elaborated “there are a range of possible outcomes - same owner, same owner and other owners, other owners - but essentially with any outcome the company should be looking for more flexibility to invest in the company, greater security for the long term."

the Guardian 30 October 2017

Tom Harrington was quoted in an article on the Great British Bake Off, which reaches the biggest young audience for TV series this year. Bake Off’s move from the BBC to Channel 4 was controversial and the latest series has also attracted criticism because one of the contestants. But the latest viewing figures suggest Channel 4’s decision to spend £75m on showing the programme for the next three years has paid off. These figures make Bake Off the biggest Channel 4 series since Big Fat Gypsy Weddings in 2011 and also the biggest series for 16 to 34-year-olds on any channel this year. Tom said “it has been a great success, outdoing most expectations both critically and in terms of viewership with the final likely to be the most watched show on the channel in the past 15 years. That’s pretty impressive when you take general viewership decline into account. It’s quite rare for a programme to move channels when at its peak. Big Brother was in decline when it moved to Channel 5, but even there it provides great value for that channel, along with Neighbours, which had experienced great popularity on the BBC”. He added “of course it is difficult to track those titles that move to the SVODs [subscription video on demand, such as Netflix], such as Black Mirror, Ripper Street or The Grand Tour, as viewing information is not released, but it would be fair to say that viewing on those platforms is still very small when compared with linear television [such as BBC and Channel 4]”.

BBC 26 October 2017

Tom Harrington was quoted in an article on Apple who has hired Jay Hunt, former controller of BBC One and chief creative officer of Channel 4, to join its video team. Ms Hunt was responsible for TV shows including Sherlock and Luther at the BBC before helping Channel 4 sign up the Great British Bake Off. Her title at Apple will be creative director, Europe, worldwide video. Tom said "it seems like Apple is going for a worldwide push already, even though it hasn't yet made much headway in the US. Jay Hunt is exceptional in the commissioning space. She's exceptional at finding programmes that fit the outlet she's working at. He added “she could have worked anywhere she wanted".

Press Gazzette 25 October 2017

Douglas McCabe was quoted in an article on the presentation he held at the Press Gazette’s Digital Journalism Summit. Douglas highlighted that small and medium size businesses are now spending more with Facebook than they are with local newspapers. He said that this switch had happened in the space of just a few years, overturning a business model which has sustained journalism for centuries. He also noted that the rate of decline in newspaper circulations is accelerating because of the rise of smartphones. He said “Smartphones interrupted the news bundle much more than the desktop experience. Adding that “older demographics and demographics more likely to read popular newspapers are adopting smartphones. As a result the decline in print is accelerating”. He said that whereas the average length of time spent with a newspaper is 36 minutes per day, only the BBC website achieves more than an hour per month with its readers. He estimated that Facebook now delivers two thirds of the traffic to some news websites and said that Google and Facebook now account for a majority of the traffic to most news websites.