Enders News

Wired 16 July 2018

Matti Littunen was quoted in Wired regarding Amazon's biggest annual sales event, Prime Day, which starts on July 16 at 12:00 BST. What was designed to drum up business during the summer lull and steal some of the thunder from Black Friday – “mission accomplished,” says Matti Littunen from Enders Analysis. It’s been ‘anniversaried’ ever since, quickly becoming the e-shopping giant’s largest annual trading event, easily surpassing Black Friday and the pre-Christmas Cyber Monday.

The Daily Mail 11 July 2018

Douglas McCabe was quoted in an article on Martin Sorrel’s procurement of Mediamonks. The deal has taken place despite warnings from Sorrel’s former employer WPP, that it breaches confidentially agreements and disentitles him to £20 million in share awards. Douglas noted that Sorrell will be 'very happy with this acquisition and there will likely be a lot of annoyed people at WPP.'

iNews 6 July 2018

Julian Aquilina was quoted in an article on the anticipated viewing figures for England’s World Cup quarter-final against Sweden. 24.4m people tuned into ITV for England’s last-sixteen against Columbia. Julian remarked that “these are very, very big numbers, figures that are not far off the top TV programmes ever, so in that sense it is particularly surprising. It shows that people still love these really big live events that bring shared experiences and there’s nothing quite like the World Cup to bring the whole nation together. When it comes to Sweden people will want to be part of that,” and viewing figures may rise. Julian said “It’s on at the weekend, it’s in the middle of the day, and while that could mean figures go either way, people are more likely to be at home to turn the football on.”

The Guardian 6 July 2018

Claire Enders was quoted in an article contemplating the prospects of former Chief Executive of WPP Sir Martin Sorrell, and his new company, S4 Capital. His former employer has already issued a legal threat if he pursues a take-over bid for Media Monkeys, and sceptics argue his personal reputation will inhibit him. However, he has already managed to attract £11m from investors, including Schroders and Lord Rothschild. Claire was quoted saying “he has certainly got a lot of mojo. That matters in the real world and he has been very rapid and aggressive in defending his reputation. People admire that. Do people care he is a bully, no. Most people have encountered that. He does have a good reputation for creating businesses. People accept these flaws, as long as there is no wrongdoing.”

Daily Mail 5 July 2018

Tom Harrington was quoted in an article on the launch of Amazon’s free, ad-funded TV channels. This launch represents a threat to commercial broadcasters and their domination of the TV advertising market. Tom explained that 'Amazon has offered its channels service for a while but what this would do is expand their offering. They will likely be looking to strike more partnerships across Europe with free-to-air broadcasters. The next obvious step would be for Amazon to then deal with the advertising end of things, selling the ads that appear alongside content that appears on Prime. But broadcasters like ITV, the BBC and Channel 4 are very worried about the growth of Amazon and Netflix and they will not want to run the risk of giving up their relationships with advertisers. I imagine they will be reticent about the prospect of any deals like that, even though it could be easy money at a time when revenues are under pressure.'

Digiday UK 5 July 2018

Matti Littunen was quoted in an article on Amazon’s pay TV expansion in Europe. Having previously relied on monthly subscriptions, Amazon are now developing free and advertising-funded channels. Though this, alongside their $5 billion budget for increasing video content, should bring in audiences from both traditional TV and over the top services, they may face difficulty attracting U.K. and European broadcasters, who are reluctant to hand power to digital platforms. Matti warned that ‘For most European broadcasters the core free-to-air business is still relatively robust, supplemented by growing video-on-demand ad revenue from their own over-the-top services. They are much less desperate than publishers to jump at every partnership opportunity. The deal would have to be very sweet in terms of promotion of content, revenue share and transparency. No one wants to strengthen Amazon’s gatekeeper position any further.’ Matti also added that ‘even the broadcasters who are fine to partner with the U.S. platforms on subscriptions are hesitant to give up ad inventory.’

Financial Times 4 July 2018

Douglas McCabe was quoted in an article on the Telegraph Media Group’s 32% dip in operating profits which comes in face of declining print advertising. Nick Hugh, TMG’s Chief Executive since summer 2017, plans to reverse this decline by through registration. He aims to have 10m registered users and a target of 3m by the end of the 2018 fiscal year. Douglas stated that “At one level no one wants to embrace a big profit decline, but on the other hand it does reflect a strategic investment in journalism which looks sensible, as does the focus on membership and subscriptions.”

BBC News 4 July 2018

Alice Pickthall was quoted in an article on the Telegraph Media Group profits, which halved last year as revenues from print advertising and circulation fell by 9%. The publisher of the Daily Telegraph and its Sunday stablemate said pre-tax profits fell from £27.1m in 2016 to £13.7m last year. Operating profit fell £11.5m to £21m, which the statement said reflected a £10m investment in "journalism, data and technology ... we anticipate revenue to stabilise in 2018/2019 with profits to follow". Alice said the Telegraph's digital push would not make up for the decline in print revenues in the short term but was a necessary move given the sliding sales of the papers.

IBC365 4 July 2018

Claire Enders was quoted in an article on Disney, which launches its own OTT service next year. Disney has bought the necessary technical expertise by acquiring control of streaming specialists BAM Tech in a multi-billion deal, and recently launched a sports service ESPN+ in the US following on from Disney Life in the UK. Disney will not try to match Netflix for volume but will offer four to five original series and a similar number of movies such as Toy Story 4 and the sequels to Frozen and The Lion King. Claire believes that the paramount OTT battlefield will be in North America and rollout launches elsewhere will come later. As has been previously announced Disney will stop licencing content to Netflix in the US from next year. She added “Disney told me they had no plans to cease licencing Netflix outside North America for the foreseeable future. I asked them, ‘surely you are not planning to do one size fits all are you?’ And the answer was, ‘no we are not’”. Enders believes that the OTT innovation is essential for the saturated, cord-cutting US market but that outside the US where cord-cutting is not an issue, it is more important to protect, and grow, the pay TV business without risk of cannibalisation probably at least for another five years.

Variety 2 July 2018

François Godard was quoted in an article on Telefonica’s La Liga and Champions deal. It has paid €980 million ($1.1 billion) for each new LaLiga season in the deal, €360 million ($420 million) each Champions League and Europa League season, a net cost “up just 5%” on the 2018-19 season, it said in a statement Friday.  The deal comes as the June auction of Premier League broadcast rights, at a total £1.55 billion ($2.0 billion), was about 10% down on the prior auction, and Italy’s Serie A, its top football league, managed to extract from Sky Italia and Perform a combined €973 million, 2% less than for 2015-18, for 2018-21 league rights, according to Enders Analysis. François said that Telefonica is now targeting “the upper end on the market,” aiming to drive average revenue from not just pay TV but also triple play subscribers, building a mass subscriber base. He added, “This way it will become harder for not only Vodafone but also for Amazon or eventually Apple to build alternatives ecosystems”. 

the Industry Observer 28 June 2018

Alice Enders was quoted in an article on Merlin, the global digital rights agency for the independent label sector, which has published its 10th-anniversary Impact Report to celebrate the global success of its independent label membership. Findings from the report include an analysis of ½ trillion streams over 4 years across Merlin’s global service partners, showing a 25% higher market share for Merlin’s member repertoire on paid vs free tiers. Additionally, annual revenues have surged – Merlin will distribute $0.5bn per annum to members. Alice comments “If Merlin had not been established, numerous independent labels would simply have disappeared from sight as streaming overtook purchasing”.

Bloomberg 21 June 2018

Claire Enders was quoted in an article on Comcast which faces one of the biggest moments in the cable giant’s 55-year-old history. After Walt Disney Co. raised its offer for 21st Century Fox Inc.’s entertainment assets to $71.3 billion, Comcast Chief Executive Officer Brian Roberts is now mulling how to respond to the escalating bidding war. Claire said if Comcast gets stymied in its bid for Fox, there’s a greater chance it will pay more to hold onto Sky. She added “I think the market is expecting another move from Comcast” for Sky.

BBC News 21 June 2018

Joseph Evans was quoted in an article on IGTV, the longer-form, vertical video service, which will work as a bolt-on feature to Instagram as well as having a standalone app of its own, which is enormously important to parent company Facebook. Joseph said “What Facebook has found is that pre-roll ads don’t work all that well for short videos because people just scroll on and don’t bother watching them. Short videos don’t have any space to have a mid-roll ad. A post-roll ad is a non-starter because people just scroll away. So, what you need if you want to video ad inventory is you need longer videos.”

Marketing Week 21 June 2018

Douglas McCabe was quoted in an article on The Guardian, News UK and the Telegraph that are looking to rival Facebook and Google with the launch of a joint ad platform that will allow advertisers to directly access and buy data and inventories. Douglas said that the venture is significant because it now offers advertisers and agencies a quality environment, reach and great targeting all in one place. He said “It’s not that Facebook can’t offer some of that but it’s a differentiated position because it’s equally easy to use and has a comparable scale. The downside is that it doesn’t necessarily have the same amount of time being spent on it. The upside is that it’s a quality environment that brands want to be associated with. This is a stepping stone in a journey to try and reclaim advertising for quality content in digital”.

Les Echos 12 June 2018

Gill Hind was quoted in an article on the British free television channels, grouped in Digital UK - the BBC, the public media; ITV, the British TF1; and Channel 4, a semi-public channel to resist the competition of Netflix and Amazon Prime Video. They have decided to commit to investing an additional £ 125m over five years in Freeview, their common platform for DTT television access. While Freeview already reaches more than 11 million UK households who primarily access television through this channel and benefit from an elaborate program guide, the idea is that this interface will gradually provide all the TV viewing features, from linear to catch-up television. Gill said "Started in 2002, Freeview is a key element of the strategy of British free channels, which still represent 70% of the audience, to adapt to new forms of television consumption".

the Telegraph 12 June 2018

Claire Enders was quoted in an article on the $85bn (£64bn) takeover of Game of Thrones maker Time Warner by the telecoms colossus AT&T. The Department of Justice (DoJ) has sued to block the deal, claiming the combination of a major Hollywood studio and America’s biggest telecoms operator would stifle innovation and mean higher bills for consumers. The Murdoch family, having failed in 2014 with their own bid for Time Warner because of disagreements overvaluation, are selling up. Disney, already Hollywood’s most powerful studio thanks to the success of Pixar, the Marvel films and return of Star Wars, has agreed to buy most of 21st Century Fox for $52bn in shares. Claire said "There is a range of potential outcomes tomorrow. A middle path seems most likely. Leon could send AT&T and the DoJ to negotiate remedies, or he could force it to spin off a network or two. But this is a sensible person, and he has allowed a deal like this before, with conditions. "Come what may Comcast is going to be sharpening its pencil for a Fox bid."

Financial Times 11 June 2018

Claire Enders was quoted in an article on Gavin Patterson’s departure from BT. The Group abruptly pushed out Chief Executive Officer Gavin Patterson after the board and investors lost faith in his turnaround plan for the former phone monopoly. Patterson will step down later this year when a successor is in place, likely in the second half, BT said in a statement Friday. Mr Patterson’s position had been in question outside the boardroom since an Italian accounting scandal blew up 18 months ago, with the company then beset by profit warnings and record fines, and amid questions over its investment in sports and ability to deal with an unhappy national regulator. Claire joked that he might make a suitable candidate to replace Richard Scudamore as head of the Premier League given the amount of BT money he had spent on content rights. She said “No one has been more generous to football than Gavin Patterson”.

Wired 8 June 2018

Julian Aquilina was quoted in an article on Amazon's Premier League deal. Amazon has joined BT Sports and Sky as a broadcaster of top-flight football. In the latest auction, BT picked up the other one for £90 million to round off its football portfolio, bringing its total number of games to 52 per season; Sky Sports will broadcast a further 128. The moves mean it's the first time a full round of matches will be shown live in the UK - but football fans aren't too happy. However, Julian said that there are still people who are not Amazon customers, and they might be intrigued by, say, a free Amazon Prime trial to watch the games. Once the matches are over, some of these new Prime customers are likely to stay, boosting Amazon’s opportunity to gain market share. Julian added that right now, it’s much more cost effective to broadcast live matches via satellite or terrestrial TV than streaming it via the internet. The rights to stream Amazon’s other content – like movies and TV series – are usually also cheaper than football rights, so Amazon is likely to focus on those for a while. He said “it will be a long time before companies like Amazon will turn their attention to live sports as whole market”.

Marketing Week 7 June 2018

Julian Aquilina was quoted in an article on Amazon, who has made a major move into the UK sports rights space, picking up the rights to stream 20 Premier League matches a season across the 2019/20 to 2021/22 seasons in the UK. While it is unclear how much Amazon paid for the rights, it is thought BT paid around £90m for a similar package with Amazon’s figure likely to be in roughly the same ballpark. Julian suggests Amazon could afford to spend a lot more on football but has “chosen not to”. This is in part because there are inherent disadvantages to buying Premier League rights. For one, they don’t have the global scale that digital players such as Amazon are typically looking for. Secondly, there is no shelf life in live sports. And thirdly, while the Premier League is very important in the UK, it has a relatively low appeal with average viewing figures of little more than 800,000. He said “What Amazon has done is bought the cheap packages and extracted good PR and marketing value”.

the Guardian 4 June 2018

Claire Enders was quoted in an article on Sir Martin Sorrell, who is plotting his return. Last week, he announced the reverse takeover of another small listed vehicle – to be renamed S4 Capital in reference to four generations of the Sorrell family – fronting £40m of his own money to rebuild his empire. Claire says that like these other business leaders, whether he succeeds or fails, Sorrell cannot step back “He cannot change his character and be someone who retires: it is not his way”. She adds “There are 33 years [spent at the helm of WPP] he can’t have again – and whether he has the same judgment is another matter – but Sorrell is a workaholic and incredibly motivated by achievement”. Claire points out that in the media industry, gerontocracies are strikingly common: Rupert Murdoch is 87, Liberty Global owner John Malone is 77, serial entrepreneur Barry Diller is 76 and Viacom’s Sumner Redstone, aged 95, is still hanging in there – albeit leaning heavily on his daughter Shari. With Sorrell’s telephone book, she reckons few would bet against him. “He has fantastic contacts with every major chief executive on the planet: he can get a meeting with anyone,” she says. “If anyone can build a business, he can”. Claire believes that Sorrell may even look to make the ultimate final deal – bidding for parts of the WPP empire that he created, such as data business Kantar.