Publications

Format: Sep 2017
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Sector(s) Datesort ascending
UKTV 2016 results: viewing continues to climb, what awaits online?

2016 was another good year for UKTV, with appreciable growth in revenue and linear viewing share; a trajectory the product of a sensitive pay/free balance of its channels, investment in productive EPG slots and development of its original programming suite

Recent deals with both Sky and Channel 4 will go some way to providing financial stability, allowing UKTV to invest with more certainty in new content and encouraging further development of its online proposition

UKTV Play has underperformed, chiefly due to a lack of content. But with plans to significantly ramp up both its offering and marketing spend, it may well unlock further audiences; specifically targeting elusive 16-34 year-olds

  • UKTV
Media, TV, UK Media 19 May 2017
Virgin Media Q1 2017 results: Roll-out and competitive pressures

Virgin Media has run into network roll-out difficulties, having to revise down its previously stated homes passed figures and not committing to a full year 2017 target, with the current build run rate well below that required to hit its medium-term targets

Operating results were a little mixed, with ARPU showing signs of continued discounting and market-wide competitive pressures, and churn was higher than the previous year, but net adds were strong, RGUs stronger, and UK consumer cable revenue growth is still over 4%

Slower Project Lightning roll-out and weaker ARPU growth points to slower revenue growth during 2017 than might otherwise have been expected, but Virgin Media still has relatively strong prospects in a toughening market 

  • Liberty Global
  • Virgin Media
Fixed Line, Media, Mobile, Telecoms 19 May 2017
Mounting risks to marketing effectiveness

A partial — if seductively persuasive and impressive — data framework for online advertising combined with short-term incentives have encouraged a dramatic shift in the ratio of brand to activation advertising from 60:40 to 50:50, depressing the pricing of display media

Mounting evidence suggests a focus on quick returns and cheap media at all costs is hurting marketing effectiveness, measured in long-term Return-on-Investment, brand equity and consumer satisfaction

Guarding against this risk requires brand-focused advertisers to create more space for long-term judgement for CMOs, and to refocus agency remuneration towards planning and creative work<o:p></o:p></span></h2>

Internet, Media, Technology, UK Media 18 May 2017
BBC Studios: make or break

The launch of BBC Studios - the relocation of most of the broadcaster's in-house production capability into a commercial subsidiary - gives it the ability to compete for work elsewhere at the expense of a guaranteed quota at the BBC

The upside is large, with the opportunity to retain an increased amount of intellectual property, a requirement of growing importance. However, so is the risk, with sustainability dependent upon a major cultural shift; from comfortably retained provider to competitive production engine

Outside of a weak track record when competing for work, other entwined issues must be overcome for success in the medium term; demonstration of transparency in the commissioning process and watertight transfer pricing practices, and the dispelling of state aid concerns

  • BBC
Media, TV 10 May 2017
TV platform forecasts to 2026: DTT and pay-lite set to grow

Our latest forecasts point to the continued strength of DTT within the UK broadcast market. We predict DTT-only homes will account for 42% of TV viewing ten years from now, up from 38% today

Much of this is due to the UK’s ageing population profile, since DTT skews older. The number of over-45s in DTT-only homes is set to increase by 13% by 2026

The other key factor is the continued growth of flexible pay-lite services—for example, Netflix and NOW TV—which are of greater appeal to younger audiences

  • Amazon
  • BT
  • EE
  • Freesat
  • Freeview
  • Netflix
  • Sky
  • TalkTalk
  • Virgin Media
Media, TV, UK Media 5 May 2017
Sky still on track: Q3 2017 results

Sky delivered 5% year-on-year revenue growth over the first nine months at constant exchange rates, although operating profits fell due to several factors, most notably the massive step-up in UK Premier League TV payments under the new contract

On closer inspection, relatively weak UK & Ireland Q3 revenue growth compared with previous quarters largely reflects one-off special factors 

Otherwise, positive quarters for Sky Germany & Austria and Sky Italy and improving cost efficiencies suggest that the Sky Group remains broadly on track to deliver its Investor Day 2016 guidance objectives

  • Sky
  • Sky Deutschland
  • Sky Italia
Media, TV 3 May 2017
People, not devices: Audience buying in a cross-device world

Cross-device identity profiles are used to stitch together fragmenting online ad audiences, but also to enable new links between advertising and marketing, across European markets

This moves value from media itself to understanding each consumer and how they access content and services on proliferating connected devices

By 2020 we predict that 58% of all UK online ad buys by value will make use of high-quality audience IDs, led by the largest advertising platforms but limited by privacy regulation and cost

  • Channel 4
  • Facebook
  • Google
  • ITV
  • LinkedIn
  • Sky
  • Twitter
  • Yahoo
Media, Mobile, Technology, Telecoms, TV 3 May 2017
European mobile in Q4 2016: Poised for growth

European mobile service revenue growth was unchanged in Q4 on the previous quarter at -0.1%, tantalisingly close to growth but just held back by renewed mobile termination rate cuts in Germany

‘More-for-more’ tariff changes are becoming increasingly commonplace, as operators increase data bundle sizes to allow for volume demand growth, but nudge up pricing as partial compensation.  This has not yet translated into positive revenue growth across Europe as a whole, but increasingly looks like it will do, with a number of moves made in early 2017

The quarter saw completion of two M&A deals in Spain and Italy with MasMovil completing its acquisition of Yoigo, and H3G Wind completing their joint venture to form Wind Tre. While the former is unlikely to alter the market dynamics much, the latter, resulting in the entry of Iliad in Italy, has the potential to disrupt the pricing dynamic in that market, although ultimately it will be limited by Iliad’s initial MVNO economics and dearth of spectrum

  • EE
  • France Telecom
  • Hutchison 3G
  • Iliad
  • O2
  • Orange
  • SFR
  • T-Mobile
  • Telecom Italia
  • Telefonica
  • Vimplecom
  • Virgin Media
  • Vodafone
Mobile, Telecoms, Vodafone 19 April 2017
Media & Telecoms: 2017 & Beyond Conference slides

Enders Analysis co-hosted the annual Media & Telecoms 2017 & Beyond conference in conjunction with Deloitte, Moelis & Company, Linklaters and LionTree, in London on 2 March 2017.

This report contains the slides used by Tom Mockridge, Matthew Kirk, Andrew Griffith, and Geoff Moelis.

  • 21st Century Fox
  • BBC
  • BT
  • Guardian Media Group
  • Hutchison 3G
  • ITV
  • Johnston Press
  • Liberty Global
  • Ofcom
  • Sky
  • Trinity Mirror
  • Turner
  • Virgin Media
  • Vivendi
  • Vodafone
Media, Telecoms, TV 19 April 2017
Media & Telecoms: 2017 & Beyond Conference transcripts

Enders Analysis co-hosted the annual Media & Telecoms 2017 & Beyond conference in conjunction with Deloitte, Moelis & Company, Linklaters and LionTree, in London on 2 March 2017.

The day saw over 450 senior attendees come together to listen to 30 leaders and senior executives of some of the most creative and innovative businesses in the media and telecoms sector, and was chaired by David Abraham.

This report provides edited transcripts of the presentations and panels, and you will find accompanying slides for some of the presentations here.

Videos of the presentations are available on the conference website.

  • 21st Century Fox
  • BBC
  • BT
  • Canal Plus
  • Discovery
  • Guardian Media Group
  • Hutchison 3G
  • ITV
  • Johnston Press
  • Liberty Global
  • Ofcom
  • Sky
  • Trinity Mirror
  • Turner
  • Virgin Media
  • Vivendi
  • Vodafone
Media, Music and Radio, Public Policy, Technology, Telecoms, TV 19 April 2017
UK mobile market Q4 2016 - Nearly back to growth

UK mobile service revenue growth was -0.1% in Q4, a 0.6ppt improvement from the previous quarter. This was helped by some modest price firming, continued strong data growth, and some inflation in handset prices

EE was the strongest growing operator after being the weakest just 12 months ago, with its efforts to improve customer service, network performance and perceptions of network performance starting to pay off. H3G had a strong H2, with strong customer additions while not sacrificing ARPU, although it is still clearly taking steps to manage capacity demand. O2 had another solid performance with a modest improvement in service revenue growth, and Vodafone suffered from weak ARPU primarily due to pricing pressure in the business market

The outlook for market service revenue growth is fairly positive, with ARPU-enhancing pricing moves in evidence, supported by continuing strong data volume growth, and existing customer price increases due to take effect from Q2 2017

  • EE
  • Hutchison 3G
  • O2
  • Vodafone
Mobile, Telecoms, Vodafone 13 April 2017
French election: High tide of populism receding?

France’s first round of the presidential election on 23 April looks set to deliver a run-off on 6 May between nationalist Marine Le Pen and pro-EU, pro-NATO reformer Emmanuel Macron, who holds a 20 point lead in that contest – a much higher margin than last year’s mistaken projections for Clinton and Remain

Should Mr. Macron become president and win a majority in the June parliamentary elections, a challenge for nascent party En Marche!, his reformist platform would tackle France’s main economic issue: low employment. The anticipated privatisation of Orange could launch a burst of media and telecom M&A 

A defeat of Marine Le Pen and a new reformist French government could relaunch the partnership with Germany, making the EU more confident in its future, and improving auspices for a sensible Brexit

  • Orange
Media, Public Policy, Telecoms 12 April 2017
Spotify secures UMG royalty discount

As Spotify wavers around the breakeven point, the deal with UMG is good news for royalty costs and thus for the likely advent of the IPO rumoured for autumn 2017

Royalty costs will reduce if Spotify reaches the subscriber growth targets that have been agreed – these have not been disclosed, so are hard to track

Question marks persist over whether a two-week optional windowing of new releases on the premium tier will significantly drive upgrades from the free tier

  • Apple
  • Spotify
  • Vivendi
Media, Music and Radio, Technology 11 April 2017
Article 50 triggers Brexit in 2019

The UK intends to exit the EU on 29 March 2019 and will submit the hoped-for agreement on a new strategic partnership with the EU to a vote in Parliament

The EU and the UK agree to seek an early settlement on the rights of 4 million nationals and the Irish border. Incentives diverge on the size of the UK’s Brexit bill

Unless a withdrawal agreement is reached, the EU will balk at starting talks on the UK’s desired free trade agreement (FTA), making a hard Brexit more likely than not

Brexit, Media 30 March 2017
Video viewing forecasts to 2026

2016 was yet another year in which we saw big changes in the UK’s video consumption habits amongst the under-45s, with little let up in the decline of traditional broadcast linear TV viewing for the younger age groups

Online video-on-demand services will continue to grow, partly at the expense of traditional TV audiences. We also expect the overall volume of viewing to rise, mainly due to wider production of and access to short-form content

Despite these changes, conventional broadcasters look to be strong for years to come—we estimate they will still account for 80% of all video viewing in 2026

Media, TV, UK Media 23 March 2017
YouTube, programmatic and brand safety

Media reports of ads by top brands appearing next to extremist content on YouTube have surprised advertisers and led to a barrage of criticism from other media companies, agencies and the UK government

Despite several advertisers pausing spend, the revenue impact for Google is likely to be small in the short term – but the debate is a symptom of ongoing tension between “frenemies”: large agencies and Google & Facebook 

By urging Google alone to educate display advertisers and filter campaigns, agencies risk ceding more of their client relationship to the advertising giant, while calls for the platform to make all editorial judgements on political content are inappropriate

  • Google
  • YouTube
Media, Public Policy, Technology, TV 23 March 2017
21CF and the bid for Sky: state of play

Secretary of State Karen Bradley has intervened on two UK public interest grounds in 21CF’s bid for 100% ownership of Sky: media plurality, as in 2010, and a commitment to broadcasting standards, new in 2017

Ofcom will assess any implications of 21CF’s full control of Sky on whether it is ‘fit and proper’ to hold a broadcast licence, reporting back on 16 May

Undertakings are a live issue in the 2016 bid, notably to protect the editorial independence of Sky News, noting the bid faces determined opposition from certain quarters

  • 21st Century Fox
  • BT
  • News Corp
  • Ofcom
  • Sky
Media, TV 21 March 2017
360 and Virtual Reality: a new angle for video entertainment

The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium

Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment

2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers

 

 

  • Apple
  • Facebook
  • Google
  • HTC
  • NBC Universal
  • Samsung
  • Sony
  • Walt Disney
Media, Technology, Telecoms, TV 16 March 2017
UK broadband, telephony and pay TV trends Q4 2016: Under pressure

UK residential communications market revenue growth fell to 3.3% in Q4, from 5.4% in the previous quarter. The slowdown was mainly caused by BT’s overlapping price rise dropping out, but there was also ARPU weakness at Sky (due to price rise timings) and TalkTalk (due to re-contracting customers)

Volume growth in the core three products continued its decline, with broadband reaching saturation, line rental suffering from Virgin’s broadband solo offering and pay-lite TV offers losing momentum. Looking forward, recent and upcoming price increases should allow some recovery from current revenue growth levels

However, competitive pressures are increasing. Virgin Media’s network extension continues to accelerate, TalkTalk is attempting to stabilise its base and new customer pricing has fallen substantially since December 2016 – causing a dramatic disparity in new/existing customer pricing. The higher churn and/or reduced ARPU this is likely to cause, combined with slowing market volumes, indicate that market revenue growth is unlikely to recover to the 5-6% it enjoyed for most of 2015 and 2016

 

  • BT
  • Sky
  • TalkTalk
  • Virgin Media
Fixed Line, Media, Telecoms 16 March 2017
BT tightens grip on Champions League TV

The latest auction of UEFA Champions League televised UK rights has seen further high 32% inflation as BT renewed its ownership for the three seasons from 2018/19 for an annual payment of £394 million

Although BT annual payments are to increase by £95 million from 2018/19, the new contract offers added commercial attractions, though we expect BT’s efforts to monetise them will fall some way short of the cost increase

However, BT had to win to cement its position against Sky as a strong number two in UK premium pay TV and we expect weaker future inflation of premium football rights. For Sky followers, the focus is now on the UEFA auctions in Germany and Italy, where the outcome is far from certain

  • BT
  • ITV
  • Sky
Media, TV 15 March 2017

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