Publications

Format: Apr 2019
Sector(s) Datesort ascending
Out of home: opportunities and threats crowd the doorway

Out of Home (OOH) is bucking the trend in UK traditional media and continues to grow, driven by the digitisation of inventory as the paper estate recedes

Digital OOH now accounts for 50% of total OOH ad spend. Soon digitisation will slow, as much OOH inventory cannot be converted from posters to digital screens; sustained growth will require a different form of change

The industry is amidst structural shift – driven by consolidation and automation – which could be wholly positive, but a lack of cooperation between major players risks stifling innovation and the medium’s growth

  • Google
Media, Technology 23 April 2019
5G to change the shape of UK mobile

The capacity boost with 5G will be more important than any speed or latency uplift. We estimate a 7-fold increase in mobile capacity in the UK and 13x+ for O2 and H3G

We view fixed mobile substitution products as quite niche although the number of mobile-only households is likely to creep up. mmWave would have the capacity to substitute for fixed but has many hurdles to overcome

Capacity-constraints have tempered competition of late and their removal risks an increase in intensity, especially as H3G views itself as sub-scale – good for policy makers but another challenge to add to the industry’s woes
 

  • BT
  • EE
  • Huawei
  • Hutchison 3G
  • O2
  • Vodafone
Telecoms 16 April 2019
Google and game streaming: double or quits

Google’s Stadia promises the most credible game streaming service yet, but building a subscription bundle of top titles would require an all-out bet in the sector

Google is building its own game studios – to win over others it must overcome a troubled history in gaming, mitigating risks to developer business models and creative integrity

Games are much more technically demanding to stream than video, presenting an advantage to Google, Microsoft and Amazon – and a boost to telecoms network demand, welcomed by operators

  • Amazon
  • Google
  • Microsoft
  • Sony
  • YouTube
Media, Technology, Telecoms 11 April 2019
The North heads south: European mobile in Q4 2018

European mobile service revenue growth dropped to -1.3% – its lowest level in three years – particularly disappointing as growth should be bouncing back post-EU roaming tariff cuts

Having enjoyed relatively favourable dynamics in 2018, the UK and Germany are facing marked changes in momentum from here

Regulation limiting intra-EU call prices could hit hard – up to 6% of revenues and 20% of EBITDA in the UK, although other EU countries may be less exposed due to lower tariffs currently

  • BT
  • Huawei
  • Hutchison 3G
  • Iliad
  • O2
  • T-Mobile
  • Telefonica
Non-UK Telecoms, Telecoms 4 April 2019
Apple’s showtime: everybody gets a service, partners get pennies

Apple is strengthening its household model by doubling down on family-friendly content subscriptions and payments

The model is reliant on hard bargains with mainly US partners, which risks sacrificing potential scale for a short-term boost in margin dollars

The new services offer glimpses of novel concepts, but stop short of taking risks to truly differentiate—a problem in TV, where Apple’s distribution advantage is slimmer than Oprah would have it

  • Apple
Media, Technology, Telecoms, TV 3 April 2019
BBC Studios and Discovery: a new SVOD and the UKTV split

The split of UKTV has been announced with the lifestyle channels going to Discovery, while the balance, along with the UKTV brand and VOD service, retained by the BBC, costing BBC Studios £173 million

In the same release, a new, global Discovery SVOD “powered” by BBC natural history and factual programming was announced, backed by a ten-year content partnership

The deal is a positive step for the BBC, which safeguards against flaky brand attribution internationally and the potential loss of revenues from Netflix, which is becoming more choosy when acquiring content

  • BBC
  • Discovery
Media, TV, UK Media 2 April 2019
Media & Telecoms 2019 & Beyond conference Part 1 – Speaker Transcripts

On 7 March 2019 Enders Analysis co-hosted the annual Media & Telecoms 2019 & Beyond conference with Deloitte, sponsored by Afiniti, Barclays, and Linklaters. 

Back again for his third year running, former Channel 4 Chief Executive David Abraham chaired the conference.

With a stellar speaker line up, this invitation-only conference was a highly informative and stimulating day. The conference saw over 450 senior attendees come together to hear some of the world’s leading media and communications executives describe and debate the forces shaping their businesses.  

This report provides edited transcripts of the keynote speaker presentations.

Media, Telecoms 29 March 2019
Media and Telecoms 2019 & Beyond Conference Part 2 – Panel Transcripts

Part 2 of our Conference Report provides edited transcripts of the panel discussions.  

Video highlights of these sessions are available on the conference website. 
 
This invitation-only conference was a highly informative and stimulating day, seeing over 450 senior attendees come together to hear some of the world’s leading media and communications executives describe and debate the forces shaping their businesses. The conference featured thought-provoking discussion panels focused on the disruptive impact of digital video, media strategies for news publishers and the key trends in telecoms.

Media, Telecoms 29 March 2019
UK broadband, telephony and pay TV trends Q4 2018 - High speed accelerates, but pricing under pressure

Market revenue growth accelerated to 3% in Q4, but it might never reach this level again, being helped by a never-to-be-repeated BT overlapping price rise

With price rises becoming more challenging in general, and superfast pricing under pressure in particular, maintaining/increasing ARPUs is becoming more difficult despite superfast volumes surging

Openreach’s ultrafast roll-out has accelerated, challenging Virgin Media and bringing the prospect of further price premia, but perhaps too late to be of significant benefit in 2019

  • BT
  • Sky
  • TalkTalk
  • Virgin Media
  • Vodafone
Media, Telecoms 28 March 2019
UK mobile market Q4 2018: Headwinds gathering for 2019

Following record growth last quarter, the UK mobile market took a step down to just 0.9% growth in the quarter to December on the back of increasing pressure in the business market and the impact of out-of-bundle limits

2019 looks set to be a tough year for the sector with: a series of potentially painful regulatory hits; markedly lower price rises than last year; and early signs of a degree of creeping competitive intensity

We view 5G as a much-needed means of expanding capacity in the sector with upsides from M2M and IoT likely to remain relatively small

  • BT
  • EE
  • Huawei
  • Hutchison 3G
  • O2
  • Vodafone
Telecoms 26 March 2019
BritBox’s muted arrival: ITV FY 2018 results

After the heights that Love Island and the World Cup took ITV to in H1, the broadcaster held on over the tougher last few months of 2018 to see growth in ad revenue (0.8%) and total viewing (linear and VOD, 3%)

However, it was the announcement of the subscription video service BritBox—with the discussions around the “strategic partnership” with the BBC in its concluding phase—that garnered most interest

ITV’s investment in the service is modest when compared to its global competitors—up to £25 million in 2019, £40 million in 2020 and declining thereafter—but it is a prudent low-risk entry into what is an expanding but difficult market

  • BBC
  • ITV
Media, Telecoms, TV, UK Media 18 March 2019
UK online advertising: Brexit year forecast and trends

UK online advertising spend continued its double-digit growth in 2018, up 11% to reach nearly £13bn in annual spend or 58% of the total advertising market, but a no-deal consumer downturn could nearly stop growth this year

Google, Facebook, Amazon, professional services firms and the largest marketing cloud companies are the biggest winners, while content media, media agencies and independent advertising technology firms languish 

Self-regulation has improved as pressure mounts on advertising technology firms, but interventions by both privacy and competition authorities are now inevitable

  • Amazon
  • Facebook
  • Google
Media 15 March 2019
Virgin Media: proceeding with caution as speed advantage comes under fire

After strong underlying 2018 results, the more subdued outlook for 2019 is an important shift, driven by regulatory pressure on mobile, higher programming costs, one-offs and softening demand

Lightning is continuing to drive market share gains in new build areas, and should provide a 2ppt tailwind to revenue growth in 2019, but enhanced visibility on the economics of rollout suggests that its conservative approach is a wise one

In existing build areas, Virgin Media is facing-off pricing pressure from TalkTalk on high speed, and potentially from BT on even higher ultrafast speeds, with it moderating pricing and launching a market-beating 500Mbps product in Spring 2019 in response

  • BT
  • Liberty Global
  • TalkTalk
  • Virgin Media
Telecoms 14 March 2019
Huawei and 5G: Identifying the risks

Governments and operators have come under increasing pressure to exclude Huawei’s 5G equipment from national networks, with justifications usually kept vague and wide-ranging rather than specific, and no evidence provided

Given the role of Huawei’s 5G equipment in the network and the extent of existing testing and checking, realistic security risks that apply to Huawei and not to all other equipment suppliers are hard to conceive

The risks of any ban are however very real; with Huawei one of only three global-scale telecoms equipment suppliers, and the preferred early choice for 5G radio equipment in the UK, removing this choice will massively increase costs and delay roll-outs of cutting-edge connectivity

  • BT
  • Nokia
  • O2
Media, Telecoms 7 March 2019
The future of video viewing: forecasts to 2028

Linear TV is still a mass market medium, watched by 90% of the UK population each week. However, our latest viewing forecasts predict broadcasters will account for two-thirds of all video viewing in 2028, down from c. 80% today, due to the relentless rise of online video services

Total viewing will continue to increase as more short-form content is squeezed into people’s days, particularly on portable devices, but the key battleground for eyeballs will remain the TV screen

The online shift has already had a huge impact among younger age groups, with only 55% of under-35s’ current viewing to broadcasters. Older audiences are slowly starting to follow suit, but have a long way to go

  • Amazon
  • Google
  • Netflix
  • YouTube
Media, TV, UK Media 6 March 2019
TikTok's challenge to Western social media

Launched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe

Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year

Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination

  • Alibaba
  • Facebook
  • Google
  • Snap
  • Tencent
Non-UK Media, Internet, Media, Technology 5 March 2019
GDPR tested on Google, ad tech and Facebook

Recently issued regulator rulings on Google, ad tech companies and Facebook challenge prevailing online advertising practices of obtaining user consent under the EU’s General Data Protection Regulation (GDPR)

Rulings from France on Google and ad tech partners of media owners called them out for inadequate disclosure to users, and excessive merging and processing of data

In a landmark precedent for Germany, the Federal Cartel Office found that Facebook lacked “freely given” consent from users, calling its terms “exploitative” and an abuse of its dominant position, also harming competitors

  • Facebook
  • Google
Non-UK Media, Non-UK Telecoms, Internet, Media, Non UK Media, Public Policy, Technology, Telecoms, UK Media 1 March 2019
The Next solution to ecommerce

Consumers have more shopping options than ever, forcing businesses to expand how and when they offer services. Online giants Amazon and Alibaba are adding physical retail to extend their routes to market

Omnichannel provides consumers an enhanced, seamless brand experience from research and discovery to purchase, delivery and after-sales, and allows businesses to react to changing consumer preferences more flexibly

Next is an omnichannel success story, introducing 48-hour home delivery in 1988 and online sales in 1999. Its market-leading fashion ecommerce business offers lessons on the future of retail

  • Alibaba
  • Amazon
Brexit, Media, UK Media 28 February 2019
MWC – all very exciting but where's the money?

The combination of 5G, AI, IoT and big data were evangelised at MWC as generating massive scope for the transformation of multiple industries. 

That much is probably true, but it is the tech and consultancy companies who will likely receive the benefits, with connectivity revenue likely to be modest.

For the operators, 5G brings more capacity much needed for hungry smartphone users, and perhaps the opportunity to transform themselves into a leaner operating model.
 

  • Alibaba
  • EE
  • Google
  • Microsoft
  • Nokia
  • Samsung
  • Telefonica
Media, Telecoms 28 February 2019
O2 delivering well on many, but not all, fronts

O2’s Q4 results delivered market-leading service revenue growth of 3%, double-digit EBITDA growth, sustained strong net adds and low churn. 

With ARPU service revenue growth flat, all of the growth came from other service revenue including M2M (machine-to-machine) and MVNO; a lumpy category up by more than 40%. 

Following a period of strong outperformance, O2 will face some challenges in 2019: some cost inflation to mitigate and the risk of a churn increase following December’s outage although experience suggests this is likely to be short-lived.
 

  • O2
  • Vodafone
Media, Telecoms 27 February 2019

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