Publications

Format: Jul 2018
Sector(s) Datesort descending
Football embraces Chinese 'hot' money - at a risk

In a display of chutzpah, Mediapro acquired the Ligue 1 domestic broadcasting rights from 2020-24 in what is the most disruptive shock to the French broadcasting industry in a generation; one that is likely to accelerate Canal+’s decline, force a review of the outdated regulatory framework, and possibly spur an M&A spree.

The Mediapro move only makes sense as a highly speculative bid to resell the rights, or a dedicated channel, to French platforms in 2020. The odds are high that the broker ultimately fails to fulfil the contract, as just happened in Italy, where Sky is now expected to get the Serie A licence.

Precedents of new entrants acquiring domestic top-flight rights bode poorly for Mediapro, and for the league. The Ligue 1 may live to regret the introduction of a ‘re-sell right’ into its licensing terms.

  • Canal Plus
  • SFR
  • Sky
  • Sky Italia
  • Telefonica
  • Vivendi
Non-UK Media, Non-UK Telecoms, Media, Telecoms, UK Media 5 June 2018
UK mobile market Q1 2018: Primed for revenue acceleration

Service revenue growth for the UK mobile market improved in the first quarter of the year, lifting from 1.0% to 1.2%. There was an easing of the EU roaming regulatory impact helping growth improve, but the SIM-only drag likely grew to counteract this, suggesting a modest underlying improvement overall

We expect continued market growth improvement in the coming year due to a number of tailwinds, namely annual price rises, the arrival of IFRS 15, and the EU roaming impact dropping out

The fundamentals of the market remain solid: competition is rational; pricing is firm; data demand is strongly rising; supply is partially constrained; MVNOs and convergence do not appear a threat

  • EE
  • Hutchison 3G
  • O2
  • Vodafone
Media, Telecoms 7 June 2018
European mobile in Q1 2018: North–South divide to exacerbate

European mobile service revenue growth was down slightly to 0.3% in Q1, with improving trends in all countries other than France, which was down sharply due to the closure of the VAT loophole and intensifying competition

Iliad's launch in Italy was somewhat muted but its focus on straightforward tariffs is likely to hold considerable appeal there, with hidden charges there commonplace and being investigated by the antitrust authority

We expect greater polarisation between the North and South as the year progresses, the key question marks being Vodafone's strategy in Germany, Iliad's traction in Italy, and whether Iliad's revamp in France will lessen or worsen mobile competition there​

  • BT
  • EE
  • France Telecom
  • Hutchison 3G
  • Iliad
  • O2
  • Orange
  • SFR
  • T-Mobile
  • Telecom Italia
  • Telefonica
  • Vimplecom
Non-UK Telecoms, Mobile, Telecoms, Vodafone 8 June 2018
Disruption in Premier League football? 2018 auction finally over

The latest auction of live Premier League broadcast rights commencing in 2019/20 has concluded at last, with three different winners for the first time

The total sum has not been confirmed, but it looks to be down c. 10% from the previous auction at £1.55 billion per season—still substantial, and not far off the BBC’s entire TV content budget

As we predicted, Sky and BT remain dominant, winning 180 of the 200 games per season, whilst new entrant Amazon picked up one of the leftover packages at what looks to be a very low price

  • Amazon
  • BT
  • Sky
Media, TV, UK Media 8 June 2018
BBC iPlayer Boxsets: performance and what it tells us about on-demand viewing

The BBC is concerned with the performance of the iPlayer, handicapped by its inability to monetise its content. Nevertheless, as it moves towards an all-IP future, it is experimenting with new content strategies

Data from Digital-i shows that the iPlayer's Christmas Boxsets brought 360,000 unique viewers/week to the BBC portfolio; an audience which skewed encouragingly young

Furthermore, case studies of two of the programmes made available over this period—Peaky Blinders ​and ​Hard Sun—provide insight into how people consume content delivered this way, something that has been difficult to ascertain due to the major SVODs' secretive treatment of their own data

  • BBC
Media, Telecoms 11 June 2018
UK broadband, telephony and pay TV trends Q1 2018: Diverging strategies

UK residential communications market revenue growth strengthened in Q1, but this was entirely driven by an overlapping price increase from BT, and the decline in market volume growth continues

Continued pressure on both subscriber volume growth and ARPU has led to diverging strategies, with most operators focused on sustaining ARPU, but TalkTalk chasing volumes at the low end, with the former approach currently proving more successful

Looking forward, the benefit of BT’s price rise will fall away completely next quarter and market revenue growth will likely resume its downward trend, but the nadir may be within sight if the flight to quality persists at most operators

  • BT
  • EE
  • Liberty Global
  • Sky
  • TalkTalk
  • Virgin Media
Fixed Line, Media, Telecoms 12 June 2018
Advertising after the turning point: when offline is the exception

Online advertising became the majority of all UK ad spend last year, in step with China but ahead of all other major markets. 

Direct response has further increased its share to 54% of UK ad spend, fuelled by the self-serve platforms of Google, Facebook and Amazon, while content media nets just 11% of the online advertising pot.

We estimate that all online-delivered channels - including "pure play" online properties, broadcaster VOD, digital out-of-home and online radio - could account for well over 60% of UK ad spend by 2020, but only with improved commitment to industry governance. 

  • Amazon
  • Facebook
  • Google
  • Sky
  • Spotify
Internet, Media, Mobile, Non UK Media, Technology, TV, UK Media 14 June 2018
Sky finally renews Serie A rights until 2021

Italy’s top football league awarded Sky the broadcasting rights to seven games per week from August 2018 until May 2021 for €780 million per year, up €208 million. UK-based Perform will carry three games for €193 million. Mediaset exits the market, freeing Sky from price competition

Besides Serie A, Sky added Mediaset’s Hollywood series and films to its content line up in May and will include the Champions League from August. We expect costs to rise by up to €500 million per year, which could be recouped by cuts in content and by recruiting Mediaset subscribers, notably on Sky’s new DTT feed

The best model for Perform would be to wholesale its new DAZN service to Sky, but even if a deal is found we doubt it could break even within the rights cycle

  • Sky
  • Sky Italia
Media, Telecoms 19 June 2018
The home screen: distribution, discovery and data on connected TVs

The TV, the main screen in the house, is rapidly becoming connected to the internet, opening a new front in the battle for people's attention

Tech players, pay-TV operators, and manufacturers are all aiming to control the user interface, ad delivery and data collection, leaving incumbent broadcaster interests less well represented

To protect their position, and the principles of public service broadcasting, broadcasters will have to work with each other at home and in Europe to leverage their content and social importance

  • Amazon
  • Apple
  • BBC
  • Channel 4
  • Facebook
  • Freeview
  • Google
  • ITV
  • Netflix
  • Samsung
  • YouTube
Media, Telecoms 25 June 2018
Is CRR still critical to protect advertisers from ITV?

The workings of the TV advertising market are a mystery to most. Overlaying an arcane ‘share of broadcast spend’ trading mechanism is regulation in the form of CRR, which has prevented anti-competitive activity by ITV since 2003

CRR will protect advertisers ‘for as long as needed’. Most advertisers we canvassed believe it should stay in place, but the sell-side and auditors say CRR has passed its ‘Best before’ date and is heading towards its ‘Use by’ date

We propose a review of CRR by the Competition and Markets Authority (CMA) to determine whether it is now helping or hindering the TV advertising ecosystem to become fit-for-purpose for the digital age

  • Channel 4
  • ITV
  • Sky
Media, Telecoms 27 June 2018
Virtual Reality in 2018: Ready Player None?

Yet another annual hype cycle in 2018 can’t hide a tepid consumer appetite for all VR platforms and heavy weather for the industry as a whole

The launch of Oculus GO, a standalone device at an attractive price, is a milestone for VR; nevertheless, even Facebook remains worried about reach and the state of the industry

Mobile AR is still a strategic focus for Google and Apple, producing diverse applications instead of just games, but new headsets from Microsoft and Magic Leap which promise advanced MR experiences have no launch dates

  • Apple
  • Facebook
  • Google
  • HTC
  • Samsung
Internet, Media, Technology, Telecoms, TV 3 July 2018
Europe's Creative Hubs Update 2018

This third edition of Europe's Creative Hubs, produced on behalf of Bertelsmann, highlights the challenges of the digital age for enterprises of the creative industries of France, Germany and the UK from new consumer behaviours and the advent of new competitors and new forms of competition for users and customers from tech giants, Amazon, Facebook, Google and Netflix. The report calls upon policymakers in Europe to ensure a level playing field for traditional media in the key areas of taxation, competition law, privacy and data protection, highlighting the interaction of these three in the market for online advertising.
 

​Some key takeaways from the report:

  • The creative industries are of key social and economic importance.  Enterprises of the sector produce, publish and distribute news, magazines and books, music and audio-visual works, games, and the sector includes agencies providing advertising and marketing services. The creative industries in France, Germany and the UK generated a combined total GVA of €161 billion in 2015, the last year of available data. This value was created by the activity of 453,000 "employer" enterprises and their staff of 2.2 million, and excludes the activity of freelancers and micro-enterprises, a characteristic feature of the sector 
  • The UK is the top creative hub in Europe, with an estimated €1,164 in GVA per head in 2015, compared to €641 and €501 per head in Germany and France respectively. Reasons include the UK’s earlier recovery from the 2008-09 recession, relatively high domestic consumer expenditure on recreational and cultural services, and the strength of exports of English-language AV and advertising products.  This relatively robust performance in the UK highlights the risks of Brexit to the creative industries from the possible loss of regulated market access for AV products and the possible end of free movement of talent and service providers
  • France, Germany and the UK share many common trends since 2010. The most important is that online display advertising is insufficiently productive to fund professionally produced news, threatening the sustainability of journalism, the bedrock of democracy. Publishers cannot rival the data-rich advertising propositions of each of Facebook and Google, and regulatory change further threatens to skew the playing field
  • Bertelsmann
Media, Telecoms, TV 5 July 2018
TV platform forecasts to 2022: stability rules

Despite significant changes in people’s video viewing habits over the last few years, the TV platform landscape has appeared to reach an equilibrium

We expect pay-TV to retain its utility status for most existing customers. At the margins, movement from Sky and Virgin Media to free-to-air or pay-lite services will be mitigated by population growth

The excitable growth phases for Netflix and Amazon are likely to be over, but they have carved out prominent positions in the market. Meanwhile, the uncomplicated allure of free TV remains strong for half the UK

  • Amazon
  • BBC
  • BT
  • Freesat
  • Freeview
  • Netflix
  • Sky
  • TalkTalk
  • Virgin Media
Media, TV, UK Media 10 July 2018

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