Looking at the European Free to Air Broadcasting space over the past 20 years seems like a classic case of the French phrase “the more things change, the more they stay the same”.
Linear TV audiences have declined, and new technologies have taken away both younger audiences and advertising money, while the rise of streaming services have changed fundamentally the way consumers watch video content.
On the other hand, the major players in the European Broadcasting space, at least in the major markets, remain the same.

This week marks the start of the results earnings season from calendar Q1, barely weeks after the Full Year results season ended. Ahead of the reporting season, here are some thoughts on the main topics I expect to come out. When I have written these before, I have usually focused on what I expect for the Media and Tech areas and, while the bulk of this piece will be focused on that, this time I thought it would be worthwhile to throw in some thoughts on the overall direction for companies across the board, as this will provide a better context to the commentary on the Media and Tech side.

The markets have had a choppy start to 2022, given the combination of concerns over inflation, rising interest rates and, in recent weeks, the terrible events in the Ukraine and the after-shock effects. However, the Tech sector has been badly hit. Chinese stocks, in particular Tech names, also look to be heading for the worst weekly performance in a year, with the recent Covid outbreaks and imposed restrictions impacting the markets.

Every year, usually in January (but sometimes in December), we have the annual round of predictions for the upcoming year. It is a seasonal tradition, much discussed and talked about, and in some cases loved. However, it is also a tradition that risks guiding companies towards the wrong decisions, and forecasters to miss light of the bigger trends.

One of the hottest areas for rights acquisitions in 2021 and continuing into 2022 has been the purchase of the music catalogues of artists (Warner Music Group buying David Bowie’s catalogue for an estimated $250m+ last week). It is one that has attracted a range of buyers, from the established music giants such as Universal Music Group (eg Bob Dylan’s catalogue for c. $350m), Sony Music (e.g. Bruce Springsteen for an estimated c. $550m) and Warner, private equity firms such as KKR or specialist groups such as Hipgnosis (e.g. 50% of Neil Young’s catalogue for $150m) – and sometimes a combination of the players, such as BMG and KKR. I have laid out some quick thoughts below as to why, and also whether this will continue.

My only occasion of going to the Cannes Lions festival was in 2019. That was a good year for the show: the weather was glorious, the conference had none of the worries about Covid that were soon to engulf the world and, more to the point, Cannes Lions generated double digit organic revenue growth, bouncing back after what had been a slightly rocky period. However, things have changed since then and the cancellation of the physical event (if not digital) for two years running raises questions over its future direction. My view is that there is a high possibility / probability that the Cannes Lions physical event does not return or, if it does, it may permanently be changed in nature. This is a view I hope is not right but it is worth exploring.

Some thoughts regarding the more hawkish tone on interest rates being taken by Central Banks, what it might mean for the Media and Tech spaces in general and why I do not expect this to lead to a return to significantly higher interest rates.