Google Fiber. Pre-Launch Survey. August SmithGeiger LLC

Transcription

1 Google Fiber Pre-Launch Survey August 2012

2 The Research Objectives: o o o o o Establish a baseline of media consumption and piracy levels in KC prior to the launch of Google Fiber, including Awareness and interest in both Google Fiber and Google TV Projected changes in behavior if Google Fiber is adopted In the post wave, we will assess any changes in consumption and piracy levels after Google Fiber is in homes Note: the post wave will be conducted next year, a few months after Google Fiber launches Details: o o o o SmithGeiger completed comprehensive online interviews with 2,159 Kansas City residents and 1,205 St. Louis residents for a total of 3,364 respondents. Respondents were ages 13-54, residents of the Kansas City and St. Louis markets Demographics were managed to be representative of each market. The average interview required approximately 18 minutes to complete. o Interviews were conducted in late June and early July,

3 Key Findings St. Louis worked well as a control market for Kansas City, with most responses a mirror image between the two markets o Similar levels of piracy, attitudes toward piracy, and interest in the concept of Google Fiber Not surprisingly, Kansas City residents are much more familiar with Google Fiber than St. Louis (28% vs. 8%). o Much of the awareness in KC has been driven by press / PR Overall, interest is strong in both markets once they know the concept o 57% can t wait in KC, 52% in St. Louis o Interest is even higher among males and current movie pirates Appears there will be some shifts in HE activity after Google Fiber: o 32% in KC expect to do more illegal downloading or streaming o 39% in KC would use paid streaming subscription services more o 34% in KC would purchase/rent more online o 34% in KC would rent fewer discs, 29% would buy fewer 3

4 Key Findings Overall movie piracy levels are at 31% in both markets with variations by age group: In Kansas City, for example, we see: o o o o o Ages % movie pirates Ages % movie pirates Ages % movie pirates Ages % movie pirates Ages % movie pirates 4

5 A look at KC and St. Louis Consumers

6 Demos nearly identical across markets Demographics Demographics Kansas City St. Louis % Female 51% 50% Average Age % White 77% 76% Average Length of Residence Average Years of Education % Employed Full-Time 54% 48% Average Household Income $68,343 $63,813 % Married 43% 41% % With Children in Home 48% 48% 6

7 Tech adoption also very similar ter that does not play Blu-ray discs High Definition television (HDTV) table audio- player (including ipod) Nintendo Wii ital video recorder (DVR) or a TiVo DVD or Blu-ray recorder Xbox 360 Portable videogame system d, Samsung Galaxy, or other tablet Wireless enabled e-book reader Tech Usage 76% Standalone Blu-ray player (non-ps3) Video on Demand programming 66% from a cable company (VOD) 56% Video ipod or other portable video player Desktop 46% or laptop computer that plays Blu-ray discs 44% 41% 34% 29% 28% 21% 25% 55% 49% 41% 43% 36% 33% 26% 65% 75% Sony PS3 Internet-enabled TV 3D TV Roku box Kansas City Apple TV St. Louis Slingbox None of these 5% 4% 5% 5% 4% 3% 2% 2% 2% 2% 24% 21% 23% 22% 22% 21% 15% 26% 23% 22% 22% 16% S11: Which of the following do you currently own, use, or subscribe to? 7

8 Some variance in current TV service Digital cable has a firmer foothold in Kansas City than in St. Louis, where DirecTV is notably stronger. TV Service Digital cable AT&T U-verse Regular or analog cable DirecTV Dish Network Verizon FiOS Other None of the above 1% 1% 3% 2% 11% 14% 14% 14% 12% 12% 15% 15% 18% 21% 29% 39% Kansas City St. Louis S15: Which of the following types of television service do you currently receive? 8

9 Media subscriptions similar as well More than 1 in 3 in both markets use Netflix for streaming video, but most still have no regular paid streaming video or music subscription. Monthly Subscription Kansas City St. Louis 53% 55% 36% 35% 15% 13% 7% 8% 5% 6% 5% 4% Netflix streaming subscription Hulu Plus Blockbuster Total Access S12: Which of the following services do you currently have a paid subscription to? 9

10 Internet usage similar across markets St. Louis residents spend just slightly more time than Kansas City online. Hours Spent on the Internet per Day 72% 66% Average Hours Spent on the Internet Kansas City 4.7 St. Louis % 25% Kansas City St. Louis 1% 1% 4% 6% 2% 1% 1% 1% Less than 1 1 to 5 6 to to to 20 More than 20 S18: In a typical day, how many hours would you say you spend on the internet? 10

11 Movie consumption similar across markets DVD and Blu-ray rentals show the highest average usage in both markets. Movie Viewing by Each Method within the Past 12 Months Saw a movie in a theater le/satellite/isp via Video-On-Demand or Pay-Per-View 31% 27% 81% 77% Averages In person Via TV service a rental store or kiosk, such as Blockbuster or RedBox ased a DVD/Blu-ray from a retail store or online retailer /Blu-ray from a mail subscription service such as Netflix ed or been given a burned disc or other storage media Purchased a bootleg DVD/Blu-ray from a street vendor 8% 9% 26% 25% 20% 21% 58% 53% 50% 51% - Indicates pirate items Kansas City St. Louis Via physical disc S21: Approximately how many movies/tv shows have you watched in each of the following within the past 12 months? 11

12 In terms of averages, Kansas Citians are slightly more active viewers of subscription-paid movies (Netflix) on the web. Movie Viewing Subscription viewing a bit higher in KC Via the Internet Within the Past 12 Months id subscription service, such as Netflix Watch Instantly V channel s website or TV service provider s website oading service, such as itunes or Amazon downloads Streamed from streaming websites like MegaVideo download from a digital rental service, such as itunes a digital rental service, such as Amazon Instant Video Downloaded from peer-to-peer downloading services nloaded from downloading websites like MegaUpload - Indicates pirate items 33% 22% 19% 13% 11% 10% 9% 9% 32% 24% 16% 12% 9% 8% 9% 9% Kansas City Averages St. Louis Via internet S21: Approximately how many movies/tv shows have you watched in each of the following within the past 12 months? 12

13 KC slightly higher (on average) for TV shows via VOD and Netflix by mail TV Show Viewing within the Past 12 Months sed a DVD/Blu-ray from a retail store or online retailer /Blu-ray from a mail subscription service such as Netflix ed or been given a burned disc or other storage media a rental store or kiosk, such as Blockbuster or RedBox 9% 10% 6% Purchased a bootleg DVD/Blu-ray from a street vendor 5% - Indicates pirate items Kansas City 19% 15% 9% 9% 20% 13% 10% 8% St. Louis Averages Via TV service Via physical disc S21: Approximately how many movies/tv shows have you watched in each of the following within the past 12 months? 13

14 KC also slightly higher (on average) for TV shows via online subscription Kansas Citians have watched an average of 14 TV episodes on the internet via a monthly paid subscription service over the past year, versus 11 for St. Louis residents. TV Show Viewing Via the Internet Within the Past 12 Months V channel s website or TV service provider s website id subscription service, such as Netflix Watch Instantly oading service, such as itunes or Amazon downloads Streamed from streaming websites like MegaVideo Downloaded from peer-to-peer downloading services nloaded from downloading websites like MegaUpload download from a digital rental service, such as itunes a digital rental service, such as Amazon Instant Video - Indicates pirate items 12% 11% 11% 11% 8% 8% 7% 7% 7% 6% 7% 7% 30% 42% 28% 42% Kansas City St. Louis Averages Via internet S21: Approximately how many movies/tv shows have you watched in each of the following within the past 12 months? 14

15 Total per capita consumption similar across markets, though movies and TV shows slightly higher in KC Kansas City St. Louis Total # of movies consumed annually in each market (per person) Total # of TV shows consumed annually in each market (per person) Total # of video games consumed annually in each market (per person)

16 KC movie spending slightly higher on a per capita basis (though very similar overall) Numbers based on 13-54, online population estimates of 1,056,933 people in KC and 1,402,631 people in St. Louis. Dollar amounts for each type of movie are based on MPAA figures (from IHS Screen Digest): Cinema ticket: $7.50 Disc sales: DVD $13.24 /Blu-ray $24.88 (we used a combined estimate of $17.50) Disc rental: $2.84 VOD (TV): $5.15 Download-to-own: $12.45 VOD (internet): $3.83 Note: Dollar figures do not include Netflix/subscription services Total # of movies consumed annually in each market Kansas City St. Louis Total Dollar Amount $82MM $100MM Total annual movie spending per capita $77.86 $

17 Google Fiber Awareness and Adoption

18 Not surprisingly, KC residents are more aware of Google Fiber Percentage of Respondents Who Have Heard of Google Fiber 8% 28% Yes No Yes No 72% Kansas City St. Louis 92% Q22: Have you ever heard Google Fiber before taking this survey? 18

19 TV, newspaper/magazines, and online articles prime sources of awareness How Have You Heard About Google Fiber? (KC) TV news story Newspaper or magazine story Online article, story, or posting 38% 48% 46% From a friend, relative, coworker, or acquaintance Radio news story 22% 29% Online ad Newspaper or magazine ad Radio ad TV ad Outdoor ad Direct mail, flyer, or newspaper insert Other 12% 9% 5% 5% 3% 3% 4% Based on 28% of respondents that live in Kansas City who are aware of Google Fiber Q23: Where/how have you heard of about Google Fiber? 19

20 Those aware of GoFi are pretty well informed What Have You Heard About Google Fiber? 100 times faster than DSL. Kansas City will be the first to have the service. Consumer costs are comparable to DSL service. Being in KC, people are talking about the jobs it will bring to the area as well as the technology advancements that will be available to the KC area. Coming to Kansas City. Supposed to be a boom for tech companies to come to the area. Possibilities of how it can be used are endless. Very fast, yet affordable. Google fiber is a broadband internet connection. The Google company is a trusted brand, so this seems like a high-quality proposition that would be interesting to try. Kansas City was chosen as a test area. It is a super high speed network that will provide data speeds 100 times faster than current internet service. It will make it possible to utilize more online multimedia services without loss of quality through compression. Google is installing a fiber network in Kansas City, Kansas, and is being assisted by KC Power and Light to extend that network into KCMO as well. The fiber network will have much faster connections than anything currently available, and is said to be on par with or better than other fiber optics providers. I have heard that it will be available with higher download speeds than currently available, but I don't know when or if it will be in my neighborhood or how much it will cost. Based on 28%/8% of respondents that live in Kansas City/St. Louis who are aware of Google Fiber Q24: In your own words, what have you heard about Google Fiber (or what are your friends saying about it)? 20

21 Anticipation is high, even in St. Louis Can t wait climbs to 64% and 57%, respectively, for those with prior awareness Agreement Based On What You Know About Google Fiber (1 of 2) I can t wait for it to be available in my area a TV channel s website or TV service provider s website re movies/tv shows through a paid subscription service oogle Fiber service, I would upload/share more content e Fiber service, I would rent fewer DVDs or Blu-ray discs 57% 52% 50% 49% 39% 36% 38% 36% 34% 35% Kansas City Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 21

22 A third say they ll pirate more but a third also say they ll buy/rent more online Among movie pirates in KC, 47% say they ll pirate more, though this drops to 26% among non-movie pirates more on the financial implications of this in a bit. Agreement Based On What You Know About Google Fiber (2 of 2) more movies/tv shows over the Internet using websites seems fast enough, without having Google Fiber service vies/tv shows from Torrent sites, or free streaming sites e Fiber service, I would buy fewer DVDs or Blu-ray discs 34% 33% 33% 36% 32% 35% 29% 28% Kansas City Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 22

23 Of those saying they would pirate more more than half are currently non-pirates One indication of the potential rise in the sheer number of pirates in the market after the introduction of Google Fiber Would Pirate More (download/stream) 32% 15% Movie or TV Pirate 17% Not a movie or TV Pirate Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 23

24 Google Fiber likely to bring more sharers into the market too More than half of those who would upload/share more are currently non-pirates (note: this could be either legal or illegal sharing). Would Upload More Content 38% 16% Movie or TV Pirate 22% Not a movie or TV Pirate Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 24

25 60% of monthly streaming (Netflix) users say they would do more streaming with GoFi Along with 28% of non-monthly subscription users Agreement Based On What You Know About Google Fiber by Streaming Subscription Users and non-streaming Subscription Users I can t wait for it to be available in my area /TV shows on the Internet from a TV channel s website or TV service provider s website ber service, I would stream more movies/tv shows through a paid subscription service If I had the Google Fiber service, I would upload/share more content. If I had the Google Fiber service, I would rent fewer DVDs or Blu-ray discs rvice, I would purchase or rent more movies/tv shows over the Internet using websites My current Internet seems fast enough, without having Google Fiber service ld do more downloading/streaming of free movies/tv shows from Torrent sites, or sites If I had the Google Fiber service, I would buy fewer DVDs or Blu-ray discs Monthly Streaming Subscription Users 70% 50% 63% 43% 60% 28% 48% 33% 44% 28% 44% 28% 36% 31% 38% 29% 38% 24% Monthly Streaming Subscription Non-Users Percentage shown reflects Kansas City s market population Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 25

26 Looked at another way both current subscription streamers and non-users are likely to stream more Nearly equal numbers of the 39% who will use monthly streaming services more with GoFi come from current users and non-users of these services Would Stream More Through Paid Subscription 39% 21% Users of monthly streaming services for movies or TV 18% Non-users of monthly streaming services for movies or TV Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 26

27 For current EST/iVOD users, 55% would purchase or rent more online Along with 26% of non-est/ivod users Agreement Based On What You Know About Google Fiber by EST/iVOD Users and non EST/iVOD Users EST/iVOD Users Non EST/iVOD Users Percentage shown reflects Kansas City s market population Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 27

28 Looked at another way more than half of those who would do more EST/iVOD with GoFi aren t doing it today Would Purchase or Rent More 34% 15% Users of EST/iVOD 19% Non-users of EST/iVOD Q25: How much do you agree or disagree with each of the following statement about Google Fiber? 28

29 Likely adoption relatively high Even higher among younger men, rising to 56%-57% among men Among movie pirates in KC, likely adoption rises to 53%; among non-movie pirates, it falls to 39%. Likelihood of Subscribing When Google Fiber is Available in Your Area 42% 44% Kansas City 28% 25% St. Louis 15% 14% 10% 12% 4% 6% Definitely will Probably will Might or might not Probably won t Definitely won t Q26: How likely are you to subscribe to Google Fiber Internet service when it becomes available in your area? 29

30 Desire for a better internet driving likely adoption Along with curiosity, trust, and ease of downloading/streaming For movie pirates in KC, ease of downloading/streaming actually falls a bit, to 68%; among non-movie pirates, it rises to 73%. Reasons for Subscribing to Google Fiber It will make using the Internet easier/faster overall 85% 85% I just want to try it out 77% 72% I trust the Google brand name 74% 76% be easier for me to download/stream content online 71% 78% It will be easier for me to upload content 61% 64% rice will be cheaper than my current Internet service 51% 51% m unhappy with my current Internet service provider 40% 42% Kansas City Based on 43%/38% of respondents that live in Kansas City/St. Louis who are likely to subscribe to Google Fiber Q27: How much of a reason is each of the following for why you are likely to subscribe to Google Fiber service when it becomes available? 30

31 Likely adoption of GoFi TV service lower than GoFi internet Likely adoption here is 33% in KC, vs. 43% for the internet service Men are again higher here, at 40-42% Likelihood of Subscribing to Google Fiber with Subscription TV Service 50% 49% Kansas City St. Louis 23% 22% 10% 11% 11% 11% 5% 8% Definitely will Probably will Might or might not Probably won t Definitely won t Q27_1: How likely are you to subscribe to the Google Fiber TV service when it becomes available in your area? 31

32 Piracy Estimates and the Potential Impact of GoFi

33 Piracy numbers are very similar across the two markets Pirates here are defined as anyone engaging in pirate activity in the past year Pirate Type All Movie Pirates 31% 31% Kansas City St. Louis All TV Pirates All Game Pirates 19% 20% 13% 14% All Pirates 37% 38% All Non-Pirates 63% 62% 33

34 Estimating pirate movie volume Using a method similar to the 2011 MPAA study, we are able to estimate what the national cannibalized volume for movies would look like in the US if KC piracy levels are projected to the entire nation. Our basic formula is as follows: online population in the US (estimated at 133.5MM) X % consuming movies through each pirate method X Activity rate (the mean volume of movies consume in the past 12 months by each pirate method) 34

35 Estimating pirate movie volume By using this formula, we arrive at the following estimates for total number of movies pirated per year in the US (in millions of movies): MM MM MM 17270%16040%13460%7470% 5760% MM MM Total 600MM 35

36 Estimating revenue losses due to movie piracy 34% of all movie pirate activity in KC is sampling (those who later paid for the same movie) which is not counted as lost revenue. If the pirated version weren t available, the person may have waited for a free option which is not counted as lost revenue. This is 28% of all movie pirates in KC. If the pirated version weren t available, the person may have paid to see the movie in some form this is the overall cannibalization rate (38% in KC). 36

37 Estimating revenue losses due to movie piracy Using the overall cannibalization rate and the piracy volumes, we then layer in how respondents might have paid for the movies if they hadn t pirated them (applying a downweight of.65, since we know that not all would actually have followed through with paying). This allows us to estimate overall annual revenue losses due to movie piracy. (Again using KC results to project to the country as a whole.) 37

38 Estimating revenue losses due to movie piracy This method gives us the following estimates for annual national revenue losses due to movie piracy (in millions of dollars). (Note, we again use the IHS screen digest price estimates for cinema tickets, disc rentals, etc.): MM MM MM MM MM 94900%23600%17100%15000%12800%10800% MM Total $1,742MM 38

39 Estimating potential increases in piracy loss due to Google Fiber Earlier, we saw that 26% of non-movie pirates in KC are likely to pirate once they get Google Fiber So if this 26% actually does start to pirate, this means an additional 18% of total consumers become pirates. If this 18% act like current pirates, then this means we would add another $1,011 million in movie piracy, bringing the annual total to $2,753 million. If even half of these non-pirates (who say they will start pirating with Google Fiber) actually do start to pirate, an additional 9% of total consumers become pirates, adding $506 million in movie piracy bringing the annual total to $2,248 million. 39

40 Piracy vs. Legitimate Purchases

41 Among sites used to download/stream, legit sites top the list, though 7% report using Megavideo Among movie pirates in KC, use of Megavideo doubles, to 14% Top 20 Sites Downloaded or Streamed From YouTube Netflix.com ABC.com Hulu.com / Hulu Plus CBS.com itunes NBC.com Amazon.com/Amazon Instant Video fox.com Xbox Live - Indicates pirate items 26% 23% 22% 18% 17% 13% 37% 35% 23% 22% 52% 55% 47% 35% 23% 19% 15% 14% 47% 38% comedycentral.com HBOgo.com MTV.com Megavideo PlayStation Network BitTorrent.com U-Verse Online (AT&T) Blockbuster on Demand Vudu utorrent 11% 8% 8% 7% 7% 6% 5% 5% 4% 4% 13% 11% 6% 7% 6% 7% 6% 5% 3% 4% Kansas City Based on 65%/65% of respondents that live in Kansas City/St. Louis who are downloaders and/or streamers Q30: Through which of the following online sites or services have you streamed or downloaded movies or TV shows within the past 12 months? 41

42 A look at the top pirate sites Again, these numbers roughly double among movie pirates Top 20 Pirate Streaming or Download Sites Megavideo BitTorrent.com utorrent The Pirate Bay LimeWire Putlocker Megaupload 4shared.com watchonlinefree.tv FrostWire.com 2% 2% 3% 3% 3% 2% 4% 4% 4% 4% 3% 4% 4% 6% 5% 5% 5% 7% 7% 7% LetMeWatchThis novamov.com rapidshare.com CinemaNow Demonoid.com mediafire.com Movie2K sidereel.com Blinkx KickAssTorrents 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 3% 3% Kansas City Based on 65%/65% of respondents that live in Kansas City/St. Louis who are downloaders and/or streamers Q30: Through which of the following online sites or services have you streamed or downloaded movies or TV shows within the past 12 months? 42

43 Most are using YouTube for free content; both pirated and legit video streaming is a mix of HD and SD YouTube Streaming or Downloading 95% 96% Average Percentage of Streaming Legitimate Video in HD or SD Kansas City St. Louis 50% 46% 50% 54% 33% 31% 10% downloaded movies/tv shows from YouTube for free 8% Based on 34%/36% of respondents that live in Kansas City/St. Louis who have used YouTube to stream/download in the past 12 months Q30_1: Which of the following have you done in the past 12 months on YouTube? Average Percentage of Streaming Pirated Video in HD or SD 48% 47% 52% 52% HD SD Not Sure Based on 63%/62% of respondents that live in Kansas City/St. Louis who are legitimate downloaders/streamers Q30_2: What percentage of your downloads are in high definition (HD) vs. standard definition (SD)? 38% 34% HD SD Not Sure Based on 20%/21% of respondents that live in Kansas City/St. Louis who are pirate downloaders/streamers Q30_3: What percentage of your pirated downloads are in high definition (HD) vs. standard definition (SD)? 43

44 On average, respondents believe that a quarter of people are pirates Among movie pirates in KC, this rises slightly to 28%; among non-movie pirates, it falls a touch, to 23%. Movie Viewing Habit for People Average Percentage 34% 33% 31% 34% Kansas City St. Louis 25% 24% 25% 25% o regularly see movies in the theater on opening weekend People who regularly watch unofficial versions of movies or Q35: Thinking of people in general, and using your best guess, what percentage of people would you say do each of the following things? 44

45 More than a third say they know someone who pirates Just a bit higher than the actual pirate activity they reported overall (31% in each market) Do You Personally Know Anyone who Ever Does Each of the Following? 65% 68% 60% 68% Kansas City St. Louis 37% 39% 45% 43% atch unofficial versions of movies or TV shows Watch movies on pay-per-view or video-on-demand on TV Q36: Do you personally know anyone who ever does each of the following? 45

46 For pirates, free is a key driver Reasons for Watching Unofficial Copies of Movies or TV Shows (1 of 2) It s free Retail prices for movies/tv shows are too high There are no commercials or ads to get in the way It s easy / convenient There are a wide selection of movies/tv shows available heck out movies/tv shows for free before I spend money on them I spend enough money on movies/tv shows already Because I can I wouldn t bother to watch them at all if they weren t free I can watch at the same time (or before) the official release 38% 36% 33% 31% 29% 27% 26% 27% 25% 24% 29% 24% 27% 44% 40% 38% 42% 37% 34% 34% Kansas City Based on 37%/38% of respondents that live in Kansas City/St. Louis who have pirated Q37: How much of a reason is each of the following for why you watch unofficial copies of movies or TV shows? 46

47 Roughly a quarter of pirates cite speed as a reason for pirating Another indication that pirating becomes more attractive with GoFi Reasons for Watching Unofficial Copies of Movies or TV Shows (2 of 2) My Internet connection is so fast that it makes it very easy The quality of video/sound is good enough I don t see anything wrong with it / it doesn t hurt anyone can copy to any device (no digital rights management restrictions) Actors and movie studios already have enough money Lots of people I know do the same thing I enjoy the challenge of trying to find new titles for free It keeps me ahead of the crowd Nobody ever gets caught doing it 24% 22% 21% 21% 20% 20% 17% 14% 16% 15% 29% 25% 22% 20% 16% 14% 23% 24% Kansas City Based on 37%/38% of respondents that live in Kansas City/St. Louis who have pirated Q37: How much of a reason is each of the following for why you watch unofficial copies of movies or TV shows? 47

48 For those watching both pirate and official versions, it s about quality Price matters, but so does collectability, and the desire to support good content es easier to pay and know that I m getting a version that will work I like to support movies and TV shows that are really good ersion for things where the picture quality is really important to me e official version if it goes on sale / if I can get a discounted price er have the official version to keep as part of my home collection rth paying for the official version of my favorite movies/tv shows etimes easier to pay and know that I m getting the official version es I can t find what I m looking for so I pay for the official version Reasons for Watching Official Copies of Movies or TV Shows 37% 36% 46% 57% 55% 56% 56% 56% 56% 55% 50% 54% 56% 52% 51% 49% Kansas City Based on 36%/38% of respondents that live in Kansas City/St. Louis who watch both pirated and legitimate content Q38: How much of a reason is each of the following for why you also watch some official copies of movies/tv shows? 48

49 One bright spot: most see pirating as wrong Even 48% of movie pirates in KC agree that it s wrong but this jumps to 62% among nonmovie pirates Agree with Statements about Watching Unofficial Copies of Movies / TV Shows eam unofficial copies of movies/tv shows without paying for them Not paying for movies/tv shows is the same as stealing Copying a friend s DVD is the same as stealing nty of money without people paying for every single thing they watch All movies/tv shows should be free online Uploading movies/tv shows takes too long to download the unofficial copy of a movie/tv show takes too long to download the unofficial copy of a movie/tv show is too difficult sion of a movie/tv show if I could get the unofficial version for free suming unofficial copies of movies/tv shows doesn t hurt anyone Q39: How much do you agree or disagree with each of the following statements about people watching unofficial copies of movies/tv shows? 24% 22% 19% 16% 36% 36% 32% 25% 23% 18% 17% 37% 35% 33% 50% 47% 58% 57% 57% 55% Kansas City St. Louis 49

50 Thank you!

51 Appendix

52 More on Piracy

53 Action movies and comedies are most likely to be pirated Note: these %s are based to the number of films pirated in each market; e.g., of all the films pirated in KC, 19% were action movies Pirated Movie Genre Action Comedy Drama Sci-fi and fantasy Adventure Horror Children s movies Family (animated) Mystery/thriller Romantic comedy Family (live action) Musicals Foreign 0% Independent 0% Anime (Japanese animation) Documentary Inspiration/religious 0% Concert films 0% 0% Other Based on the number of Piracy Occasions Q32_1: What type of movie is this? 5% 5% 4% 4% 5% 3% 4% 3% 2% 3% 4% 3% 4% 2% 1% 1% 1% 1% 1% 1% 2% 1% 7% 7% 11% 10% 9% 10% 11% 18% 17% Kansas City St. Louis 19% 21% 53

54 Of all pirated movies, roughly a third are new releases Pirated Movie Release 37% New release An older title 33% New release An older title 63% 67% Kansas City St. Louis Based on the number of Piracy Occasions Q32_2: And was this movie a new release (released in theaters within the 3 months before you watched it), or was it an older title? 54

55 Picture and audio quality nearly identical (and fairly high) Pirated Movie Quality Positive Ratings 65% 60% 61% 70% Kansas City St. Louis Picture Quality Audio Quality Based on the number of Piracy Occasions Q32_3: How would you rate the picture and audio quality of this movie? 55

56 More than half of pirating done after movies leave theaters Pirated Movie First Seen 39% 38% Kansas City St. Louis 22% 24% 14% 18% 21% 18% 3% 2% initially released in theaters in the US After the original DVD/Blu-ray release Based on the number of Piracy Occasions Q33: When did you first see this movie? 56

57 On a third of pirate movie occasions, respondents later paid to see the film Ever Paid to Watch Previously Pirated Movie 12% 9% 34% Yes No Not sure 34% Yes No Not sure 55% 57% Kansas City St. Louis Based on the number of Piracy Occasions Q33_1: Have you also paid to watch this movie? 57

58 For those who never paid to see the film, rental would have been their most likely option Alternative Way of Accessing Movie if Piracy Not Available (for those who didn t ever pay to see the film) Rented the DVD or Blu-ray of the movie Would not have watched Waited until it was on TV Bought the DVD or Blu-ray Borrowed or watched someone else s DVD/Blu-ray/download until it was available through a subscription streaming service wnloading) using a video-on-demand service over the internet Seen the movie in a theater Watched on pay-per-view or video-on-demand on TV id to download it from a website where you can keep it forever 20% 21% 18% 17% 18% 18% 18% 18% 17% 14% 10% 8% 8% 12% 8% 6% 4% 5% 31% Kansas City 35% Based on the number of Piracy Occasions and never saw the official version Q34: Thinking about this movie. If you hadn t been able to do piracy, which of the following would you have likely done? 58

59 General Role of Home Entertainment

60 Most consumers feel they have more options than ever And more than half feel renting/buying movies is a great value for their entertainment dollar. Agree With Statements (1 of 2) I now have more entertainment options than ever before 75% 75% hing movies/tv shows is one of my favorite things to do 68% 70% family really enjoys watching movies/tv shows together 68% 67% I find new technology interesting and engaging 67% 70% ology / product is really going to work out before I buy it 66% 66% ites like Facebook or Twitter to keep up with my friends 64% 61% uying movies is a great value for my entertainment dollar 55% 58% ows available to me for streaming/downloading at home 45% 44% Kansas City Q19: How much do you agree or disagree with each of the following statements about things you do for entertainment and technology? 60

61 A third are confused by all the options for streaming/downloading This confusion rises to 44% among ages Agree With Statements (2 of 2) I now have more entertainment options than I need an easier way of finding movies/tv shows I would like Playing video games is one of my favorite things to do ds usually ask me to give them advice on new products le for streaming or downloading movies and TV shows n among my friends and family to get a new technology e new technology is usually more trouble than it s worth 45% 47% 42% 44% 37% 42% 37% 41% 35% 35% 28% 30% 21% 21% Kansas City Q19: How much do you agree or disagree with each of the following statements about things you do for entertainment and technology? 61

62 Repeat viewing a top reason for consuming physical media Reasons for Purchasing/Watching Physical Media (1 of 2) or my kids) can watch the movie again whenever we like So that I can keep the movie for a long time ies/tv shows I really care about, I d rather have the disc I just like having a physical copy I d rather have a disc so I can easily take it other places I like having discs to add to my collection I like having discs to add to my collection It just seems easier to buy the disc 61% 61% 56% 59% 54% 62% 49% 57% 49% 50% 42% 48% 42% 47% 38% 42% Kansas City Based on 80%/78% of respondents that live in Kansas City/St. Louis who have watched physical media in the past 12 months Q20: How much of a reason is each of the following for why you purchase or watch physical DVDs/Blu-rays/discs instead of downloading or streaming? 62

63 Bonus content and price tend to be secondary reasons for consuming physical media Reasons for Purchasing/Watching Physical Media (2 of 2) Because discs tend to come with bonus content It s sometimes cheaper to buy the disc itles available on disc than on downloading or streaming Downloaded copies don t feel as collectible as a disc to download or buffer a downloaded or streamed movie y downloaded or streamed movies/tv shows on my TV I don t have a very fast Internet connection ing or streaming movies is too complicated/intimidating 17% 18% 17% 19% 16% 17% 36% 39% 34% 35% 33% 31% 32% 35% 30% 31% Kansas City Based on 80%/78% of respondents that live in Kansas City/St. Louis who have watched physical media in the past 12 months Q20: How much of a reason is each of the following for why you purchase or watch physical DVDs/Blu-rays/discs instead of downloading or streaming? 63

64 Internet speed is a key reason for downloading/streaming I have a fast internet connection changes just slightly for movie pirates vs. nonpirates, with pirates 5 points higher (47% vs. 42%). Reasons for Downloading or Streaming Instead of Buying Physical Discs I have a fast Internet connection I like the portability of downloading or streaming g or streaming tends to be cheaper than buying the physical disc It just seems easier than buying the disc I like to be able to watch on my tablet, ipod, or video mp3 player ad or stream when I don t have to take the movie to other places I don t usually care about the bonus content I don t want the clutter of a collection of physical discs ownload or stream for movies/tv shows I really don t care about 44% 48% 43% 43% 43% 43% 37% 38% 36% 35% 35% 35% 29% 31% 28% 23% 25% 28% Based on 65%/65% of respondents that live in Kansas City/St. Louis who have watched digital media in the past 12 months Q21: How much of a reason is each of the following for why you download or stream instead of buying physical discs? Kansas City St. Louis 64

65 UltraViolet

66 UltraViolet usage relatively low in both markets Aware of UltraViolet Kansas City St. Louis 72% 69% 19% 21% 4% 5% 5% 5% Yes I ve heard of it, and I ve used it No, I m not familiar with it Q28: Within the past few months, have you heard of a new digital movie format called UltraViolet (UV)? 66

67 UltraViolet shows positive impact on DVD/Blu-ray purchase Impact of UltraViolet on DVD or Blu-ray Purchases 43% 42% 32% 35% Kansas City St. Louis 13% 13% 7% 5% 4% 5% Much more likely Would not affect likelihood Much less likely Q29: Knowing that a movie you were interested in included an UltraViolet (UV) copy, how might this affect your likelihood to buy it on DVD or Blu-Ray? 67

68 Videogame Consumption

69 St. Louis slightly higher in video game consumption St. Louis sees a higher rate of paid videogame downloads, as well as a slightly higher average retail purchase of videogames. Video Games Purchased or Downloaded within the Past 12 Months me on a disc from a retail store, kiosk, or online retailer sed or been given a bootleg or burned copy of a game 7% 7% 51% % Averages In person/via TV service game on the Internet from a paid downloading service e Internet from a downloading or peer-to-peer website 10% 20% 11% 21% Via internet - Indicates pirate items S21_1: Approximately how many videogames did you get in each of the following ways within the past 12 months? 69

70 Google Fiber Pre-Launch Survey August 2012