TV Programming - A Good For The Gen X

Transcription

1 Consumer Choice in a dynami c TV Landscape The Content Distribution & Discovery Revolution Joint study created in collaboration with NATPE and the Consumer Electronics Association (CEA)

2 This document is copyrighted 2015 by the Consumer Electronics Association (CEA ) and NATPE and may not be reproduced, in whole or part, without written permission. Federal copyright law prohibits unauthorized reproduction of this document by any means. Requests to reproduce text, data, charts, figures or other material should be made to CEA or NATPE. CEA Contact Information: Requests should be made to cea@ce.org or by calling or NATPE Contact Information: Requests should be made to marketing@natpe.org with subject line NATPE/CEA Research Request (make sure to include your full name and company).

3 Table of Contents Objective/Methodology 2 Executive Summary 3 Detailed Findings 6 I. Understanding The TV Viewing Landscape 6 II. TV Content Discovery 15 III. Attitudes Toward the Changing Landscape 19 IV. Exploring SVOD Attitudes and Viewing 21 V. Conclusions and Recommendations 27 Index of Figures and Charts Figure 1: Receipt of TV Programming 8 Figure 2: Devices Used to Watch TV Programming 9 Figure 3: Sources of TV Programming Used in Past 6 Months Among SVOD Subscribers 11 Figure 4: First Choice Source of TV Programming 12 Figure 5: Sources of TV Programming Discovery 15 Figure 6: Importance of Sources of TV Programming 17 Figure 7: Perceptions of the Changing Television Landscape Among SVOD Subscribers 20 Figure 8: Attitudes Toward Binge Viewing 22 Figure 9: TV Program Genres Viewed on SVOD 24 Figure 10: Reasons for Watching TV Programming Through SVOD 25 APPENDIX 28!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5 >

4 "#$!%&'($'(!)+(,-.(&'!/!)+0&1$,2!3$1&4.(&'! Objective The objective of this study was to evaluate the TV content distribution landscape, explore the dynamics at play against the background of exploding consumer choices, and determine how consumers find TV content and view it across different platforms. Methodology The report described herein was produced in collaboration with the Consumer Electronics Association (CEA), and the National Association of Television Program Executives (NATPE). The study was administered via an Internet survey to an online national sample of 1,639 U.S adults age 13 to 54 between November 1 st and November 7 th, All respondents report having high speed Internet access, and watch a minimum of 5 hours of television programming each week. The margin of sampling error at 9 confidence for aggregate results is +/- 2.42%. Sampling error is larger for subgroups of the data. As with any survey, sampling error is only one source of possible error. While non-sampling error cannot be accurately calculated, precautionary steps were taken in all phases of the survey design, collection and processing of the data to minimize its influence. Steps were taken to identify and minimize satisficing and respondent inattention to ensure the highest quality data. During the fielding of this study, CEA and NATPE employed the services of E-Poll Market Research to provide panelbased sample. This study was targeted to those with high speed Internet access enough sample of synchronous and asynchronous users of second screen content. As is common practice in survey research, a stratified sample group was pulled to mirror the demographics of the general population. As a result, this data can be generalized to the U.S. population who access program specific content on a second device. Subsample Group Sizes Sample Size Total Respondents 1,639 Male 797 Female year olds year olds year olds 426 SVOD Subscribers 888 SVOD Non-Subscribers 751 SVOD Subscribers Age SVOD Subscribers Age SVOD Subscribers Age Netflix Subscribers 742 Amazon Prime Subscribers 328 Hulu Plus Subscribers 179!!!!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5?

5 56$0.(1$!7.889,2:!"#$%&'(#'($)+(,-.(&'$/$)+0&1#,2$3#1&4.(&'$ The paradigm for TV content discovery has changed dramatically with increased availability and use of TV content streaming options. Viewers who stream content often decrease their live viewing for the convenience streaming offers as well as the opportunity to select from a large catalogue of both new and old programming that is easy to search, and tailor to their tastes. The changes to the TV landscape are most apparent among Millennials, (ages 13-34) who are more likely to have access to, and use subscription video on demand services as well as other streaming sources of TV programming, and don t hesitate to use multiple screens for viewing. Millennials are comfortable with using many different sources of TV program content and consequently are significantly more likely to consume full length TV programs from a streaming source(8 streamed in the last 6 months) than live TV programming at its original air time (5), or recorded content from a DVR (3). Millennials have greater access to SVOD subscription services (68%) compared to about half of total broadband households. Consequently, in the hierarchy of choice, when deciding to watch TV programming, the majority of Millennials first go to Netflix (58%), followed by DVR or live TV (both 46%). Netflix is also the preferred source of TV viewing among the Millennial group. YouTube is also a significant source of streamed full length program viewing among Millennials (36% watched in past 6 months), outpacing other types of streaming options, like network websites, free websites like Hulu and Crackle, and other subscription services among this age group. Millennials value their ability to stream content above cable or broadcast channels. The ability to choose what they want to watch when they want to watch it is of high value to all three generational groupings, but particularly among Millennials. 51% consider subscription to Netflix very valuable, compared to 42% for broadcast channels, and 36% cable subscription. Gen Xers tend to be the heaviest users of their cable/satellite/telco time shifting offerings including VOD and DVR. Among those in this age group who have access to VOD, 76% use their VOD service once a week or more often, similar to SVOD usage. The DVR is primarily used to avoid commercials, while VOD is for convenience. While TV advertising is still an important variable in making people aware of programming, it has far less weight in driving viewers than in the past because the increased in the depth and breadth of content available to them. As a result, word of mouth has emerged as one of the more relied upon sources of information about which programs to watch, driven by SVOD subscribers in the Millennial and Gen X demographic groups. Boomers are still more likely to allow TV advertising, channel surfing, and loyalty to specific networks to inform their viewing choices. Millennials are heavily influenced by a broader variety of media including online advertising and social media which also rank high as a source of information among this group, given the increase in time spent viewing content online. Millennials also enjoy sampling programming, and previews drive awareness and an opportunity convert samplers to viewing. The largest percentage of viewers still say they became aware of the TV shows they currently watch from TV advertising, though this declines significantly by generational group (68% for Boomers, 59% for Gen X, and 47% for Millennials). TV advertising is effective at increasing awareness of new programming, though word of mouth is of greater importance in driving the viewing decision, particularly among Millennials (77% very/somewhat important ) and Gen Xers!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5 /

6 (79%). Millennials often reference seeing advertising and then hearing friends discussing, or family recommendations. The older demographic (50 to 64) still primarily resorts to traditional, more passive ways of learning about new programming, including TV ads, watching because it s on a network they already watch, or channel surfing. Nevertheless, in terms of importance in the viewing decision, recommendations are considered important by 72% of Boomers. About one quarter of Millennials say they learned about the shows they watch through social media () and about two in ten find out through online advertising () or the recommended for you feature from their streaming service (18%). Millennials enjoy sampling services and programs, often learning about new programming through previews SVOD subscribers present unique opportunities and challenges to marketers trying to break through the clutter, and to content creators charged with driving loyalty among their viewers. About half of SVOD subscribers say they have found new programming through their streaming service that they then went on to watch live or on DVR. The ability to binge view programs and catch up on episodes of programs can fuel greater loyalty to programs and keep viewers watching in the future. Among Millennials, however, there is a clear preference for streamed programming that allows them the ability to choose and watch anywhere. The availability of SVOD makes them more likely to shift viewing from live television to streaming, where they have greater control of when, where and how they watch, and more tools to navigate their viewing experience such as the recommended for you feature offered by SVOD s in deciding what to watch. Among Millennials, the recommended for you feature from their SVOD service stands out as an important source of new program information (52% very/somewhat important ), particularly since Netflix is the first place the majority of this demographic goes when interested in watching TV programming. Many Millennials say the recommended for you feature leads them to enjoyable programs they never would have otherwise watched. This feature is significantly less important to Gen Xers and Boomers. The SVOD menu is also a critical tool in helping viewers discover new programming and will likely only increase in importance along with usage. While Boomers channel surf on TV for new programming to watch, Millennials are more likely to be browsing the menu in Netflix looking for new shows that are available through that service. In general, SVOD users are more likely to be very satisfied, (66%) with their service ease of use than with other sources of programming including apps, VOD, network sites, free websites and even live TV. SVOD can be used to supplement live viewing in number of ways, by allowing viewers to stay current with programs they ve missed (72% agree), and find new programming that they then go on to watch live on TV (48%). The ability to binge view can also increase loyalty to specific programs as about half (49%) of those who say they binge watch 3 or more episodes agree that the ability to do so makes them more likely to continue watching the series. This sentiment is strongest among Millennials (56%). A majority of SVOD subscribers say they typically binge watch 3 or more episodes of TV shows they watch through their streaming service (52%). Although the availability of streamed programming may have increased viewing overall, this may ultimately translate to less live television viewing, particularly among Millennials, among whom 58% agree that they currently watch fewer shows on live TV at the time they air because of the availability of more shows through streaming service. This is significantly lower among SVOD subscribers in the Gen X group (47%), and Boomers (4), who generally prefer watching live

7 Increased multiscreen viewing of TV programming is also a central factor in reaching younger target audiences. While the television set is still the most commonly used device for watching TV programs, among the Millennial group there are some distinct differences in their use and preference for multiple screens. About half of Millennials say they watch TV programming on a laptop, and for nearly 2 in 10, it s their preferred TV viewing screen (19%). Another 3 in 10 watch television on a tablet, (28%) and 22% on a Smartphone. Portability and the ability to watch anywhere is a key benefit in their use of multiple screens as well as more of a comfort level with smaller screen sizes in comparison with older generations. While 9 in 10 viewers say they watch TV programming on a television set, Millennials are significantly less likely to do so (8). In terms of preference, only 5 select a television set as the preferred screen for viewing television content. In part, the preference for laptops is driven by college age Millennials (18 to 24), among whom 29% prefer a laptop to other devices for watching TV. Over 6 in 10 in this age group (6) say they watch full length TV shows using this device. Some think of it as a portable television they can easily move and it allows them to sit and watch while multitasking on other devices like their smartphone or tablet at the same time. Subscribers to SVOD services are also most likely to say they access SVOD TV programming through a laptop 4, followed by a television (39%), a tablet (38%) and a videogame console (3). Nearly 3 in 10 say they view SVOD programming through a Smartphone (28%). Smartphone viewing is driven by teens who use it because they can watch wherever they are and because it s always with them and easy to carry.!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5 A

8 Detailed Findings I. UNDERSTANDING THE TV VIEWING LANDSCAPE Viewer Profile TV Streamers are defined in this study as TV viewers who have streamed one or more full length television programs through an SVOD service (Netflix, Amazon Prime or Hulu Plus), on an app, on a network or other website, or through a free service like Crackle or Hulu within the past 6 months. The majority of TV viewers say they are TV streamers (71%). A little over half of TV streamers are Millennials, with 52% falling into the 13 to 34 age group. About 3 in 10 Gen Xers (age 35-49) say they stream full length TV programs. Boomers (50 to 64 year olds) are least likely to be TV streamers at 19%. As a result of the younger skew, streamers are more likely to be single, have no children in the household and be ethnically more diverse than those who haven t streamed programming. The majority of TV Streamers have a subscription to Netflix, Amazon Prime or Hulu Plus (70%), compared with only 1 of Non- Streamers. Among this 1 of Non-Streamers, they are subscribers to Netflix and/or Amazon Prime. Among total TV viewers, 5 say they subscribe to one of the three subscription VOD services (Netflix, Amazon Prime or Hulu Plus). Again, subscribers skew Millennial in age (5 of total subscribers), with 28% in Gen X and 17% Boomers. Approximately 1 of the total have either never had a cable, satellite or Telco subscription or have cancelled their subscription to one of these services. This group has the lowest median income and is most likely to be in the 18 to 29 age group (4). Two thirds (66%) say they have a subscription to Netflix, Amazon Prime or Hulu Plus, likely as an alternative to a traditional TV service subscription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

9 W&.+$#&4?!Y'0&8$! "#$%&! Y'0&8$!.'?$,!ZJO[OOO!,>C,,C,>C.BC K\C! >>C Y'0&8$!ZJO[OOO!(&!].+(!.'?$,!ZDO[OOO!,,C,,C,?C,>C,,C,?C Y'0&8$!ZAD[OOO!(&!].+(!.'?$,!ZBOO[OOO!.,C.,C.>C.>C..C.-C Y'0&8$!&1$,!ZBOO[OOO!./C BPC!.,C <("'0(2! BAC!.,C./C.AC.>C W+X9'0!&,!T9('&!./C BPC!.,C AC! >C \C!?C..C >(#$,!,C,C,C.C JC!,C 7;>)!7.-+0,-$,+ /?C A-C./C.--C -C Television Services by Generational Groups Digital cable is the service most commonly used across all generational groups. Nevertheless, Millennials are the group least likely to subscribe to digital cable (31%) or satellite service (21%) and most likely to either have lower cost basic cable (19%) or have no wired service (21%). The Gen X demo is most likely to have digital cable (4) and boomers are significantly more apt to have satellite service than the other generational groups (29%). About of TV households say they have a telco service, consistently across the generational groupings. In terms of subscription streaming services, about half of total TV viewers say they subscribe to Netflix, Amazon Prime or Hulu Plus (5). This is driven by the younger generational groups, with Millennials reporting the highest subscription rate at 68%, Generation X at 51% and Boomers with the lowest proportion of subscribers at 3. Netflix commands the highest subscription rate across the three services, with 4 of total TV viewers saying they have this service. Among Millennials, nearly 6 in 10 (59%) say they have subscriptions to Netflix, compared to 42% of Gen Xers and 26% of Boomers. There is less of a difference in the subscription rate to Amazon Prime and Hulu Plus, although Millennials are also more likely than the other two generational groups to subscribe to these services. Cord Cutters and Cord Nevers, (those who either cancelled, or never had a subscription to cable, satellite or telco) are more likely to subscribe to SVOD, with 66% saying they have a subscription to Netflix, Hulu Plus or Amazon Prime. Cord Cutters are more likely to be subscribers to one or more of the subscription streaming services (79%) compared to those who are Cord Nevers (61%), indicating cord cutters may have replaced their traditional TV service with streaming. Those who cancelled their TV service typically mentioned expense as the reason as well as an ability to get content through streaming: Expensive and most everything I want to watch is available online. Too expensive, paying for channels I don't watch, don't like being limited by specific air times. Internet is just as easy to watch television with one less bill. To save money. I stream everything now.!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5 D

10 Figure 1: Receipt of TV Programming Digital cable service (Time Warner Cable, Comcast, Cox, Charter, etc.) 38% 3 4 Satellite service (DirecTV, Dish) 2 21% 29% Basic cable service (Time Warner Cable, Comcast, Cox, Charter, etc.) 16% 19% Fiber to the home service (Verizon FiOS, AT&T U- verse, etc.) 1 Cord Cutters/Nevers 9% 9% 1 21% Total Base: Total Respondents (n=1639) Q.10 - In which of the following ways, if any, do you receive television programming in your home? Device Usage The TV set is by far the device most frequently used by all demographic groups to watch TV, used regularly by 9 in 10 viewers. Among Millennials, however, the proportion watching content on a television set is significantly lower than the older generational groupings (8), primarily due to college age TV viewers (79% for 18 to 24 year olds), who are less likely to have a set available to them, but use laptops, and other mobile devices more frequently. Among the 18 to 24 age group, laptops are a key device for the delivery of entertainment content, with 6 saying they have watched TV programming on this device. Tablets and smartphones are also important to the younger demographic, with nearly 3 in 10 Millennials saying they watch TV programming on a tablet and about 2 in 10 on a videogame console (2) or a smartphone (22%). Teens are the group most likely to say they watch TV programming on a smartphone (30%). Gen Xers are most likely to record and watch on DVR (30% vs. for Millennials, 21% for Boomers). DVR users in this group have a median age of 40 and typically reference the desire to avoid commercials as the!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.-

11 reason for using a DVR. Viewing on an HD television is driven by Gen X also, and Boomer men. Women are significantly less likely to say they have watched on an HD set than men (5 vs. 62%). Laptops are also important source of TV content among women, with nearly 4 in 10 saying they watch TV programming on this device (39%), compared to 3 of men. Laptop use for viewing television among women is strongest among college age women, age 18 to 24. Figure 2: Devices Used to Watch TV Programming Any Television (Net) 90% High-definition TV (HDTV) 57% Internet-enabled TV or Smart TV 3D-capable TV (3D TV) Laptop, notebook, netbook computer 36% Laptop Age 18-24: 6 DVR/TiVo 2 Desktop computer 22% Tablet 21% Smartphone 1 Smartphone Age 13-17: 30% Video game Console 1 Digital Media Player Base: Total Respondents (n=1639) Q.15 - Do you ever watch full-length TV programs or series using any of the following devices? Preferred Device for TV Viewing When asked their preferred device for watching full length TV programs, the television is still the favorite across age groups, but there are some stark differences among the Millennial demographic. Those who prefer viewing on a TV typically site screen size, quality of picture, sound and just a greater familiarity with using this device compared to other options.!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5..

12 Overall, Millennials are more open to viewing on other devices, most notably the laptop, selected as the preferred device for viewing TV shows among 19% in this age group. Portability is a key driver for Millennials and many site this as the reason for their preference for laptops. Some also reference that it has a larger screen than other portable devices: It is bigger than my tablet and can sit there on its own and I can play the shows while using other devices like my tablet or phone It's easy to view shows anywhere and more comfortable than a smartphone or ipod The laptop is portable, but also bigger than a tablet so it is also convenience mixed with comfortability. I can take the devise anywhere and also if I'm doing anything else is so much better to multitask. Another select either a tablet or smartphone (7% and 6%, respectively) and 6% chose a video game console as their preferred device among this age group. Sources of TV Programming Compared The majority of those in high speed Internet households say they have watched at least one full length TV program from a streaming source within the past 6 months (71%). Millennials stand out as embracing multiple sources for television programming. Sources for streamed programming can include a subscription service (Netflix, Hulu Plus, Amazon Prime), free services like Hulu or Crackle, network websites or official network/service provider apps, YouTube, or pay to play services like itunes, or Vudu. Millennials are much more likely to have watched streamed TV programs in the past 6 months (8), compared to live programs on TV during their original air times (5). In fact, Millennials are about equally likely to say they have watched TV programming live (5) and on Netflix (5). Boomers are most likely to watch live programming (7), though a healthy proportion of this group has also streamed programming in the last 6 months (52%), as have Gen Xers (69%). Gen Xers are the group most likely to watch time shifted programming using non-streaming sources of content. They are the heaviest DVR users (49%) and are also the group most likely to watch TV programming on VOD (2), or DVD (27%). YouTube is a significant source of streamed TV program viewing, driven by Millennials (36% watched a full length TV program in the past 6 months), and is second only to Netflix (56%). After Netflix and YouTube, free websites, such as Hulu or Crackle (28%), are the next most common source of TV program viewing among Millennials, followed by network websites (). Among current SVOD subscribers, over 9 in 10 (92%) have streamed a full-length television program in the past 6 months. Not surprisingly SVOD subscribers are significantly less likely to watch TV programming live compared to non-subscribers, with 5 indicating they have watched any programs live at their scheduled time (within the last 6 months) vs. 7 of non subscribers. SVOD subscribers use many sources of streamed programming beyond their subscription services, including YouTube (30%), network websites, and free online websites (27% for each).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.,

13 Figure 3: Sources of TV Programming Used in Past 6 Months among SVOD Subscribers Have Watched Streamed TV Programs (NET) 71% Netflix streaming subscription service YouTube A network website (like ABC.com, Fox.com, TBS.com) Online, on a site that shows television programs for free from a variety of sites (e.g. Hulu, Crackle, etc.) Amazon Prime streaming subscription service A network app (like HBO Go, Watch TNT, Watch ABC App, etc.) A TV service provider streaming video app like Comcast Xfinity, DIRECTV app, U-Verse apps, etc. Hulu Plus streaming subscription service A service where I purchase individual programs or series, like itunes, Amazon Instant Video, Vudu, Blockbuster On Demand, etc. A television channel during a show's original air time 26% 22% 1 8% 6 Your DVR (like TiVo or the DVR from your cable company) A DVD/BluRay that you purchased or rented VOD (Video on Demand) through my Cable, Satellite, or Telco provider Total 19% 2 Base: Total Respondents (n=1639) Q.25 - Have you watched any full-length TV programs or series in the past 6 months, through any of the following? First Choice for Source of TV Viewing Overall the TV is still the first choice for TV program viewing among total viewers (61%), followed by DVR (48%) and Netflix (46%), though this differs significantly by age. As streamed services increase their penetration in TV households, it s likely that they will be the go-to for TV programming as is currently the case among Netflix and Hulu Plus subscribers. When Millennials sit down to watch TV programming, the majority (58%) say the first place they look is Netflix, followed by their DVR or Live programming (46% for both). Netflix is the clear winner as a source for TV!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.>

14 programming among the youngest demo (13-24 year olds), with two thirds of this group (66%) saying they go to Netflix first to find TV programming. Among Boomers, the first choice for viewing is still Live TV (77%), followed by DVR (4) and then Netflix (3). Gen Xers are also most likely to go to live TV (62%) first, though significantly more likely than Millennials or Boomers to go to the DVR as a first choice (5). Hulu Plus ranks higher in the choice hierarchy among Gen Xers compared to other groups. Gen Xers are about equally likely to select Hulu Plus (27%) and Netflix (26%) as their first choice for TV programming. Despite the high proportion of Millennials who say they watch full length TV programming on YouTube (30%), it is not among the top 5 sources for TV programming in their selection hierarchy. It is more likely to be a source when TV programming is not found elsewhere. Among SVOD subscribers, their first choice to watch TV programming is time shifted content, either through Netflix or DVR (46% for both). Hulu Plus is selected by of subscribers, and Amazon Prime falls below VOD, free websites, and YouTube at. Figure 4: First Choice Source of TV Programming Live television 61% DVR or TiVo 48% Netflix Hulu Plus 21% 46% Netflix Among 13-24: 66% TV service provider app like Comcast Xfinity, DIRECTV app, U-Verse apps, VOD (Video on Demand) 17% Online, for free (e.g. Hulu, Crackle, etc.) YouTube 16% 1 Online for Free Among 18-24: Amazon Prime A network website (like ABC.com, Fox.com, TBS.com) A network app (like HBO Go, Watch TNT, Watch ABC App, etc.) A DVD/BluRay that is purchased or rented 9% A service where I purchase individual programs or series, (like itunes, 6% Base: Watched full-length TV show through the following/individually based Q.26 - Where do you typically go first when you are in the mood to watch a full-length TV show?!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.?

15 Perceived Value of TV Program Sources Viewers were asked how much they valued different sources/methods for connecting them to TV program content. Among total respondents, broadcast television channels were selected most often (52%) as "very valuable, followed by cable (4). Subscription to Netflix is not far behind cable, at very valuable. Among the different sources of TV program content, Millennials rank Netflix (51%) above broadcast channels (42%), cable TV service (36%) and satellite TV subscription (29%) as very valuable source of TV programming. YouTube ranks 3 rd, just above satellite subscription as "very valuable" (31%) among this demographic group. Boomers are most likely to say broadcast TV channels are very valuable (6) compared to other sources of TV programming, followed by the cable (52%) and satellite (39%) subscription. Like Boomers, Gen Xers are most likely to value broadcast channels (56% very valuable ) and followed by cable (49%) and satellite (37%). Preferred Source of TV Programming Overall, live television is most often selected as the preferred way of watching TV among total viewers age 13 to 64 (39%), followed by DVR (2) and SVOD (19%). However, there are significant differences among demographic groups in overall preference, with Millennials saying their preferred way of accessing TV programs is through an SVOD service like Netflix, Hulu Plus or Amazon Prime (30%), followed by live television (27%) and DVR (). The majority of Boomers prefer live TV viewing (58%), followed by DVR (2). All other methods of viewing fall well below these two for this group. Gen Xers also select live TV most frequently (though it s not a majority at 41%), followed by the DVR (31%) and Streaming (). Among SVOD subscribers, there is a strong preference for viewing TV through their streaming service (3), though about one quarter of subscribers still say they prefer live TV viewing () or viewing content on their DVR (2). Millennial SVOD subscribers are most likely to have a preference for their subscription service (4), with only 18% selecting on television during its scheduled air time. TV Program Genre Viewing Movies, Comedy and Drama are the top three TV program genres watched by viewers in broadband households. There are some significant differences by demographic, with the Millennial age group most likely to say they watch Comedy (7 vs. 70% for Gen Xers, 68% for Boomers), Gen Xers and Boomers are most likely to watch movies (76% and 7 respectively) and Dramas (69% for both Gen X and Boomers). Among Millennials, Comedies, Movies, Dramas, and Dramedy (Shows that combine Comedy and Drama) are the only genres that 50% or more say they watch. Millennials are next most likely to say they watch Sports (36%) and Sci-Fi (3). Gen Xers are more likely than the other age groups to watch Sci-Fi (47%), and are about equally likely as Boomers to say they watch Documentaries () and Contest Reality Shows (31%). About half of Gen Xers say they watch Live Sports (48%), just below Boomers at 5. Boomers are the group most likely to say they watch time sensitive programming, including Local News (76%), National News (57%), Weather (52%) and Live Sports (5). SVOD subscribers are significantly more likely than non-subscribers to watch Movies (76% vs. 71%), Comedies (7 vs. 69%), Sci Fi (4 vs. 37%) and Children s Programming (21% vs. 17%).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5./

16 Given that SVOD non-subscribers tend to be older in age than subscribers, it s not surprising that genre viewing corresponds with viewing among older age groups, including heavy Local News (60%), National News (42%) and Weather (38%) viewership.!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.@

17 II. TV CONTENT DISCOVERY Sources of Program Awareness Over half of respondents say TV advertising is their primary source of awareness for the TV programs they watch regularly (56%). This is the top source of awareness among all three generational groups, though it is highest among Boomers and declines by age, with 68% of Boomers, 59% of Gen Xers, and 47% of Millennials saying they find out about the programs they watch from TV advertising. After TV advertising, Millennials are next most likely to say they learned about the programs they watch through word of mouth, from a friend, family member or someone else (39%). Word of mouth is particularly important among college age Millennials, who say they are just as likely to find out about programs they watch through word of mouth, as from TV advertising (4 for both). About 4 in 10 Gen Xers (36%) attribute their awareness of programs to word of mouth, and Boomers are least likely to have heard about programs this way (31%). Women are significantly more likely than men to say they find out about programs through word of mouth ( vs. 31% for men). About one quarter of Millennials say they learned about the shows they watch from social media () and about two in ten find out through online advertising () or recommended for you feature from a streaming service based on previous viewing (18%). Millennial women drive awareness through social media, (29%) as well as streaming service recommendations (22%). Boomers are more likely than the other groups to say they found programming by channel surfing (37%) or because it s on a network they currently watch already (50%) compared to other age groups. This is particularly true of women who are Boomers. Women in the Boomer and Gen X demographic are also most likely to say they find out about shows through reviews of new TV shows (26%) compared to Millennials. Figure 5: Sources of TV Program Discovery A friend/family member/coworker Television ad It's on a network I currently watch Browsing channels/channel surfing A review of new TV shows A mention/segment in an Something from my TV service I see it on a TV network's website An online ad or promotion A mention on social media A mention in a magazine I read A magazine ad 4 41% 41% 41% 39% 36% 3 30% 76% 7 71% 6 58% Base: Total Respondents (n=1639) Q.62 - How do you usually find out about the TV programs you watch regularly?!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.a

18 SVOD subscribers have many more content viewing options available to them than nonsubscribers. Consequently they are more likely to become aware of new programming through more varied sources less so by traditional sources. SVOD subscribers are more likely to say they learned about the programming they currently watch through word of mouth (42%) compared to non-subscribers (29%). About 2 in 10 SVOD subscribers also say they find out about programs from social media (22%), reviews of new TV shows (21%), and a recommendation from their streaming service (21%). A little over one quarter find programs when channel surfing (26%). All other sources of awareness fall below among SVOD subscribers. Primary sources of awareness among SVOD non-subscribers are more limited and center on television viewing, with 6 mentioning TV ads, 48% saying they found it on a network they currently watch and 3 channel surfing. In general, SVOD subscribers who are in the Boomer age group are most likely to find out about TV programs in similar ways to non-subscribers, with 6 saying they find out through ads on TV and 3 through channel surfing. However, word of mouth plays a more important role among SVOD Boomers than among non-subscribers as it does for all SVOD subscribers. About 4 in 10 within all age groups say they find out about programs they currently watch through word of mouth. This is selected at about an equal rate as TV advertising among Millennials (42% WOM vs. 4 TV ads). Among Gen Xers, word of mouth is selected less frequently than TV advertising (42% WOM vs. 52% TV ads), but at the same rate as it s on a channel I currently watch (42%). Over one quarter of Millennial SVOD subscribers discover programs from social media sources (27%) and from streaming service recommendations (). Reviews of TV shows are a significant source of awareness among Gen Xers and Boomers, with 26% and 27% of these groups referencing them as sources. Most Important Sources of TV Program Awareness Overall, total TV viewers consider word of mouth, (in person recommendations from friends/family/others), and TV advertising to be about equally important in the decision to watch new TV programs (76% and 7 respectively very/somewhat important ) though there are significant differences by demographic groups. Word of mouth is ranked highest in importance among Millennials (77% very/somewhat important ) and women (80%) in selecting new TV programs to watch. In addition, about one third of Millennials consider word of mouth very important in their decision to watch new programs (3) compared to for TV advertising. Among Gen Xers, word of mouth and TV advertising are about equally important (79% and 80%, respectively), while Boomers consider TV ads more important (8) compared to other sources. Nevertheless, nearly three quarters of Boomers also say word of mouth is important (72% very/somewhat important ) in program selection. Notably, over half of Millennials (52%) consider a recommendation from a streaming service to be important in their decision to watch a new program. Online advertising and mentions in social media are also regarded as important by an equal proportion of Millennials at 4. Boomers are most likely to be influenced by something sent by their cable, satellite or Telco service sends to them, with nearly half saying this is an important source of program awareness (46%). This is significantly lower among Gen Xers () and Millennials (39%).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.B

19 Figure 6: Importance of Sources of TV Programming ( Very/Somewhat Important ) A friend/family member/coworker recommendation Television ad It's on a network I currently watch Browsing channels/channel surfing A review of new TV shows A mention/segment in an entertainment news show Something from my TV service provider A recommendation from a streaming service based on other things I watch I see it on a TV network's website An online ad or promotion A mention on social media A mention in a magazine I read regularly % 39% 46% 41% 38% 41% 41% 42% 39% % % 31% 76% 77% 79% 72% 7 66% 80% 8 71% 6 76% 79% 6 59% 68% 72% 58% 5 62% 6 52% 30% A magazine ad 31% 30% 27% Total Base: Total Respondents (n=1639) Q.64 - How important is each of the following in your decision to watch a new program (i.e., any program you haven't watched before)... Summary of "Top Two Box" (Very/Somewhat important)!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5.d

20 Over 8 in 10 SVOD subscribers consider word of mouth important in the decision to watch specific TV programs (81% very/somewhat important ), followed by seeing an ad on television (69%). They are less likely than non-subscribers to say more traditional ways of finding programming, like channel surfing (62% for SVOD subscribers vs. 69% for non-subs) or trying a new show because it s on a network you already watch (67% for SVOD vs. 77%), are important reasons in their decision to watch a new show. SVOD subscribers are more likely to say they are influenced by online sources of information, such as a recommendation from a streaming service based on other things they watch (56% "very/somewhat important" vs. 2 for non-subscribers), an online ad or promotion (4 vs. 3 non-subscribers) or a mention on social media (42% vs. 28% for non-subscribers). Word of mouth is considered most important in the decision to watch new programming by all ages of SVOD subscribers. TV advertising, channel surfing and finding programs on networks currently watched are all elements that Gen Xers and Boomers consider more important than Millennials. Among subscribers, recommendations through their streaming service are most influential among Gen Xers (5 very/somewhat important ) and Millennials (60%), as are mentions on social media ( and 4 for Millennials) in comparison with Boomers. A little over one-third of Millennials (36%) also consider a network s social media page important in influencing their decision to watch. Outdoor advertising is deemed more important among Millennials (3) than the other two age groups and is at the same level of importance as the impact of magazine ads or mentions (both 3 among Millennials). from streaming services about programs available is considered important by about 4 in 10 Gen Xers (41%) and Boomers (4).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5,-

21 III. ATTITUDES TOWARD THE CHANGING TV LANDSCAPE Overall, viewers have positive perceptions of the TV programming currently available to them, with over two thirds who agree that they have a greater variety of programs available to them than in the past (67%) and over half who agree that there are more quality programs available to choose from (56%). These measures are consistent across demographic groups. Over half of viewers (56%) say they are watching more TV programming now than in the past, and this measure is highest among the Millennial group (60% "agree strongly/somewhat ). Over half of Millennials attribute some of their increased viewing to the availability of streaming services, with 59% saying that having shows available through streaming has increased their viewing. Millennials are also most likely to agree that streaming services make it easier for them to stay current with the programs they watch (6). Coinciding with over half of Millennials who agree that having streaming services has increased their viewing of TV programs, about half (51%) also agree that they are watching fewer shows on live TV at their scheduled airtime as a result of streaming. Gen Xers and Boomers are significantly less likely to agree that their live TV viewing has been impacted by streaming (3 Gen Xers and Boomers vs. 51% of Millennials). In general, SVOD subscribers are more positive than non-subscribers about the variety and quality of programming currently available to them. Seven in ten SVOD subscribers agree they have a greater variety of shows available to them now (70% vs. 6 of non-subscribers), and that there are more high quality TV shows to from which to select (60% vs. 51% of non-subscribers). The majority of subscribers agree they are watching a greater variety of shows than in the past (61% vs. 50% of nonsubscribers) and that they spend more time watching TV shows now (52% vs. 39%). SVOD subscribers value their service for its convenience, with 72% agreeing that it makes it easier to stay current with their favorite shows. Two thirds agree that it has increased their viewing of TV programs overall (66%). Nevertheless, over half agree that they watch fewer shows during their scheduled time on live TV as a result of streaming (5). Among SVOD subscribers, Millennials are most likely to say their viewing of TV programs is greater than before as a result of having SVOD service, with 69% agreeing that their viewing has increased overall, 6 saying they watch a greater variety than in the past, and 5 saying they think they spend more time watching TV shows than in the past. Though streaming may have increased viewing overall, over half of Millennials agree that they watch fewer shows on live TV at their scheduled air time (58%) due to the availability of shows on their streaming service. Older subscribers, including Boomers and Gen Xers, are most likely to say they think there is a greater variety of programming (77% and 72%, respectively) and have positive perceptions of programming as a result of having a subscription to SVOD service. Among all three age groups, over 7 in 10 agree (72%) that streaming has made it easier to stay current with their favorite shows.!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5,.

22 Figure 7: Perceptions of the Changing Television Landscape Among SVOD Subscribers I think there is a greater variety of shows available for me to choose from than in the past 70% I think there are more high quality television programs available for me to choose from than it the past 60% I currently watch a greater variety of TV shows than I have in the past 61% Streaming services make it easier for me to stay current with my favorite television programs 72% It's hard for me to find the time to keep up with all of the shows I'm interested in watching 5 Having television shows available through streaming services has increased my viewing of TV programs, overall 66% I think I spend more time watching TV shows than I have in the past 52% I watch fewer shows on live TV at the time they air because there are more TV shows available through streaming services 5 SVOD Subscribers Base: Total Respondents (n=1639) Q.65 - How much do you agree or disagree with each of the following statements... Summary of "Top Two Box" (Agree strongly/somewhat) Live vs. Streamed/Binge Viewing Live TV viewing is preferred by a minority of total TV viewers (31%). Rather, 4 in 10 say they prefer watching a mix of time shifted shows and live programs, and another 29% prefer time shifted viewing, either waiting to watch when a full season of episodes is available or watching one or more episodes when convenient. Not surprisingly, Millennials are most likely to choose time shifted programming (38%), with 2 saying they prefer to watch multiple episodes at once and another 1 like viewing an entire season at once. Boomers are most likely to prefer watching programming at its scheduled time on TV (4). About half of viewers (49%) say that the ability to watch 3 or more episodes of a series back to back makes them more likely to continue watching the series. This sentiment is strongest among Millennials (56%) as is the desire for all of the shows they watch to make full seasons available at once vs. one episode per week (47%). Another 41% say the ability to watch 3 or more episodes at once is important to them. Despite their favorability towards binge viewing and the release of full seasons of episodes, 46% also agree the release of all episodes at once may make the program less suspenseful and have concerns about spoilers (42%).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5,,

23 IV. Exploring SVOD Attitudes and Viewing Live vs. Streamed/Binge Viewing among SVOD subscribers SVOD subscribers are most likely to say they prefer watching a mix of live and time shifted viewing (39%), though another 3 prefer time shifted viewing. Live program viewing is preferred by 21% of SVOD subscribers, driven by Boomers (30%). Men are also significantly more likely to prefer live viewing compared to women. Most SVOD subscribers agree that weekly programs give them the ability to talk with friends as shows unfold each week (5). Nevertheless, the ability to binge watch TV programs keeps SVOD subscribers loyal to programs they watch. Over half (56%) agree that watching 3 or more episodes at once makes them more likely to continue watching the series. This sentiment is strongest among Millennials, with over 6 in 10 saying they are more likely to keep watching a show they can binge watch (61% agree). About half of total SVOD subscribers agree that they would like all shows they watch to make a full season of episodes available all at once (49%) and 42% say the ability to watch 3 or more episodes of their favorite show in one sitting is important to them. One third (3) agree that they are less likely to watch a series that doesn t offer all episodes in a season to watch when they want to, although only 16% agree strongly with this statement. Hulu Plus viewers have a higher affinity for binge viewing and consider the availability of full seasons of programs important, with 5 saying it s important for them to be able to watch multiple episodes back to back vs. 4 of Netflix subscribers and 41% of Amazon Prime subscribers. About 3 in 10 say they typically watch an entire season of episodes at one time (29%). Another 49% further agree that it s outdated not to have a full season of episodes available!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5,>

24 Figure 8: Attitudes Toward Binge Viewing Agree Strongly/Somewhat Watching new episodes of a series weekly gives me an opportunity to talk with friends about it each week Watching 3 or more episodes back to back makes me more likely to continue watching I would like all of the shows I watch to make a full season of episodes available instead of one each week 49% 5 56% Having episodes in a season released all at one time makes a TV series less suspenseful I am concerned about seeing "spoilers" if a season of episodes is released all at once 39% I think it's outdated not to have all episodes available for a series at one time It is important to me to be able to watch 3 or more episodes of my favorite shows at one time 42% I am less likely to watch a series that doesn't offer all episodes in a season to watch when I want to Having all episodes of a series available at one time makes it less enjoyable to me because I can't talk about it with people from week-to-week 28% 3 Base: SVOD Subscribers (n=888) Q In general, how much do you agree or disagree with each of the following statements about "marathoning" or "binge viewing" (i.e., watching more than 3 episodes of a series in one sitting)... Summary of "Top Two Box" (Agree strongly/somewhat) About half of SVOD subscribers (48%) watch 1 or 2 episodes of TV shows on SVOD at a time, while the other 52% watches 3 or more episodes, half of the season or the entire season at one time. Almost one quarter of subscribers say they typically watch an entire season of episodes at once when they watch on Netflix, Amazon Prime or Hulu Plus. Millennials are most likely to binge watch (57% watch 3 up to an entire season at once). About one quarter of Millennials and women say they typically watch an entire season of a series in one sitting (26% and 27% respectively). Devices Used for Streaming TV SVOD Subscribers Total SVOD subscribers are most likely to stream TV programs on their laptop (4), followed by a television set or tablet computer (39% and 38%, respectively). Boomers are most likely to stream from their television (50%) as are Gen Xers (46%), with Millennials far less likely to use a TV to watch SVOD programs (3). Millennials are most likely to use their laptop (50%), followed by a tablet or video game console (39% and, respectively).!"#$%&'()+,-./!" )%"0&71811"7&9)&"090:;8<=5,?