TV Everywhere Research

Transcription

1 Research A summary of research findings regarding from various sources Compiled August, 2015 by CTAM

2 1 Contents THE UNIVERSE OF TVE USERS... 2 How large is it overall?... 2 Use by network?... 4 Use in home vs. out of home?... 8 Growth/trends of unique users?... 8 Profile of the TVE User vs. Non-User?... 9 BEHAVIOR Frequency What has the frequency of use been over time? How has usage of live stream vs. on demand changed over time? What percentage of time is spent, by demo, streaming content by device? What does streaming of older, library content look like vs. episodes from current seasons? How is viewership of short- and long-form content changing? What are the demos of streamers of different content, on different devices? What does usage look like by device? What does usage look like in terms of time of day and content? Do users prefer MVPD-aggregated services or network services? ISSUES & OPPORTUNITIES What percentage of consumers could use TVE but aren t? Why not? What do we know about the authentication process? How does TVE fit in with other viewing platforms, what occasions drive usage? Is TVE being used in place of other platforms or in addition? To what extent does password sharing occur? Is TVE driving eyeballs back to linear? PERCEPTIONS, SATISFACTION & EXPECTATIONS What is the consumer perception of? What do we know about satisfaction? What do viewers want or expect?... 39

3 2 ADVERTISER VALUE & MONETIZATION What s the incremental value of TVE content to the advertiser? What do drop off rates at varying ad loads look like? Metrics of digital video monetization THE UNIVERSE OF TVE USERS How large is it overall? 86% of the total U.S. Internet population watches online video. 1 Reported actual numbers and share of viewers using vary across sources. Adobe reports that on average, 13 million household viewers tuned in to TVE services in 2014; up 116% from 6 million in % of Pay-TV subscribers actively viewed content in Q4 2014; up 184% since Q (Fig. 1). 2 (Fig. 1) In 2014, Parks Associates estimated that there were 27 million North American users, and projected this number to grow to nearly 64 million by 2018 (Fig. 2). 3 1 ComScore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore 2 U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report

4 3 (Fig. 2) Hub Research found that by June, 2015, 44% of cable subscribers use TVE at least once a month (Fig. 3). 4 (Fig. 3) 3 Parks Associates 2.0: The Next Steps in Multiscreen, March Hub Research, CTAM Wave Four Report, Among P18-64, July 2015

5 4 Per Parks Associates, of those subscribers aware of services from their pay-tv provider, 77% claim to use the service, a 19% increase from Early 2015 research commissioned by natpe/cea identified 71% of the U.S. population A13-54 (with high-speed Internet access) are TV Streamers overall. 6 Use by network? Hub Research reported for June, 2015 that TVE viewing of basic cable networks remained widely distributed across networks (Fig. 4). Expansion of the networks surveyed in this wave of the study revealed highest penetration for History Channel and Food Network (Fig. 5), as well as AMC (Fig. 4). Watch ESPN remains the most mentioned sports TVE app, with Fox Sports Go on its heels (Fig. 6) and HBO Go the most widely mentioned premium source (Fig. 7). 7 (Fig. 4) 5 Parks Associates 2.0: The Next Steps in Multiscreen, March NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November Hub Research, CTAM Wave Four Report, Among P18-64, July 2015

6 5 (Fig. 5) (Fig. 6)

7 6 Use of non-authenticated broadcast sites and apps continues to fall, per Hub Research (Fig. 8). 8 (Fig.7) (Fig. 8) 8 Hub Research, CTAM Wave Four Report, Among P18-64, July 2015

8 7 A study commissioned by Discovery Networks and conducted among P18+ also found a similarly wide distribution of monthly/+ viewing across sources (Fig. 9). 9 Q5A. How frequently do you watch full episodes on each of these... sites or apps? (% Monthly+) Total 18+ Pay TV Sub 18+ Base: Netflix 32% 29% YouTube 17% 16% ABC 12% 12% CBS 11% 11% Hulu 11% 9% Amazon Instant Video 11% 10% NBC 9% 9% HBO Go 9% 9% FOX 9% 8% Cable or satellite provider's site or app 9% 9% Hulu Plus 8% 7% TBS 7% 8% ABC Family 6% 7% A&E 6% 7% USA 6% 7% TNT 6% 7% Comedy Central 6% 6% AMC 6% 7% History Channel 6% 6% ESPN 5% 6% Discovery Channel 5% 6% PBS 5% 5% FX 5% 5% TLC 5% 5% Syfy 5% 5% Lifetime 4% 5% The CW 4% 4% MTV 4% 4% Showtime Anytime 4% 4% Crackle 4% 3% Nickelodeon 3% 4% Animal Planet 3% 4% Spike TV 3% 3% Bravo 3% 3% Starz Play 3% 3% E! 2% 3% Max Go (Cinemax) 2% 3% BET 2% 2% Encore Play 2% 3% VH1 2% 2% Univision 1% 1% (Fig. 9) 9 Discovery Media Consumption Study, December 2014

9 8 Use in home vs. out of home? The Diffusion Groups s Senior Analyst Joel Espelien notes that, ironically, mobile video is primarily about in-home viewing, rather than viewing while on the go. According to February 2015 research, close to 80% of tablet viewing and 50% of smartphone viewing takes place in the home. It s less about mobile viewing as commonly imagined and more about the individualization and personalization of TV itself. 10 Similar, Hub Research found that 78% of viewers were at home the last time they watched TV on a tablet, and that 69% reported, My most recent viewing session on a mobile app was inside home. 11 Of note, certain types of viewers are more likely than others to associate specifically with out of home viewing. While 14% of the base surveyed agreed that Watching TV shows and movies from your TV service when you re at another location (someone else s home, airport, hotel, etc.) came closest to their understanding of, 21% of Amazon Prime and Roku users agreed with this description. And, not surprisingly,19% of those who watch on a phone were more likely than the base (14%) to describe TVE as Watching TV shows and movies from your provider outside your home, as were 22% of Apple TV users. 12 The average number of devices used to watch TV online in 2014 was 2.7, vs. 2.3 in Mobile devices like tablets are increasingly being used as devices for viewing at home. The last time you watched on a tablet were you : At Home 78%, Away from home 22%. (Base: have watched TV on computer, tablet or smartphone). 13 Growth/trends of unique users? According to new research from TDG, mobile video viewing on smartphones and tablets will experience strong growth over the next decade ( ), taking share from both legacy TV and PCbased broadband video viewing. By 2025, mobile video will account for more than 20% of total video viewing minutes among US consumers (including legacy TV). The concept of watching television is being redefined, notes TDG s Senior Analyst Joel Espelien, transforming from a social medium characterized by groups of viewers sitting in front of the living room television, to an individual medium defined by solitary viewers watching programs on smaller, more personal devices such as tablets and smartphones. Importantly, this transformation represents 10 TDG Press Release: TV Gets Personal: Mobile Video to Account for 20% of Total Viewing by 2025; March 4, 2015; 11 Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

10 9 the replacement of mass-market broadcasting by personalized video apps, some of which are already generating half of their total video traffic from such devices. 14 FreeWheel s take on the strong growth of video ad viewing during 2014 is that viewers finding new ways to watch their favorite ultra-premium content are expanding the TV ecosystem. To wit: Live viewing grew 297% year-over-year, driven by strong growth in Sports streaming and News simulcasts First-run broadcast shows attracted far more viewers in Q than in the year prior (67 % increase in digital video ad views) Over-the-top (OTT) streaming devices, overwhelmingly used for long-form and live viewing, overtook tablets, accounting for 8% of all video ad views Viewers are accessing current season content throughout the television season. 64% of viewing occurred over a week after that content s original air date. Authenticated viewing grew 591% year-over-year, as 56% of all video ad views on long-form and live content now come from behind authentication walls. 15 Profile of the TVE User vs. Non-User? Viacom identifies two groups of viewers: Authenticators complete authentication as pay TV subscribers. They are early adopters 21% of authenticators started using TVE because they like to be the first to try new things. Digerati watch shows on apps and sites but don t authenticate. 16 Parks Associates has identified seven viewer segments which are based on time spent consuming video and display platforms used (table below, Fig. 10). 17 Avid Viewers Above average consumption of video across all devices. Relatively higher levels of education. Relatively younger. More than 50% have children. More than 90% are pay-tv subscribers. High video spending. Enjoy staying on top of technologies and like owning the latest devices. Don t worry about saving money and getting the best value as much as other segments. Traditionalists Above average video consumption on the TV. Below average on all other devices. Relatively higher levels of education. Less likely to have children in the home. Do not often watch TV with others. Likely to follow a particular series on TV and to watch at the time of broadcast. High spending on triple play bundles and access services. High use of premium Pay-TV features. Relatively older. 14 TDG Press Release: TV Gets Personal: Mobile Video to Account for 20% of Total Viewing by 2025; March 4, 2015; 15 FreeWheel Video Monetization Report, Q4 2014FreeWheel Video Monetization Report, Q Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Parks Associates Digital Media: Q3 Market Focus: The Death of Linear TV?, Q3 2014

11 10 Travelers Above average video consumption on mobile devices. Relatively younger. High percentage of females. More than 50% have children. Children heavily influence spending and viewing in the home. Use mobile devices while watching TV. Relatively low spend on triple-play bundles, but high spend on broadband and mobile services. Multiscreeners Above average video consumption on computer and mobile devices. Below average on TV. Relatively younger. Less likely to be married than other groups. Relatively lower income. Lower rate of home ownership and higher rate of apartment dwelling than other groups. Lowest likelihood to have a pay-tv subscription. Relatively low ARPU for triple play services or standalone broadband / TV services. High overall spending on video, including paid VOD. Higher than average awareness. Feel that online video is just as good as Pay-TV. Rooted Viewers Above average video consumption on large screen devices (TVs and computers). Below average on mobile. Relatively lower income. Relatively lower levels of education. Value-conscious. Low spending on TV, but moderate overall video spending. High use of VOD. Others in the household rarely influence video spending. Purists Exclusively watch video on a television. Relatively older. Less likely than other groups to have children at home. More than 90% are Pay-TV subscribers. Lower overall video spending, but high ARPU for standalone TV services. Among groups, most likely to be married and most likely to own a home. Do everything they can to save money and get the best value when purchasing anything. Light Users Below average video consumption across all devices. Among groups, highest triple-play bundle ARPU. Low overall video spending. Lowest use among groups of all premium pay-tv services. More likely than other groups to watch TV programs when broadcast but do not necessarily follow a particular series. Less open to technology as a way to save time. Less likely to pay more for convenience. Source: 18 (Fig. 10) One distinguishing characteristic of Multiscreeners is a heavy reliance on computers as a viewing platform. Computers account for 64% of Internet video consumed by this group, as well as a majority of all video consumed by this group Parks Associates Digital Media: Q3 Market Focus: The Death of Linear TV?, Q Parks Associates Digital Media: Q3 Market Focus: The Death of Linear TV?, Q3 2014

12 11 users have several characteristics that set them apart from average pay-tv subscribers, including: Younger age (on average, seven years younger) More likely to have children at home A higher rate of connected device ownership Higher monthly ARPU Higher spending on all types of video (Fig. 11, Fig. 12) 20 (Fig. 11) (Fig. 12) Parks Associates reveals that TVE use is inversely proportional to age (Fig. 13) 21, and further determined that users are more likely than average subscribers to have downgraded their pay-tv package in the past year to a lower cost option, so called cord-shaving or cord-trimming. However, the higher overall ARPU for users suggest that these subscribers either make up for their 20 Parks Associates 2.0: The Next Steps in Multiscreen, March Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q3 2013

13 12 lower-priced TV package with a higher priced broadband package or that they still have more premium video services than average subscribers, even after a downgrade. 22 (Fig. 13) Hub Research has identified a preference for mobility as an important characteristic of users. They are more likely to use a portable device for than an average subscriber, twice as likely to update Facebook with a tablet, and 50% more likely to catch up on news and blogs via smartphone. TVE use is higher among premium channel subscribers and Smart TV owners. 23 Demographic differences are less dramatic, although use is stronger among males and Millennials, and data from Hub Research suggests that men will be more attracted to messages touting TVE as an exclusive benefit (Fig. 14) Parks Associates 2.0: The Next Steps in Multiscreen, March Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

14 13 (Fig. 14) BEHAVIOR Frequency According to Hub Research, heavy TVE users those MVPD subscribers who say that they access TV content that requires MVPD authentication daily or several times a week - have grown from 15% to 23% in the six months between the waves collected in January and June, 2015 (Fig. 15) Hub Research, CTAM Wave Four Report, Among P18-64, July 2015

15 14 (Fig. 15) What has the frequency of use been over time? Parks Associates reported in 2013 that roughly one-half of those that report having service used it on a monthly basis, and that most pay-tv subscribers who reported successfully using online video that requires authentication also reported doing so with some level of frequency 13% watched authenticated video at least monthly. 26 Parks Associates also observed in 2013 that 21% report watching video on websites that require verification several times a week or daily (sum of daily/almost daily 8% and 1-3 times a week 13%). 27 Adobe observed in the U.S. Digital Video 2014 Inaugural 2014 report that the frequency with which viewers are logging in and engaging with premium subscription gated content is growing rapidly, driving to become more mainstream. average active quarterly viewers grew from 6% to 13% year over year. 28 Most recently, Adobe has observed that active monthly household viewership was up 6% quarter over quarter in 1Q 2015, rising to 13.2% of HH s Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Adobe U.S. Digital Video 2014 Inaugural Report, Adobe Digital Index 29 Adobe Q Digital Video Report, Adobe Digital Index

16 15 According to data collected for natpe/cea, 52% report viewing full-length TV programs or series on network websites once a week or more often, and 51% report using official apps with this frequency. 30 How has usage of live stream vs. on demand changed over time? Linear video (vs. non-linear video) accounted for roughly one-fifth (19%) of the video consumed on smartphones in 2014, down from 25% in Although smartphone live viewing is down, delayed viewing is on the rise. 32 Live sports have been deployed as a gateway drug, hooking new adopters and indoctrinating digital viewing habits. Live events are also more likely than other digital video content to be viewed across device platforms and are used as an entry point for offerings. 33 During 2014, each successive quarter brought record volumes of live streaming, culminating with a 297% annual growth rate. Strong volumes seen in Q2 and Q3, largely propelled by the World Cup, were eclipsed by events such as the College Football Bowl Season in Q4, as 23% of Programmer ad views were on live content and 83% of live ad views came from Sports. 34 What percentage of time is spent, by demo, streaming content by device? Those A18-34 and digital video subscribers are most likely to time-shift their TV viewing, per comscore findings (Fig. 16). 35 (Fig. 16) 30 NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November Parks Associates Digital Media: Q3 Market Focus: The Death of Linear TV?, Q Nielsen: SVOD Services in 41% of U.S. Homes, 3/11/2015 9:00 AM Eastern, Jon Lafayette, Broadcasting & Cable 33 FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q comscore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore

17 16 Further, 82% of those A18-34 report using a second screen device while watching TV programming on a TV set at the same time (42% frequently and 40% Occasionally ). This figure is 70% overall, and drops with age, to 57% for A What does streaming of older, library content look like vs. episodes from current seasons? FreeWheel first reported on relative age of content being viewed for Q Video ad views of Broadcast show current seasons grew 67% during While most Broadcast networks saw Fall TV ratings drop or remain stagnant in 2014, the fact that digital viewing spiked so dramatically suggests that viewers are not going away so much as finding new ways to connect with their favorite programs % of ad views were during current season content in Q42014 (vs. 86% in Q42013). Correspondingly, ad views during archival content dropped from 14% to 6%. 38 How is viewership of short- and long-form content changing? FreeWheel reported a 43% increase in video ad views on long-form (20+ minute) content year over year (Q vs. Q4 2013), continuing a trend observed as viewers replicate the TV experience in the new digital living room and outside the home. By successfully packaging bite-size clips for digital platforms, publishers grew video ad views 19% on short-form (less than 5 minute) and mid-form (5-20 minutes) content. 39 Long-form content accounted for 52% of Programmer video ad views in 4Q2014. FreeWheel hypothesizes that long-form content is poised to increase share as digital-first Publishers make original content a strategic priority. 40 What are the demos of streamers of different content, on different devices? When Millennials watch original TV series on a TV set, they often do so through a digital connection, streaming the series online. 32% report using an Internet-connected TV device within the past month for the purpose of viewing original TV series content, and 25% report using a gaming console or Blu-Ray player. 41 Attitudes toward viewing live vs. streaming vary on a few dimensions. SVOD subscribers A50-64 are much more likely than those who are younger to report that they prefer watching shows live, at the time they air, so I can discuss the latest episode with friends/family. Younger SVOD users, A13-34 and 36 comscore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore 37 FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q4 2014FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q4 2014FreeWheel Video Monetization Report, Q ComScore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore

18 17 A35-49 are more likely than older users to report that they prefer waiting until a whole season of a show is available to watch so that I can watch the entire thing. 42 What does usage look like by device? users have 2.7 more Internet-connectable CE devices than the average pay-tv subscriber and are likely to have more screens in their homes, more devices connected to the television, and more mobile devices than average subscribers. 43 TV-E authenticated videos grew 467% from January 2013 to December 2014 (Fig. 17). 44 Authenticated video starts grew 282% year over year through 1Q 2015, even in the absence of a major sporting event. 45 (Fig. 17) Gaming Console & OTT device share of videos rose 50% during ios share was down 21% YOY and 19% QOQ. 46 Connected TV devices like Apple TV, Roku and Xbox grew 4x share year over year in 1Q 2015, increasing from 6% to 24% of authentications. 47 ipad is the most popular device for streaming TV-E content (of the device breakdowns shown below), with 29% share of authenticated videos in Q4 2014; Roku is most popular OTT device (Fig. 18) NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November Parks Associates 2.0: The Next Steps in Multiscreen, March U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report 45 Adobe Q Digital Video Report, Adobe Digital Index 46 U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report 47 Adobe Q Digital Video Report, Adobe Digital Index

19 18 (Fig. 18) Mobile continues to increase share of video views; smart phone share up 55% YOY in 2014, to 15%, and tablet share up 25% YOY to 12%. 49 Apple TV drove growth of connected TV devices in the most recent year ended Q1 2015, doubling its share of all authentications quarter over quarter (from 5% to 10%). 50 Larger screens lead to more time spent viewing online videos. Q42014 vs. Q32014, smart phone viewers spent 24% more time per month, however time spent watching content on a desktop was 14 times longer than watching on a smart phone in Q Hub Research corroborates this finding in use of devices to watch TV in the past six months (Fig. 19) U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report 49 U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report 50 Adobe Q Digital Video Report, Adobe Digital Index 51 U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report 52 Hub Research 2015: What s TV Worth Study; April 2015

20 19 (Fig. 19) By creating a device index which multiplies incidence of reported device use by share of total usage for TV, Hub Research pegs the website/pc as the runaway favorite, with Roku, game console and Smart TV rounding out the above-average devices other than the TV screen (Fig. 20) Hub Research 2015: What s TV Worth Study; April 2015 (Fig. 20)

21 20 Freewheel reports that 30% of monetization in 4Q2014 came outside of desktop and laptop environments, bringing the share of viewing outside of traditional digital platforms up about 20% for all of While each device saw double-digit growth in both the quarter and 2014 as a whole, monetization on smartphones and OTT streaming devices exploded, growing 70% and 236% respectively, in 4Q2014. In addition, 4Q2014 was the first in which OTT streaming devices (such a Roku, AppleTV, Chromecast, FireTV, Xbox and PlayStation) combined to account for a larger share of monetization than tablets. Dramatic increases in purchases of streaming media players and slower growth of tablet sales globally demonstrate many viewers prefer the lean-back experience of streaming content onto their television set vs. the smaller tablet screen. 54 TV viewing habits were found to be most closely replicated on OTT devices. Live streams are more likely than other digital video to be viewed on OTT devices, accounting for 37% of live volume, compared to 8% of all viewing. Additionally, 91% of video ad views on OTT devices come during longform and live content. 55 Meanwhile, desktop computers, laptops, and smartphones continue to be used for viewing shorter content. 70% of desktop computer and laptop video ad views and 75% of smartphone video ad views are on content under 20 minutes in duration. Computers and smartphones are used to snack on content through the workday while tablets and OTT devices tend to live in the hone and are binge viewing portals. 56 Confirming these findings, Parks Associates reports that TVs are the preferred platform for movies and TV programs. Computers come second; tablets and mobile phones a distant third. The consumer s first display choice to watch a movie or TV program is generally not a computer, tablet, or mobile phone. Consumers fall back to these options when TV viewing isn t feasible or is too expensive. Further, viewing habits differ little by platform. Regardless of which platform consumers use to watch movies and TV programs, their habits are remarkably similar. They watch the same kind of content (mainstream titles), at the same time (evenings), and in the same locations (living rooms and bedrooms). They also watch a similar balance between previously seen and unseen content (50/50%) and oftentimes watch with family and friends. Alternative platforms provide only slightly less social viewing than the TV. 57 Parks Associates finds that frequency of viewing is directly proportional to screen size (Fig. 21) FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q FreeWheel Video Monetization Report, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q3 2013

22 21 (Fig. 21) Even so, Parks Associates notes that premium content consumption on mobile devices saw sharp increases from , with broadband households reporting that they use the Internet to watch TV shows and moves on a mobile phone/tablet growing from 14% to 27% over the period. 59 comscore identifies the significance of Millennials as early adopters. In 2014, A18-34 reported 19% of TV viewing on computer, 6% on smartphone and 6% on tablet, paving the way for mainstream multiplatform adoption. In fact, 1 out of 6 Millennials did not watch from traditional TV sets in the past month. 60 What does usage look like in terms of time of day and content? Adobe reports that viewers turn to to stream movies, with unique visitor growth up 216% over However, Sports content has over 3 times as many unique visitors as Movie content; Broadcast & Cable content has almost twice as many unique visitors as Movie content Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q ComScore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore 61 U.S. Digital Video Benchmark: Adobe Digital Index 2014 Annual Report

23 22 More recently, Adobe notes that authenticated video starts see a continuation in growth; even during a period without unique landmark sporting events like the Olympics and World Cup. This has led Adobe to conclude that the technology has crossed the chasm and moved into the Early Majority stage. 62 With only 7% of sports authenticated content viewed through a gaming console or OTT device, TV Everywhere viewers are less likely to watch sports programming in the living room, compared to other types of programming, such as movies 14% of which are played through a gaming console or OTT device. movie viewing is more common on an Android device; compared to the rest of the industry. Android share of authenticated movies was 27% in 4Q2014, compared to an industrywide 15% share of all authenticated videos. 63 The highest share of video authentications occurs on Wednesdays, followed by the weekend, observes Adobe in its 1Q 2015 report. The Friday night TV Death Slot is actually a popular time for binge viewing. 64 Do users prefer MVPD-aggregated services or network services? Hub Research finds that TVE (authenticated) use is fairly evenly distributed across MVPD, premium cable, and basic cable sites and apps. Have watched online content from a/an : MVPD (authenticated) 32% Broadcast Network 64% Premium Network (authenticated) 30% Basic Cable Network (authenticated) 26%. In addition to authenticated content, 6% say they ve watched broadcast TV content from a site or app. 65 Websites are the most common form of access across providers (Fig. 22). 66 Accessed through Have watched Website Tablet App (or) Smartphone Connected TV App content from App or Icon MVPD 22% 16% 17% Broadcast 59% 28% 27% Network Premium Network 24% 20% 17% Basic Cable 20% 19% 16% Network (Fig. 22) 62 Adobe Q Digital Video Report, Adobe Digital Index 63 Adobe U.S. Digital Video 2014 Inaugural Report, Adobe Digital Index 64 Adobe Q Digital Video Report, Adobe Digital Index 65 Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

24 23 Websites, then mobile and connected TV apps are the most frequented vehicles for authentication (Fig. 23). 67 (Fig. 23) According to a Discovery Media Consumption Study, among Pay-TV subscribers A18+ over the past year: 25% streamed from a broadcast or cable TV network s own site or app (e.g., NBC.com, BravoTV.com) 15% streamed from a premium TV channel s site or app (e.g., HBO Go, Showtime Anytime) 11% streamed from a cable/satellite provider s site or app (e.g., Xfinity TV, TWC TV) 68 Research performed for natpe/cea found that among SVOD subscribers over the past 6 months: 25% sourced TV programming from a network website 12% sourced from a network app 12% sourced from a TV service provider streaming video app Hub Research, CTAM Wave Four Report, Among P18-64, July Discovery Media Consumption Study, December NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November 2015

25 24 Hub Research also finds that satisfaction is higher with VOD services than with MVPD sites or apps (Fig. 24). 70 (Fig. 24) Viacom reports that TVE helps networks preserve a favorable fan base. 68% have a more favorable impression of networks that offer TVE apps/sites. 71 ISSUES & OPPORTUNITIES What percentage of consumers could use TVE but aren t? Why not? The majority of aware non-users claim that they do not use because watching programs on computers, smartphones and tablets is not enjoyable. 72 Viacom s identified Digerati segment don t see a need for TVE, but also worry about fees and login issues. Reasons Digerati don t use TVE: Simply no need - 34% Worried about costs/fees - 28% Login issues - 23% (32% for Kids) Lack of awareness - 21% Tech concerns - 20% 70 Hub Research 2015: What s TV Worth Study; April Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Parks Associates 2.0: The Next Steps in Multiscreen, March 2014

26 25 Kid concerns - 19% Not offered by provider - 12% Privacy concerns - 9% Don t think it has current episodes - 6% 73 Viacom s Off-Liners don t see a need for TVE either, but also are concerned with screen size and hidden fees. Reasons Off-Liners don t use TVE: Simply no need - 61% Small screen size - 32% (57% of teens vs. 18% of kids) Worried about costs/fees - 26% (39% of teens vs 22% of kids) Tech concerns - 24% Lack of awareness - 17% Kid concerns - 7% Don t think it has current episodes - 7% Privacy concerns - 4% 74 A key inhibitor to use is simply an aversion to watching movies and TV programs on alternative platforms. One-half of those not using say it is because of this. Service providers can do little to change this sentiment. At the same time, a notable portion of subscribers cite problems with the service or a limited understanding of how it works factors the service providers can influence. 75 Viacom found that the top concerns current users have with TVE are tech-related, followed by issues with the content. Tech-related issues with TVE (among Authenticators): Long loading/buffering 24% Crashing/freezing -23% Too many ads I can t skip - 21% Poor video quality - 15% Start/stop issues - 12% Device incompatibility - 12% Poor sound - 11% Content-related issues with TVE (among Authenticators): Episodes disappear - 16% Lacks current episodes - 15% 73 Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q3 2013

27 26 Lacks all seasons - 13% 19% say they have no problems with TVE. 76 Awareness is still a significant issue. Despite the widespread availability of services in the U.S. market, only 24% of pay-tv households in 2013 claimed to have a feature from their pay TV provider which allows users to watch programs on a computer, mobile phone or tablet. This awareness measurement was double the 12% figure found in 2012, and varied by less than 10 percentage points across providers, with DISH at 20% and Comcast/Xfinity at 28% (Fig. 25). 77 (Fig. 25) Awareness grew coming into 2015 but has plateaued in 1Q2015. Hub Research shows aided awareness of TVE among Cable subs A18-64 is flat, with 57% definitely aware (Top Box) after the concept is described, as of July 2015 (Fig. 26) Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Parks Associates 2.0: The Next Steps in Multiscreen, March Hub Research, CTAM Wave Four Report, Among P18-64, July 2015

28 27 (Fig. 26) As Hub Research summarizes, TVE the name is not well known even among TVE users. Neither is the value proposition. As things stand now, Netflix and Hulu stand to benefit from promoting as a brand. Those who claim the strongest understanding of TVE are actually more likely to say it applies to ANY provider including Netflix, Hulu, itunes, and so on. And those who actually use TVE the most are especially likely to say the concept only applies to viewing in transit (heavy TVE users, 12% vs. 6% of the base). What s more, even those who say they re familiar with TVE have less than a consistent definition. Only 1 in 3 (34%) of those who have at least heard of TVE understand TV Everywhere to mean watching TV shows and movies from your cable or satellite service on different devices computer, smartphone or tablet. 79 Viacom research also identified as barriers to overcome TVE s lack of awareness and understanding. Noting no go-to source for discovery, the recommendation in light of the low awareness is to consider all audiences and marketing avenues. Optimizing messaging to alleviate cost concerns and communicate TVE value (content & flexibility) are suggested approaches to improving understanding Hub Research 2015: What s TV Worth Study; April Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, 2014

29 28 What do we know about the authentication process? Over one-half say they must authenticate every time they use the site or each time they watch something. Of note, another 11% say they must authenticate occasionally, but they are not sure when. 81 A majority (57%) of those that watch authenticated video say that they are deterred by the authentication process some of the time. 8% of pay-tv subscribers are deterred by the authentication process on a monthly basis. 82 A number of factors deter subscribers from using authenticated video (Fig. 27). 83 (Fig. 27) The nature of the beast is such that the more often subscribers must authenticate, the more frequently they are deterred from watching video (Fig. 28) Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q3 2013

30 29 (Fig. 28) 4 in 10 have abandoned the log in process for viewing TV shows from any online source, according to Hub Research. The top barriers to entering sign in information are perceived time commitment and forgotten passwords. 85 Making the login process less arduous would have the biggest impact on authenticated online TV use. Changes that would have the biggest impact on adoption: Entering a minimal amount of information 38% Only having to enter your information once, and it is remembered every time 34% Having a better understanding of exactly what shows or movies you d gain access to 31% If by entering your information, you d have access to additional content others can t get 27% If all sites that allow you to watch online asked for your account info, not just certain ones 23% Having just one password that you can use across all online services 23% 86 The authenticated video process causes many headaches for subscribers: 85 Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

31 30 Nearly three quarters of those watching authenticated video say they must authenticate more than once. 43% say they must authenticate every time they use the site; 17% say they must authenticate each time they want to watch something. Nearly one-half of those trying to watch authenticated video say they are deterred from watching video some of the time. Moreover, as usage increases so does the occurrences of deterred viewing. Subscribers are deterred from watching authenticated video for many reasons. 41% are deterred because they do not have access to the content; 38% say the process is too much of a hassle; 34% were unable to complete the authentication process. 87 Only 23% think that the login process for TV content is consistent across sources. More consistency across apps how they work, what they do, the UI would also drive adoption. 60% report that they would be a lot more interested (28%) or a little more interested (32%) if TV apps worked more consistently. 88 Lack of communication and coordination among systems and platforms forces users to launch and authenticate viewing sessions on each device independently. Thus, each platform is its own island experience that is separated from experiences on other platforms. 89 How does TVE fit in with other viewing platforms, what occasions drive usage? More TV is watched live than any other way: Largest share of total TV consumption, at 40% Most common default source for TV, at 38% Most indispensable TV source, at 45% 90 DVR or TiVO, Netflix and Hulu Plus ranked just below live TV as first choice source of programming, in a 2015 survey conducted on behalf of CEA and NATPE, 20% of consumers named service provider apps, and 10% mentioned network apps (Fig. 29) Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Hub Research 2015: What s TV Worth Study; April Parks Associates 2.0: The Next Steps in Multiscreen, March Hub Research 2015: What s TV Worth Study; April NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November 2015

32 31 (Fig. 29) A media consumption study by Discovery conducted in 4Q2014 asked about ways in which viewers had watched a full episode of any TV show in the past year. 55% of pay-tv subscribers reported streaming from any source, and 25% had streamed from a broadcast or cable TV network site or app, while 11% had streamed from a cable/satellite provider s site or app (Fig. 30) Discovery Media Consumption Study, December 2014

33 32 Q4. Please think about your TV viewing during the past year. In which of the following ways have you watched a full episode of any TV show during the past year? Please select all that apply. Total 18+ Pay TV Sub 18+ Base: Live on TV 81% 87% Recorded/from a DVR or Tivo 45% 52% On Video on Demand from your cable/satellite provider 36% 41% From a DVD 38% 37% Any Online Streaming or Purchased Eps [Net] 59% 55% Streamed from a broadcast or cable TV network s own site or app (e.g., NBC.com, BravoTV.com) 27% 25% Streamed from a premium TV channel's site or app (e.g., HBO Go, Showtime Anytime) 14% 15% Streamed from a cable/satellite provider's site or app (e.g., Xfinity TV, TWC TV) 10% 11% Streamed from a free video site/service that offers TV shows from different networks (e.g., Hulu, YouTube) 25% 23% Streamed from a subscription video site/service (e.g., Netflix, Hulu Plus, Amazon Instant Video) 39% 36% Streamed or downloaded from an unofficial or unauthorized source (e.g. BitTorrent, Project Free TV) 7% 7% Purchased episode(s) from an online source (e.g. itunes, Amazon) 9% 9% Other way (please specify) 1% 1% I haven't watched an episode of a TV show during the past year 2% 1% (Fig. 30) Online sources continue to gain traction, however. 74% of MVPD subs use at least one online TV source. And the percent of viewers who say that live TV is their default source is falling, from 50% in 2013 to 38% in serves a variety of purposes. Two-thirds use it for catch-up TV viewing. 52% use it to watch programs when outside the home. 41% use it when the TV set is being used by someone else. 94 users gravitate toward particular use cases, according to Parks Associates. In particular, three groups stand out: Busy Viewers (26%) Use to catch up on missed programs; this group is only interested in the catch-up aspect of viewing and is uninterested in other use cases Travelers(30%) Use outside of the home; in the backseat for the kids, stave off boredom in waiting rooms, catch-up on favorite shows during their commute; changes are even if Travelers had not missed the latest episode of a favorite show, they would still be watching some content on their phone or tablet. The mobility of the service drives their use. 93 Hub Research 2015: What s TV Worth Study; April Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q3 2013

34 33 Maximum Multiscreeners (44%) Have integrated into their lifestyle. Unlike the other two groups, these people use inside their own home when the TV is not available, but they also use it for catch-up purposes and while on the go. This group takes full advantage of every feature, and has the heaviest use among the three groups. 95 Catch-up viewing is the most common TVE use case among consumers: 67% report I watch the programs that I missed at original time of broadcast 52% report I watch the programs when I am outside my home 41% report I watch the programs when somebody else is using the TV 96 comscore found that when viewers are asked why they watch original TV on the Internet, flexibility and convenience rule. 56% indicate that they prefer to watch on their own schedule and 52% indicate that it is more convenient. Further, adoption drivers vary by age, with older viewers (A55+) using online to catch missed episodes (29%), and younger adults (A18-34) preferring fewer ads (13%) or cost savings (12%). 97 Viacom has identified specific content related drivers of TVE usage among Authenticators: Re-watch episodes 31% Start show from 1 st season 22% Only way to watch show 17% Access exclusive content 14% 98 Further, these TVE users report using TVE vs. an app or site without Pay TV login because (top reasons): It has more shows - 42% It has the shows/series I want to watch - 38% It has exclusives - 23% 99 41% of U.S. homes have access to a subscription video-on-demand service like Netflix, up from 36% a year ago Parks Associates 2.0: The Next Steps in Multiscreen, March Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q ComScore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore 98 Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Nielsen: SVOD Services in 41% of U.S. Homes, 3/11/2015 9:00 AM Eastern, Jon Lafayette, Broadcasting & Cable

35 34 In 2014, 34% of U.S. broadband households subscribed to some type of OTT service, an increase of two percentage points from the prior year. 101 Viacom research finds that, after live TV, TVE is as viable a source as VOD, DVR and subscription streaming services. Further, TVE supplements viewing rather than cannibalizing more than half of TVE users now watch more TV. Since starting to use TVE (among authenticators), 64% watch more TV overall (72% of P18-24), and only 36% watch the same amount. 102 In homes with streaming services, usage of TV-connected technology is nearly 50 minutes per day greater than in a typical TV home. 103 YouTube is 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 are also 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 cite this as the reason for their preference for laptops. Some also reference that is has a larger screen than other portable devices. 104 Is TVE being used in place of other platforms or in addition? TVE provides flexibility allowing viewers to watch shows when, where and how they want. Flexibility related drivers of TVE usage (among Authenticators, per Viacom s research): Couldn t watch the show live - 30% Watch away from home - 28% All TVs were being used - 22% Can move around house - 22% Watch a show privately - 15% Use DVR on another device - 14% 105 Parks Associates notes that computers and smartphones marginally contribute to linear video consumption, accounting for only about 10% of linear viewing hours across all platforms. Linear video accounts for roughly 15% of all video consumption on a computer and one-fifth of the video consumed on smartphones Parks Associates 2.0: The Next Steps in Multiscreen, March Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Nielsen: SVOD Services in 41% of U.S. Homes, 3/11/2015 9:00 AM Eastern, Jon Lafayette, Broadcasting & Cable 104 NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Parks Associates Digital Media: Q3 Market Focus: The Death of Linear TV?, Q3 2014

36 35 To what extent does password sharing occur? Research from The Diffusion Group (TDG) reports that more than 20% of adult broadband users that stream video from an online subscription service are cord cheaters, consumers who access these services using the account name and password of someone that does not reside in the same household. The incidence of this for Netflix streaming at 19.9% is similar to that of HBO Go (18%). 107 While it is widely acknowledged that cord cheating is occurring, few comprehend how widespread the behavior has become, noted Michael Greeson, TDG Founder and Director of Research. According to a TDG s latest research, a sizable segment of online subscription video viewers live in households that are not paying to enjoy on-demand access to movies, TV programs, and a host of other high-value video content. Content providers are losing substantial revenue by not enforcing more restrictive authentication procedures. 108 Only 12% say they ve shared account info with a friend or family member that lives somewhere else, however, self-reported credential sharing is twice as high for cable sites and apps as for Netflix (6%). 109 Is TVE driving eyeballs back to linear? In 2014, 51% of viewers A16-74 report having watched a show live that they first discovered online. Among viewers A16-54, this figure is 61% and has not changed significantly vs (64%) % of Millennials watch TV shows on regular TV that they first discovered online % of viewers A13-34, and 41% of total viewers, consider a recommendation from a streaming service based on other things I watch to be a very or somewhat important source of TV programming. 112 PERCEPTIONS, SATISFACTION & EXPECTATIONS What is the consumer perception of? 24% of pay-tv subscribers report having as part of their service up from 16% in Q2/13. The increase in awareness was primarily among subscribers age Nevertheless, awareness is far below the actual number of subscribers that have service. Service providers have generally completed their roll-out of the capability. 107 TDG Press Release: TV Gets Personal: Mobile Video to Account for 20% of Total Viewing by 2025; March 4, 2015; TDG Press Release: TV Gets Personal: Mobile Video to Account for 20% of Total Viewing by 2025; March 4, 2015; Hub Research 2015: What s TV Worth Study; April Citation-L 111 Citation-L 112 NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November 2015

37 36 Pay-TV subscribers do not necessarily associate authenticated video services with their pay-tv provider. One-half of those using authenticated video from their provider monthly report that they do not have services as part of their pay-tv package. 113 Pay-TV subscribers that watch movies and TV programs from alternative sources and on alternative platforms should be prime users of services. In reality, over one-half of them are not even aware that they have access to services. 114 Viacom found that TVE awareness does not equate to really knowing. 68% of all respondents are aware of the TVE concept: Authenticators - 81% Digerati - 61% Off-Liners 42% 115 Asked directly, consumers vary somewhat in the type of online content they think MVPDs offer, but the prevailing sentiment is uncertainty. As far as you know, do MVPDs offer you the ability to: 116 Watch past episodes of TV programs on a computer, through their website 43% Yes / 7% No / 50% Don t Know Watch live TV on a smartphone or tablet while you re at home, through their mobile app 39% Yes / 7% No / 54% Don t Know Watch live TV on a computer while you re at home, through their website 39% Yes / 9% No / 52% Don t Know Watch past episodes of TV programs on a smartphone or tablet, through their mobile app 38% Yes / 10% No / 52% Don t Know Watch live TV on a computer when you re away from home, through their website 35% Yes / 10% No / 55% Don t Know Watch live TV on a smartphone or tablet when you re away from home, through their mobile app 35% Yes / 10% No / 55% Don t Know Viacom further notes that our definition of TVE is not short & sweet: Have you ever heard about TV Everywhere sites/apps that allow you to watch full-length TV shows by logging in with your cable or satellite information? These apps are available on tablets and smartphones, or you would watch on an Internet-connected/Smart TV, video game system/console, computer, or media playing device (like Apple TV, Roku), etc Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Hub Research 2015: What s TV Worth Study; April Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, 2014

38 37 Subscribers won t get much value from if they don t know that it exists. Awareness levels are thankfully increasing, but service providers should make greater efforts to educate their subscribers. Placing more advertisements in billing, price sheets, and websites will help boost awareness. Older subscribers, in particular, are unaware of offerings. 118 Nearly all authenticators agree that TVE adds value to their pay TV subscription and increases loyalty. 98% say TVE adds value to their pay TV subscription; 67% say TVE adds a lot of value. And 93% are more likely to stay with a provider because of TVE. 119 Use of TVE services has had a major impact on consumer engagement and perceptions of an MVPD subscription (base: have watched TV on computer, tablet or smartphone) (Fig. 31). 120 (Fig. 31) Hub Research finds that among all MVPD Subs, 61% report feeling somewhat or a lot more positive about their TV provider because of the availability of TVE services. The impact is especially strong among younger viewers (e.g., Millennials). Among A16-34, 71% report feeling somewhat/a lot more positive and among A35-64, this figure is 55%. 121 The impact is also stronger than average among households with young kids age 5 and under (73% feel somewhat or a lot more positive), and among those HH that say TV is an essential part of their entertainment lives (75% feel somewhat or a lot more positive). 122 The availability of TVE also seems to reduce the appeal of cord-cutting. 83% of heavy TVE users report that availability of TVE services makes them more likely to continue getting service from their MVPD, and 66% of all TVE users report this, whereas the average for all MVPD subscribers is 54% Parks Associates Access & Entertainment Services: Q3 Market Focus. Use & Authentication, Q Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

39 38 48% of non-tve users say that their MVPD subscription is an excellent/good value. 67% of all TVE users report this, as do 82% of heavy TVE Users, 59% of moderate TVE users and 52% of light TVE users. 124 More than half (51%) of cable subs say their cable subscription is more valuable because of TVE % of all MVPD subscribers report that the ability to watch TV content on different devices makes them feel a little or a lot more positive about a cable network. 69% feel a little or a lot more positive about a premium network in light of this ability. 126 What do we know about satisfaction? For viewing sources in general, satisfaction with apps and network sites trails that of more traditional and familiar methods of access, including DVR, SVOD and live TV (Fig. 32). 127 (Fig. 32) Online viewers are happiest watching via Netflix, premium apps and basic cable sites (Fig. 33) Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April Hub Research, CTAM Wave Four Report, Among P18-64, July Hub Research, CTAM Wave Three Report, Among P18-64, February NATPE/CEA Consumer Choice in a Dynamic TV Landscape, November 2015

40 39 (Fig. 33) Device-wise, consumers are more satisfied with watching on a connected TV on a site or app, and give a 7.8 (10 scale) rating for watching on a TV set vs. 7.2 on a smartphone or tablet app and 6.6 on a website. 129 What do viewers want or expect? According to research performed by Viacom, a majority of Authenticators want deep content libraries, the flexibility of a DVR and excellence in functionality: True Flexibility: Start/stop functionality, Watch on any device, Use outside home Wi-Fi; Smart Search: Search for specific show, content organized by genre, create queue/list of favorites; Complete Content: Instant access to recent episodes, old seasons of shows still on air, Old episodes of shows still on air; Custom Logins: Accounts for multiple users, App specific logins 130 Consumers have varying expectations about what content should be available from online sources: Any episode from the current season of a show - 65% Episodes from the network s MOST POPULAR shows - 64% Episodes that are available one week after airing for the first time on live TV - 59% 128 Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April Viacom Strategic Insights & Research, TV, Here, There, (Not Quite) Everywhere, 2014

41 40 Episodes that are available 2-3 days after airing for the first time on live TV - 58% Any episode from the previous season of a show - 52% Episodes that are available immediately after airing for the first time so as soon as they finish on live TV - 46% Any episode from 2-3 seasons ago for a show - 42% Episodes from ALL of the network s shows, current and past - 40% Live episodes, so you can watch at the same time it s on regular TV - 39% Episodes from the network s PAST shows, no longer on the air - 39% Extra content from the network s shows, such as interviews and behind the scenes videos - 29% 131 Consumers are most likely to feel that they would find current episodes on premium and basic cable online sources. 65% would expect to find current season episodes from premium and basic cable networks (vs. Netflix, Broadcast, MVPD, etc.). 64% would expect to find episodes from most popular shows from premium and basic cable networks. They are more likely to expect back catalog episodes from Netflix. 52% expect to find any episode from the previous season on Netflix, and 42% expect to find any episode from 2-3 seasons ago there. 39% also expect to find past shows no longer airing on Netflix. Broadcast online sources (and VOD) are among the last places consumers would expect to find older episodes. 132 In light of these findings, Hub Research suggests that TVE messages emphasizing multiple devices, deep catalog and no additional cost will be most effective (Fig. 34) Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April Hub Research 2015: What s TV Worth Study; April 2015

42 41 (Fig. 34) For premium channel subs, the strongest messages are those focusing on exclusivity and deep catalog (Fig. 35). 134 (Fig. 35) 134 Hub Research 2015: What s TV Worth Study; April 2015

43 42 services still lag other OTT offerings in terms of features, despite advances in quality and availability on mobile devices. As a result, operators and solution providers are focusing on feature improvements to better compete with OTT and to differentiate services. Many TV Everywhere 2.0 features address the user experience and how it will be enhanced in the future. OTT services have consistently maintained an advantage over offerings in content discovery. To date, few pay-tv providers have yet added personalized recommendations to their multiscreen interfaces, but many are expected to do so in the near term. 135 ADVERTISER VALUE & MONETIZATION What s the incremental value of TVE content to the advertiser? According to FreeWheel - the advertising technology company acquired by Comcast last year - authenticated viewing (defined as viewing that occurs after a viewer enters his or her MVPD credentials) accounted for more than half (about 56%) of long-form and live content monetization in the fourth quarter of This represents 591% growth from Q42013 to Q (Fig. 36). 136 (Fig. 36) According to a report from TDG, revenue from OTT TV advertising - that is, commercial advertising placed in full-length TV-quality programming delivered via broadband - is expected to grow nearly four- fold between 2015 and According to TDG s analysis, the average ad load for a 30-minute legacy linear program will decline by 38% between 2014 and 2020, from approximately eight minutes to around five minutes. During the 135 Parks Associates 2.0: The Next Steps in Multiscreen, March Ad Views Jump 591% in Q4: FreeWheel, 2/24/2015 1:00 PM Eastern, Jeff Baumgartner, MultiChannel.com

44 43 same period, average OTT TV ad loads will increase 63%, from 3.2 minutes to 5.1 minutes, during the same time period, bringing OTT TV ad loads in line with that of legacy linear TV (Fig.37). 137 (Fig. 37) This shift in ad load is not all bad for content networks. According to Alan Wolk, TDG senior analyst, the value of legacy linear TV advertising in 2020 will be worth considerably more than today. Wolk adds that new forms of advertising such as native and sponsored promotions will generate additional revenue and keep total TV ad revenue stable through 2020 (no growth in total revenue, but no decline, even as dollars are shifted to OTT TV ). By 2020, OTT TV ad revenue will be approximately $40 billion, just under half of 2020 s projected $85 billion in total TV ad revenue. 138 Observes FreeWheel, Also of interest are the patterns by which viewers consume new seasons of content. 28% of viewing occurs within three days of a show s linear air date, while 64% occurs after a week. While most linear TV ad sales are transacted on the first three days, the fact remains that the vast majority of digital viewers are not beholden to traditional scheduling and are now watching at their own convenience TDG Press Release: TDG: OTT TV Ad Revenue to Increase Four-Fold by 2020; New Report Examines the Future of Video Ads in Long-Form TV Quality-Programming Delivered via Broadband. April 9, 2015, TDG Press Release: TDG: OTT TV Ad Revenue to Increase Four-Fold by 2020; New Report Examines the Future of Video Ads in Long-Form TV Quality-Programming Delivered via Broadband. April 9, 2015, FreeWheel Video Monetization Report, Q4 2014

45 44 Driven by must-watch live streaming and the need for consumers to catch-up on TV series, authenticated, ad viewing soared 591% in the fourth quarter of 2014 versus the yearago quarter, FreeWheel found in its latest report. 140 comscore reports share of ad spending in online video at 9%($7B) expected in 2015 (Fig. 38). 141 (Fig. 38) In the Nielsen Mobile TV Ratings: National Preview Report (July 28-October 19, 2014), it was observed that a greater percentage of potential C3-qualified commercials was viewed on mobile than on TV (Fig. 39). Greater likelihood for C3-qualified ads to be viewed can make mobile an effective ad viewing environments. 142 (Fig. 39) 140 Ad Views Jump 591% in Q4: FreeWheel, 2/24/2015 1:00 PM Eastern, Jeff Baumgartner, MultiChannel.com 141 ComScore Presentation: The Future of TV is Total Video, November Manish Bhatia, Chief Revenue Officer, comscore 142 Nielsen How Mobile Is Changing Media: Findings From Our Total Audience Measurement, July 2014

46 45 Nielsen reports that mobile presents an opportunity for programmers and advertisers to reach elusive younger audiences with TV programs and ads, and specific networks can see markedly different audiences for their programs on mobile vs TV sets - critical to understand their audiences across platforms. Further, publishing to the intended audience has proven to be more accurately accomplished via mobile (Fig. 40). 143 (Fig. 40) According to FreeWheel, Q marked the first quarter in which over half of long-form and live monetization came via authenticated viewing, with this share more than quadrupling (from 13%) vs. the year-prior quarter, a 591% growth rate (Fig. 41). 144 (Fig. 41) 143 Nielsen How Mobile Is Changing Media: Findings From Our Total Audience Measurement, July FreeWheel Video Monetization Report, Q4 2014