NIELSEN TECHNOLOGY SENTIMENTS REPORT

INTRODUCTION It seems like every day new and/or improved technology is welcomed with open arms to early-adopting consumers. Options abound across nearly all platforms televisions, computers, appliances, and more are evolving to become more than single-service electronics. Coupled with readily-available Internet connectivity, we are seeing a metamorphosis in how we interact with our devices. Nielsen Technology Behavior Track is an annual study focused on understanding the ownership and utilization of tech products across the consumer spectrum. HIGHLIGHTS FROM THE MOST RECENT STUDY INCLUDE: TELEVISION IS BECOMING MORE THAN A PASSIVE WATCHING DEVICE AS VIEWING MOVES TO OTHER DEVICES HOUSEHOLDS ARE SPENDING MORE TIME ONLINE CONSUMERS ARE SWITCHING PROVIDERS LESS 2 NIELSEN TECHNOLOGY SENTIMENTS REPORT

TELEVISION BECOMES MORE T H A N A PA S S I V E E N T E R TA I N M E N T OPTION Even in our technology-laden world, the ubiquitous television is still a heavily viewed entertainment and media outlet. Although broadcasting, in general, has not changed much over the years, the technology that compliments the television viewing experience has. Beyond the improvements in broadcast strength and screen resolution, convenience options such as On-Demand, digital video recorders, and streaming content have given consumers more control over what and when they watch much to the frustration of marketers who fear their ads are just noise for viewers to fast forward through. Yet, things might not be so grim after all. According to the study, seven in ten respondents (69%) with subscription cable service indicate they watch between one and nine hours of regular, unrecorded television programming a day an increase over 2012 (67%) but lower than 2011 (73%). This is far more frequently than the reported hours spent watching convenience options. Copyright 2014 The Nielsen Company 3

VIEWING TIME BY PROGRAMMING OPTION 10% 4% 4% 13% 32% HOURS SPENT WATCHING REGULAR TV PROGRAMMING 37% 20% 17% 2% 2% 1% 1% 6% 6% 4% 8% HOURS SPENT WATCHING PRE- RECORDED TV 11% 14% HOURS SPENT WATCHING ON-DEMAND TV HOURS SPENT WATCHING STREAMING CONTENT 44% 53% 56% 21% 13% 16% NEVER 1-3 HOURS/DAY COUPLE TIMES/MONTH 4-9 HOURS/DAY COUPLE TIMES/WEEK 10+ HOURS/DAY 4 NIELSEN TECHNOLOGY SENTIMENTS REPORT

In fact, television s reach is growing outside of the traditional TV set and onto other devices such as personal computers and game consoles. These devices are used not only to access television content, but to compliment it as well. The leading device, the desktop/laptop, is used to view television programming by two in five (40%) respondents with cable subscription service. Furthermore, as two-screen viewing begins to permeate the market (using a device to interact with television programming or the Internet while viewing), the desktop/laptop is again the device of choice by three in ten (29%) for daily use. ALTERNATIVE TELEVISION DEVICES TV VIEWING ON OTHER DEVICES 40% 19% 17% 16% DESKTOP/ LAPTOP GAME CONSOLE TABLET MOBILE TWO SCREEN TV VIEWING 29% 16% 14% 42% 64% 67% NEVER DAILY Copyright 2014 The Nielsen Company 5

ONLINE TIME AND ACCESSIBILITY IS INCREASING As with the television s omnipresence, the Internet is not far behind. On top of faster speeds provided by greater bandwidth connections, consumers and businesses alike enjoy Internet access nearly everywhere they go. It may come as no surprise that over one in three (35%) respondents indicate their household spends 21 hours or more online every week only a slight uptick from 2012 (33%) but a larger difference from 2011 (27%). HOUSEHOLD HOURS ONLINE PER WEEK 21+ HOURS 11-20 HOURS 6-10 HOURS 3-5 HOURS 1-2 HOURS 0-1 HOURS 35% 24% 20% 13% 6% 2% With the increasing amount of time spent connected to the Internet in households, it should also come as no surprise that half (50%) of online consumers indicate they access their in-home, wireless network on a daily basis. This is far above the proportions indicated for daily access via mobile networks and/or free and fee-based Wi-Fi. Considering the interconnectedness of our technology-infused lives and the devices that can now connect to the Internet outside traditional PCs/laptops (from smart televisions for accessing Internet content to refrigerators that contact food delivery suppliers when you run out of milk), this heavy home Wi-Fi use could be a sign to proponents of the Internet of Things that the movement is not far from mainstream. 6 NIELSEN TECHNOLOGY SENTIMENTS REPORT

However, mobile Wi-Fi and free hot spot Wi-Fi still hold a place in the consumer s options to access the Internet as well. While respondents indicate less frequent daily use, nearly half indicate some amount of usage for each technology. Conversely, fee-based Wi-Fi hot spots see very little use, which could be attributed to either their declining existence or the fact that non-fee-based options are readily available in the same locations. WIRELESS ACCESS USE OF WI-FI OPTIONS 75% 7% 48% 11% 52% 23% 32% 50% 6% 3%3% FEE-BASED HOT SPOT 6% FREE HOT SPOT 9% 7% 16% 9% MOBILE CARRIER WI-FI 5% 3% 4% 14% HOME NETWORK WI-FI 3% 2% 3% 10% TODAY/YESTERDAY 2-3 MONTHS AGO PAST WEEK >3 MONTHS 2-4 WEEKS AGO NEVER USUALLY ACCESS WI-FI VIA 70% 47% 36% 29% LAPTOP MOBILE TABLET DESKTOP Copyright 2014 The Nielsen Company 7

CONSUMERS KEEPING THEIR SERVICE PROVIDERS Today s consumer has plenty of options at their disposal when it comes to the technology they purchase. Yet many products, such as televisions and mobile phones, would be little more than pricey dust collectors without the services they need to operate fully. As providers vie back and forth to gain membership, consumers are presented with several incentives to switch be it better contracts (or sometimes no contracts), waived fees, and/or limited time promotions. With so many seemingly attractive reasons to switch, it is intriguing to learn that so few are actually doing so in recent months. TELEVISION SWITCHING SWITCHED (PAST 6 MOS.) 9% 35% REASONS FOR SWITCHING 17% 16% 15% 14% 14% PRICE MOVED HIGHER QUALITY SVC. REC. PROMO/ REBATE VARIETY OLD PROMO ENDED 8 NIELSEN TECHNOLOGY SENTIMENTS REPORT

INTERNET SWITCHING SWITCHED (PAST 6 MOS.) 9% 31% REASONS FOR SWITCHING 20% 19% 16% 11% 10% PRICE FASTER SPEED MOVED HIGHER QUALITY SVC. POOR SVC. OLD PROMO ENDED MOBILE SWITCHING SWITCHED (PAST 6 MOS.) 7% 44% REASONS FOR SWITCHING 20% 16% 16% 15% 15% PRICE COVERAGE RELIABILITY HIGHER QUALITY SVC. POOR SVC. CONTRACT TERMS Copyright 2014 The Nielsen Company 9

One in ten (9%) respondents with service indicated they switched their television provider in the past six months; the same seen for Internet providers, but slightly more than mobile providers (7%). Each of the three provider service areas is dominated by only a few major entities and switching seems to mostly occur between them. However, television and Internet providers, both of whom have sizable membership in local/ regional companies ( Other Provider in charts), are possibly seeing these members leave in favor of the national-scale organizations, too. So what is pushing these consumers to switch? While the most often cited reason across all three service areas is most frequently better price, many television and Internet switchers indicated that moving was a reason. This can be seen as both good news and bad news to these providers indeed they are losing membership, but not for lack of customer satisfaction and/or loyalty. Mobile service providers, dominated almost exclusively by the Big 4, do not elicit the same switching rationale (i.e. moving ) since most offer nationwide service coverage. CONCLUSION Nielsen Technology Behavior Track reveals two areas of concern among marketers and service providers, mainly ad reach in an On-Demand world and provider switching, may not be prevalent after all. Few respondents have switched service providers in the past six months and most indicate their viewing time is spent on live, ad-supported programming. While this may mean that business as usual is still an option for tech-industry players, those that want to stay relevant in the future marketplace will be those that recognize and build products for our always-online lifestyles. METHODOLOGY Nielsen Technology Behavior Track is a survey conducted annually, collecting consumer-level data on behaviors related to home technology use. Approximately 32,000 respondents, sampled to be nationally representative, participate. For more information please contact your Nielsen representative. 10 NIELSEN TECHNOLOGY SENTIMENTS REPORT

ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com. Copyright 2014 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 14/7525 Copyright 2014 The Nielsen Company 11

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