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Streaming Media Services: Netflix, Amazon, Hulu, Q1 2014, 2015 & 2016 Youtube and an Ever Growing List of Even Newer Players

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Streaming Media Services: Netflix, Amazon, Hulu, Q1 2014, 2015 & 2016 Youtube and an Ever Growing List of Even Newer Players A Special Report from THE MEDIACENTER With most of the major SVOD services promoting Contending with themselves and being perceived by viewers as “TV networks,” it’s important to understand their effect on Another Challenger total media consumption – and that’s the purpose of this Special Report from THE MEDIACENTER. When you’re “King of the Hill,” challengers, pretenders and wannabes come at you from all sides. For Total Media Consumption: “traditional” TV, it started with videocassettes and videodiscs, then cable and satellite, DVD/Blu-Ray, game Average Time Spent/Adult/Day*, consoles, the DVR, PCs, smartphones and tablets, and now streaming media services: Netflix, Amazon, Hulu, Q1 2014, 2015 & 2016 YouTube and an ever growing list of even newer players. Medium Q1 2014 Q1 2015 Q1 2016 Tablet (App/Web) 0:12 0:19 0:31 Have these disrupters eroded some of TV’s dominance? Smartphone (App/Web) 0:47 1:02 1:39 Certainly, it’s only to be expected. What may be more amazing is that the average time spent per adult per day Internet on PC 0:49 0:48 0:58 with live TV is still more than twice as much as any of the Multimedia device 0:05 0:09 0:13 8 other media measured by Nielsen, including during its Video game console 0:12 0:14 0:14 most recent measurement period, Q1 2016. DVD 0:10 0:09 0:08 Although Nielsen doesn’t include streaming video AM/FM radio 1:54 1:51 1:52 on demand, or SVOD, in the table above, SVODs Time-shifted TV (DVR) 0:32 0:33 0:33 have definitely captured the attention and time of media consumers. It reached 50% penetration of TV Live TV 4:51 4:34 4:31 households during Q1 2016 – according to Nielsen; Total Time 9:32 9:39 10:39 however, HD TV penetration was 94%. Nielsen, Total Audience Report Q1 2016 *hours:minutes www.mediacenteronline.com pg. 2 As one of the many celestial bodies in the Alphabet By the Numbers universe (Google’s parent company), it’s not surprising that YouTube is forecast to have the most over-the-top According to May 2016 data from Strategy Analytics, a (OTT) video services users and the largest penetration research and consulting firm, streaming media services’ rate of the Big 4 OTT service providers for the period first victim appears to be DVDs, as Americans will 2016–2019. increase their spending by 22% for SVOD services during 2016. All video acquisition categories will decrease, except for the purchase of downloads. US OTT Service Users and US Consumer Spending on Service Provider Data, 2016–2019 OTT Service Video, by Format, 2016 2016 2017 2018 2019 Provider Total % Format Total OTT Service Users Spending Change Streaming media services $6.62 B +22% YouTube 176.1 M 180.7 M 184.7 M 187.8 M Purchase DVD $5.67 B -7% Netflix 126.9 M 134.9 M 139.4 M 143.0 M Rent DVD $2.75 B -10% Amazon 73.2 M 79.9 M 85.1 M 88.6 M Purchase download $2.20 B +17% Hulu 67.0 M 73.7 M 78.8 M 82.2 M Rent download $1.84 B -5% Total 186.9 M 191.9 M 196.2 M 199.6 M eMarketer (Strategy Analytics), June 2016 OTT Video Service User Penetration Rate YouTube 94.3% 94.2% 94.1% 94.1% Netflix 67.9% 70.3% 71.0% 71.7% Of maybe even greater significance is that the ubiquitous TV is clearly digital video viewers’ favorite device to Amazon 39.2% 41.6% 43.4% 44.4% watch SVOD content, according to 2015 research from Hulu 35.9% 38.4% 40.2% 41.2% RealityMine. eMarketer, April 2016 Digital Devices Used to View Digital Video Content, March–November 2015 Mobile Desktop/ Digital Video Source TV Device Laptop SVOD (Netflix, Hulu, etc.) 80% 58% 42% Video-sharing site (YouTube, Vine, etc.) 10% 22% 34% Digital download or rental service 3% 3% 4% Other 7% 17% 21% eMarketer (RealityMine), June 2016 www.mediacenteronline.com pg. 3 At approximately half the Netflix rate, a TV channel Audience Loyalty during its original airtime was second, at 16%, followed by DVR or TiVo service, at 15%. These were the first May 2016 research from TDG Research showed that choices of Generation X and Baby Boomer adults. younger adults prefer subscription-based streaming video services instead of traditional pay-TV services ABC/Accenture Strategy conducted a study of the (cable, satellite or Telco-TV) if they were faced with a advertising spending of 20 leading national brands choice of one or the other. Not surprising, these results during a three-year period. The study found that multi- changed with age. (Those responding to the survey were platform TV, which includes linear TV as well as premium broadband users who had access to both traditional TV long-form video content viewed online, creates a halo and subscription-based streaming video services.) effect on search, display and short-form advertising within integrated campaigns. Remove the halo effect, and the average ROI of the digital channels would US Adults’ Preference for TV decrease by 18%. Content Source, May 2016 It’s important to remember that these studies are Age Range Traditional TV Streaming Video focused on people’s preferences while Nielsen’s Q1 18–24 33.8% 66.3% 2016 Total Audience Report reveals people’s actual TV viewing habits – and live TV was first among adults, 25–34 38.2% 61.8% 18–34, compared to the next four preferred media. 35–44 61.0% 39.0% 45–54 68.1% 31.9% 55–64 76.6% 23.4% US Adults, 18–34 Weekly Time* 65+ 77.3% 22.7% Spent with Media, Q1 2016 MediaPost (TDG Research), June 2016 Media Time Live TV 35:13 A separate study from E-Poll Market Research of 1,354 App/Web on smartphone 28:48 participants age 13–54, who had watched a full-length AM/FM radio 21:39 streamed program during the past 6 months, found that Netflix, at 33%, was their first choice to watch a TV Internet on a PC 12:25 program. Similar to the TDG Research results, twice as Game console 7:37 many adults, 18–24, would access Netflix most often Video on a PC 4:58 compared to adults, 50–54. Nielsen, Total Audience Report Q1 2016 *hours:minutes www.mediacenteronline.com pg. 4 An age-group comparison of these two markets match Viewer Insights what other research sources have discovered and that is streaming media services users skew younger. Recent data from our friends at The Media Audit, culled from their comprehensive online consumer surveys in most major US metro areas, provide a more in-depth profile of streaming media services users than the Streaming Media Services Users Nielsen report. by Age, 2016 Streaming 18–34 35–49 50–64 65+ When comparing the Atlanta, GA and Milwaukee- Media Service Racine, WI markets, there are some similarities and interesting contrasts. Maybe, the most telling contrast Atlanta, GA Metro Area is that 49.0% of adults, 18+ in Milwaukee-Racine said Netflix 44.4% 34.4% 17.3% 3.9% they used streaming media services to watch video or Amazon 44.0% 31.1% 19.1% 5.9% TV shows during March 2016 while 30.5% did in Atlanta during October 2015. YouTube 26.5% 47.8% 23.6% 2.2% Hulu 48.1% 28.7% 18.5% 4.4% Although both gender’s in both markets used streaming Milwaukee-Racine, WI Metro Area media services at relatively the same rate – Atlanta: Netflix 48.7% 24.4% 20.2% 6.7% men, 49.4%, and women, 50.6%; Milwaukee-Racine: men, 52.1%, and women, 47.9% – there were significant Amazon 53.7% 21.4% 18.5% 6.4% disparities for each of the four major SVOD services. YouTube 11.9% 56.9% 14.4% 16.8% Hulu 50.3% 22.5% 24.9% 2.2% Streaming Media Services Users* The Media Audit, October 2015 and March 2016 by Service and Gender, 2016 Streaming Atlanta, GA Milwaukee-Racine, WI Although Netflix, Amazon and Hulu follow the same Media Service general pattern in both markets, YouTube is quite Men Women Men Women different. Its highest spike in Atlanta was among adults, Netflix 44.7% 55.3% 49.2% 50.8% 35–49, and adults, 50–64, while in Milwaukee-Racine, it was adults, 65+. Amazon 59.2% 40.8% 50.8% 49.2% YouTube 61.3% 38.7% 87.3% 12.7% Hulu 40.9% 59.1% 35.2% 64.8% The Media Audit, October 2015 and March 2016 *adults, 18+ www.mediacenteronline.com pg. 5 A look at ethnic groups’ share of streaming media Streaming Media Services Users services users in the two markets reveals Atlanta’s greater diversity, with 57.1% of its total population by Income, 2016 European American compared to 76.7% of Milwaukee’s. Streaming <$15K– <$35K– <$50K– $100K+ Notice, once again, YouTube’s contrasting ethnic Media Service $35K $50K $100K breakdown compared to the other services, especially the spikes among African Americans in both markets. Atlanta, GA Metro Area Netflix 15.7% 8.7% 45.4% 30.3% Streaming Media Services Users Amazon 11.1% 8.3% 28.2% 43.3% YouTube 24.0% 30.8% 31.8% 13.5% by Ethnicity, 2016 Hulu 10.2% 11.4% 53.8% 23.5% Streaming European African Latino Asian Milwaukee-Racine, WI Metro Area Media Service American American American American Netflix 18.9% 9.6% 52.5% 19.0% Atlanta, GA Metro Area Amazon 12.8% 8.4% 59.4% 20.4% Netflix 57.3% 22.8% 12.3% 4.9% YouTube 19.4% 57.2% 23.4% <1% Amazon 55.2% 19.1% 11.9% 10.5% Hulu 14.9% 23.0% 51.6% 10.4% YouTube 58.7% 25.4% <1% 16.0% The Media Audit, October 2015 and March 2016 Hulu 57.1% 24.2% 10.0% 1.7% Milwaukee-Racine, WI Metro Area When comparing streaming media services users by Netflix 72.2% 11.4% 11.2% 4.2% education, those with some college, a college degree Amazon 76.3% 9.8% 9.6% 3.8% and/or an advanced degree account for the largest share YouTube 60.9% 39.1% <1% <1% in all categories.
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