EXPERIENCE FIRST

MARKET RESEARCH THE STATE OF ONLINE VIDEO 2018 The State of Online Video is Limelight Networks’ latest in a series of surveys that explore consumer perceptions and behaviors around digital content THE STATE OF ONLINE VIDEO 2018 LIMELIGHT NETWORKS | EXPERIENCE FIRST

TABLE OF CONTENTS

Overview ...... 4 Executive Summary ...... 5 Key Findings ...... 6 Online Video Consumption Is Growing ...... 6 Broadcast Video Viewing ...... 8 Movies and TV Shows Are the Most Popular Content ...... 11 Viewers Want Realtime Sports Streaming ...... 13 Computers and Smartphones Are the Primary Viewing Devices ...... 14 Adoption of Dedicated Streaming Devices ...... 16 Most Viewers Subscribe to SVOD Services ...... 17 Price is the Primary Reason to Cancel SVOD Services ...... 19 Most Online Viewers Also Subscribe to Cable ...... 19 Price is the Primary Reason for Cancelling Cable ...... 20 Viewers Discover Content By Browsing Streaming Sites ...... 21 Most Viewing Happens at Home ...... 22 Viewers Binge-Watch for Two Hours At a Time ...... 23 Viewers Are Most Accepting of Pre-Roll Advertising ...... 24 Video Rebuffering Is the Primary Viewing Frustration ...... 28

Conclusions and Recommendations ...... 31 Appendix ...... 32 Methodology ...... 33 About Limelight Networks ...... 33 Figures Figure 1: How many total hours of video content do you watch online each week? 2016-2018 ...... 6 Figure 2: How many total hours of video content do you watch online each week? 2018 ...... 6 Figure 3: How many total hours of video content do you watch online each week? ...... 7 Figure 4: How many total hours of video content do you watch online each week? ...... 7 Figure 5: How many total hours of video content do you watch online each week? ...... 7 Figure 6: How many total hours of video content do you watch online each week? ...... 8 Figure 7: How many total hours of video do you watch each week? ...... 8 Figure 8: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week? . . . . 9 Figure 9: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week? . . . . 9 Figure 10: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week? . . . 10 Figure 1 1: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week? . . . 10 Figure 12: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4) ...... 11 Figure 13: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4) ...... 11 Figure 14: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4) ...... 12 Figure 15: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4) ...... 12 [email protected] | limelight.com 2 THE STATE OF ONLINE VIDEO 2018 LIMELIGHT NETWORKS | EXPERIENCE FIRST

Figure 16: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast? ...... 13 Figure 17: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast? ...... 13 Figure 18: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast? ...... 14 Figure 19: How much of your online video viewing is on the following devices? (Scale 0-4) ...... 14 Figure 20: How much of your online video viewing is on the following devices? (Scale 0-4) ...... 15 Figure 21: How much of your online video viewing is on the following devices? (Scale 0-4) ...... 15 Figure 22: How much of your online video viewing is on the following devices? (Scale 0-4) ...... 15 Figure 23: Which streaming devices do you use to watch online video on your television? (Select all that apply) . . . 16 Figure 24: Which streaming devices do you use to watch online video on your television? (Select all that apply) . . . 16 Figure 25: Which streaming devices do you use to watch online video on your television? (Select all that apply) . . 17 Figure 26: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to? ...... 17 Figure 27: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to? ...... 18 Figure 28: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to? (Cable & satellite TV subscribers vs . non-subscribers) ...... 18 Figure 29: Which of the following is most likely to cause you to cancel your subscription to an online streaming service? ...... 19 Figure 30: Do you currently subscribe to a cable or satellite provider for your television service? ...... 19 Figure 31: Do you currently subscribe to a cable or satellite provider for your television service? ...... 20 Figure 32: Which of the following is most likely to make you terminate your cable or satellite television subscription? ...... 20 Figure 33: Which of the following is most likely to make you terminate your cable or satellite television subscription? ...... 21 Figure 34: How do you typically learn about new series and movies that you want to stream online? ...... 21 Figure 35: How do you typically learn about new series and movies that you want to stream online? ...... 22 Figure 36: How often do you watch online video from the following locations? (Scale 0-4) ...... 22 Figure 37: How long do you typically spend binge watching an online series in one sitting? ...... 23 Figure 38: How long do you typically spend binge watching an online series in one sitting? ...... 23 Figure 39: How long do you typically spend binge watching an online series in one sitting? ...... 24 Figure 40: I’m okay with advertising in online video as long as I’m interested in it ...... 24 Figure 41: I’m okay with advertising in online video as long as I’m interested in it ...... 25 Figure 42: I’m okay with advertising in online video as long as I can skip it ...... 25 Figure 43: I’m okay with a short advertisement before the video if the content is free ...... 26 Figure 44: I’m okay with multiple advertisements during a longer video if the content is free ...... 27 Figure 45: What is the most frustrating aspect of watching video online? ...... 28 Figure 46: How many times will you let an online video rebuffer before you stop watching and abandon it? . . . . 28 Figure 47: How many times will you let an online video rebuffer before you stop watching and abandon it? . . . . 29 Figure 48: How many times will you let an online video rebuffer before you stop watching and abandon it? . . . . 29 Figure 49: How many times will you let an online video rebuffer before you stop watching and abandon it? . . . . 30 Figure 50: How many times will you let an online video rebuffer before you stop watching and abandon it? . . . . 30 Figure 51: How old are you? ...... 32 Figure 52: What is your gender? ...... 32

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OVERVIEW

The State of Online Video 2018 research report highlights the latest findings in an ongoing series of consumer surveys about online viewing habits and opinions . This report is based on responses from 5,000 consumers in France, Germany, India, Italy, Japan, Philippines, Singapore, South Korea, the United Kingdom, and the United States age 18 and older who watch one hour or more of online video content each week . Highlights of findings include:

• Viewers are watching more online content . On average they spend six hours, 45 minutes per week watching various types of online video, an increase of one hour in the last year, and almost two and a half hours since 2016 .

• People still watch more video from traditional broadcast sources than they do online, with global viewers watching just over eight hours of broadcast television each week .

• Movies are the most commonly streamed type of online content, followed by TV shows, news, sports, professionally produced video content on social media sites, user-generated content, and online gaming videos .

• Men prefer to watch movies, while women watch TV shows most often . Viewers 18-25 prefer to watch TV shows, while older ones choose movies .

• Almost 60 percent of people would be more likely to watch live sports online if the stream was not delayed from the broadcast .

• Computers are the primary device chosen to watch online video, followed by smartphones, smart TVs and connected devices, and tablets .

• Nearly 60 percent of online viewers subscribe to one or more subscription video on-demand (SVOD) services . Cable and satellite TV subscribers have more SVOD services than those without cable .

• More than half of global consumers said price was the primary reason they would cancel a SVOD service . • 62 percent of people who watch online video also subscribe to a cable or satellite television service . Price is the primary reason consumers would cancel their cable or satellite television subscriptions .

• Viewers binge-watch shows for an average of two hours, seven minutes at a time . Almost half watch for three hours or more hours at a time .

• Video rebuffering (when the video pauses during playback so it can reload) remains the most frustrating aspect of online viewing . After a second video rebuffer, nearly two-thirds of viewers will stop watching .

• Expectations for online video performance have risen and patience has dropped . The average number of times a viewer will let a video rebuffer before they stop watching has dropped from 2 7. times in 2016 to 2 .2 times in 2018 .

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EXECUTIVE SUMMARY

Online video is gaining in popularity around the world . In just the last year, the average weekly viewing time increased one hour to six hours, 45 minutes . Viewers in the Philippines, India, and the U .S . already exceed eight and a third hours per week . People age 18-25 watch an average of almost nine and a quarter hours weekly, with 31 percent of them watching 10 or more hours . Consumers who watch online video still spend more time watching traditional broadcast, cable, and satellite television each week, at an average of just over eight hours . However, for audiences age 35 and younger, the majority of their viewing is online .

Movies are the most commonly watched type of online content . However, women and viewers under 25 prefer to watch television shows . Sports were the fourth most-watched type of online content . However, the majority of people said they would be more likely to watch sports online if they knew the online stream was not delayed from the broadcast feed .

Computers are the primary device used for online viewing globally, but smartphones are preferred by viewers in India, Philippines, Singapore, South Korea and the U .S . as well as people under 46 . For watching streaming video on a TV, viewers prefer to use a smart TV rather than a dedicated streaming device .

Almost 60 percent of global online viewers subscribe to a SVOD service . Subscription rates are highest in the U .S . where online viewers have an average of 1 .6 services . Contrary to industry fears of viewers “cutting the cord” and relying on SVOD services, cable and satellite subscribers have 70 percent more SVOD services than non-cable subscribers . More than half of consumers said price was the primary reason they would cancel an SVOD subscription, almost the same rate that noted price as the primary reason to cancel their cable subscription .

Viewers watch online video from home more often than any other location . With so much content available online, they most often rely on a streaming service’s website to decide what to watch . When viewers find a new show they’re excited about they spend slightly more than two hours at a time “binge-watching ”.

Performance and quality expectations are rising for online content . Video rebuffering remains the most frustrating aspect of online viewing for 43 percent of global consumers . In fact, 29 percent of viewers will stop watching a video the first time it rebuffers, with an additional 37 percent dropping off after the second time . The average number of times a viewer will let a video rebuffer before they stop watching has dropped 19 percent in the last two years from 2 7. times in 2016 to 2 .2 in 2018 .

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KEY FINDINGS ONLINE VIDEO CONSUMPTION IS GROWING

Online video viewing continues to gain momentum . Globally, people who watch online video spend an average of six hours, 45 minutes per week watching various types of content . Viewing time has grown by one hour in the last year, and almost two and a half hours since 2016 .

8.00

7.00 6.75

6.00 5.75

5.00 4.28 4.00

3.00

2.00

1.00

0.00 2016 2017 2018 Figure 1: How many total hours of video content do you watch online each week? 2016-2018

Nearly a third of viewers (32 1. percent) watch between one and two hours per week . Almost the same number of people (31 .0 percent) watch seven or more hours each week, with 19 .2 percent watching 10 or more hours .

35% 32.1% 30%

25% 20.7% 20% 16.2% 15% 11.8% 10.5% 10% 8.7%

5%

0% 1-2 hours 2-4 hours 4-7 hours 7-10 hours 10-20 hours More than per week per week per week per week per week 20 hours per week

Figure 2: How many total hours of video content do you watch online each week? 2018

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Viewers in the Philippines watch the most online video each week at 8 hours, 46 minutes, followed closely by viewers in India and the U .S . who watch nearly eight and a half hours weekly .

10.00

9.00 8.77 8.46 8.21 8.38 8.00

7.00 6.75 6.29 6.00 5.87 5.85 5.45 5.04 5.17 5.00

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3.00

2.00

1.00

0.00 France Germany India Italy Japan PhilippinesSingapore South Korea U.K. U.S. Global

Figure 3: How many total hours of video content do you watch online each week?

Younger viewers watch the most online video . Viewers age 18-25 watch an average of nine hours, 13 minutes per week, with almost 15 percent watching more than 20 hours per week . Viewers over 60 watch less than four and a half hours of online video per week, with more than half watching less than two hours weekly .

More than Average 1-2 hours 2-4 hours 4-7 hours 7-10 hours 10-20 hours Ages 20 hours hours per week per week per week per week per week per week per week 18-25 15 .5% 19 .8% 20 .3% 13 .5% 16 .3% 14 .7% 9.21 26-35 19 .5% 20 .4% 16 .3% 15 .7% 14 .8% 13 .3% 8.68 36-45 26 .3% 21 .9% 18 .8% 14 .4% 10 .3% 8 .3% 6.94 46-60 41 .5% 20 .5% 14 .7% 9 .6% 8 .0% 5 .8% 5.50 Over 60 51 .0% 20 .6% 12 .2% 6 .8% 5 .3% 4 .2% 4.46 All Ages 32.1% 20.7% 16.2% 11.8% 10.5% 8.7% 6.75 Figure 4: How many total hours of video content do you watch online each week?

Men watch an average of 30 more minutes of online video each week than women .

More than Average 1-2 hours 2-4 hours 4-7 hours 7-10 hours 10-20 hours Gender 20 hours hours per week per week per week per week per week per week per week Male 30 .0% 20 .9% 15 .9% 13 .2% 10 .7% 9 .3% 7.00 Female 34 .3% 20 .5% 16 .4% 10 .4% 10 .3% 8 .1% 6.49 All 32.1% 20.7% 16.2% 11.8% 10.5% 8.7% 6.75

Figure 5: How many total hours of video content do you watch online each week?

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Male Female 40%

35% 34.3% 30.0% 30%

25% 20.9% 20.5% 20% 15.9% 16.4% 15% 13.2% 10.4% 10.7% 10.3% 10% 9.3% 8.1%

5%

0% 1-2 hours 2-4 hours 4-7 hours 7-10 hours 10-20 hours More than 20 hours per week per week per week per week per week per week

Figure 6: How many total hours of video content do you watch online each week?

BROADCAST VIDEO VIEWING

In this year’s survey, online viewers were asked how many hours of video on broadcast, cable, or satellite TV are watched each week . As expected, people still watch more video from traditional broadcast sources than they do online, with global viewers watching just over eight hours of broadcast television each week .

Average hours of online video Average hours of broadcast video 12.00 10.33 10.00 9.83 9.38 8.77 8.46 8.21 8.46 8.38 8.13 8.03 8.00 7.51 7.84 6.83 6.29 6.75 5.96 6.07 6.00 5.45 5.87 5.85 5.04 5.17

4.00

2.00

0.00 France Germany India Italy Japan Philippines Singapore South Korea U.K. U.S. Global

Figure 7: How many total hours of video do you watch each week?

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The U .S . had the highest level of weekly broadcast television viewing at 10 hours, 20 minutes per week . Viewers in India, Philippines, and Singapore spend more time each week watching online video than traditional broadcast television . France and Italy had the greatest gap between online and broadcast viewing, with people watching almost four more hours of broadcast television than online video content . Japan had the highest rate of online viewers who do not watch traditional broadcast television at 22 .2 percent . India and Italy tied for the most online viewers who also watch broadcast television at 96 .0 percent .

I do not watch 10-20 More than Average broadcast, 1-2 hours 2-4 hours 4-7 hours 7-10 hours Country hours 20 hours hours cable, or per week per week per week per week per week per week per week satellite TV

France 11 .8% 10 .8% 14 .8% 15 .6% 14 .4% 14 .6% 18 .0% 9.38 Germany 10 .0% 24 .4% 19 .0% 12 .6% 10 .8% 15 .2% 8 .0% 6.83 India 4 .0% 14 .4% 17 .2% 19 .2% 19 .4% 17 .6% 8 .2% 8.13 Italy 4 .0% 12 .2% 12 .6% 18 .0% 17 .0% 22 .2% 14 .0% 9.83 Japan 22 .2% 20 .0% 17 .4% 13 .4% 9 .0% 8 .6% 9 .4% 5.96 Philippines 8 .8% 16 .2% 21 .0% 18 .8% 12 .0% 12 .2% 11 .0% 7.51 Singapore 17 .0% 17 .8% 19 .0% 16 .8% 12 .4% 10 .0% 7 .0% 6.07 South Korea 4 .8% 17 .4% 22 .2% 17 .4% 12 .8% 14 .8% 10 .6% 7.84 U.K. 12 .8% 17 .0% 12 .8% 14 .6% 11 .8% 17 .4% 13 .6% 8.46 U.S. 11 .8% 10 .8% 12 .0% 13 .4% 13 .4% 17 .2% 21 .4% 10.33 Global 10.7% 16.1% 16.8% 16.0% 13.3% 15.0% 12.1% 8.03

Figure 8: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week?

Older viewers watch more traditional broadcast television that younger ones, with those age 36 and older watching at least two hours more per week than those 18-25 . Surprisingly, viewers over 60 have the highest rate of people who do not watch broadcast television as well as the highest rate of people who watch more than 20 hours per week .

I do not watch 10-20 More than Average broadcast, 1-2 hours 2-4 hours 4-7 hours 7-10 hours Age hours 20 hours hours cable, or per week per week per week per week per week per week per week satellite TV

18-25 13 .1% 17 .9% 21 .0% 20 .1% 11 .1% 9 .5% 7 .3% 6.19 26-35 9 .0% 15 .0% 17 .9% 18 .2% 14 .2% 15 .1% 10 .7% 7.90 36-45 7 .2% 14 .0% 17 .0% 17 .4% 16 .0% 16 .6% 11 .9% 8.49 46-60 10 .2% 17 .4% 15 .0% 13 .3% 14 .1% 16 .2% 13 .9% 8.54 Over 60 16 .2% 16 .6% 15 .2% 13 .1% 9 .2% 14 .9% 14 .8% 8.14 All Ages 10.7% 16.1% 16.8% 16.0% 13.3% 15.0% 12.1% 8.03

Figure 9: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week?

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Men watch 47 minutes more broadcast television each week than women do .

9.00 8.41 8.00 7.63

7.00

6.00

5.00

4.00

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2.00

1.00

0.00 Male Female Figure 10: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week?

Male Female 20%

18% 17.6% 16.8% 16.7% 16.1% 16% 15.4% 15.3% 15.8% 14.4% 14.1% 14% 13.1% 12.1% 12% 11.5% 11.1% 10.0% 10%

8%

6%

4%

2%

0% I do not watch 1-2 hours 2-4 hours 4-7 hours 7-10 hours 10-20 hours More than 20 broadcast, cable, per week per week per week per week per week hours per week or satellite TV

Figure 11: How many total hours of video content do you watch on broadcast, cable, or satellite TV each week?

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MOVIES AND TV SHOWS ARE THE MOST POPULAR CONTENT

Movies are the most commonly streamed type of online content, followed by TV shows, news, sports, professionally produced video content on social media sites, user-generated content, and online gaming videos .

2.20 2.00 1.88 1.80 1.76 1.60 1.54

1.40 1.29 1.26 1.20 1.11 1.00 0.72 0.80 0.66 0.60 0.40 0.20 0.00 Movies TV ShowsNews Sports Watching User-generated Professionally Other Content people play Content (not produced video video games professionally content on social online produced such as media sites video blogs such as Facebook, (vlogs) and Twitter or home videos) Snapchat Figure 12: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4)

Movies are the most commonly watched content in France, India, Italy, Philippines, and Singapore . TV shows are most popular in Japan, South Korea, the U .K . and the U .S . News barely edged out movies as the most popular content in Germany . Sports have the highest popularity in India and South Korea, while professionally produced content on social media sites and user-generated content have their highest viewership in the Philippines .

User-Generated Professionally Watching Content (not produced video TV people play professionally content on social Other Country Movies News Sports Shows video games produced such as media sites such as Content online video blogs (vlogs) Facebook, Twitter and home videos) or Snapchat

France 1 .77 1 .34 1 .23 0 .97 0 .59 1 .07 1 .06 0 .59 Germany 1 .47 1 .19 1 .48 1 .10 0 .63 1 .10 1 .08 0 .78 India 2 .10 2 .00 2 .03 1 .82 0 .90 1 .32 1 .73 0 .91 Italy 2 .10 1 .46 1 .71 1 .40 0 .60 1 .36 1 .33 0 .61 Japan 1 .38 1 .39 0 .94 0 .84 0 .41 0 .59 0 .56 0 .38 Philippines 2 .42 2 .09 2 .03 1 .59 0 .96 1 .39 1 .95 0 .90 Singapore 1 .87 1 .83 1 .61 1 .15 0 .73 1 .03 1 .28 0 .55 South Korea 2 .04 2 .30 1 .91 1 .75 1 .08 1 .27 1 .40 0 .80 U.K. 1 .62 1 .93 1 .07 0 .99 0 .45 0 .82 0 .82 0 .45 U.S. 1 .97 2 .09 1 .37 1 .30 0 .80 1 .17 1 .34 0 .61 Global 1.88 1.76 1.54 1.29 0.72 1.1 1 1.26 0.66

Figure 13: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4) [email protected] | limelight.com 11 THE STATE OF ONLINE VIDEO 2018 LIMELIGHT NETWORKS | EXPERIENCE FIRST

Viewers 18-25 prefer to watch TV shows, while older ones choose movies . Online news and sports viewership is highest among people 26-35 . Online video gaming, user-generated content, and professional videos on social media sites are primarily watched by younger viewers .

User- Generated Professionally Watching Content (not produced video TV people play professionally content on social Other Age Movies News Sports Shows video games produced such as media sites such as Content online video blogs (vlogs) Facebook, Twitter and home videos) or Snapchat

18-25 1 .95 2 .00 1 .36 1 .17 1 .11 1 .57 1 .64 0 .81 26-35 2 .14 2 .06 1 .68 1 .55 1 .11 1 .47 1 .62 0 .92 36-45 2 .00 1 .85 1 .64 1 .46 0 .90 1 .24 1 .38 0 .80 46-60 1 .75 1 .59 1 .51 1 .18 0 .43 0 .89 1 .05 0 .52 Over 60 1 .56 1 .39 1 .42 1 .04 0 .19 0 .55 0 .72 0 .29 All Ages 1.88 1.76 1.54 1.29 0.72 1.1 1 1.26 0.66

Figure 14: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4)

Men prefer to watch movies, while women watch TV shows most often . News, sports, and video games are watched more often by men, while women are more likely to watch user-generated content and professional videos on social media sites .

User- Generated Professionally Watching Content (not produced video TV people play professionally content on social Other Gender Movies News Sports Shows video games produced such as media sites such as Content online video blogs (vlogs) Facebook, Twitter and home videos) or Snapchat

Male 1 .88 1 .63 1 .58 1 .55 0 .77 1 .08 1 .17 0 .67 Female 1 .87 1 .90 1 .50 1 .02 0 .66 1 .15 1 .34 0 .65 All 1.88 1.76 1.54 1.29 0.72 1.1 1 1.26 0.66

Figure 15: How much of your online video viewing time is spent watching the following types of content? (Scale 0-4)

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VIEWERS WANT REALTIME SPORTS STREAMING

More sporting events are now available online, making it easier for fans to join the action from anywhere . However, the inherent delays in traditional live online streaming mean events are generally delayed by 30 seconds or more from the broadcast feed . With the proliferation of people using social media while watching live sports, this has led to a phenomenon where online viewers experience “spoilers” where they learn about big plays from social media before seeing the action online . To better understand how this impacts viewers’ streaming of online sports, viewers were asked if they would be more likely to watch live sports online if they knew there was no delay from the television broadcast .

Globally, 59 .5 percent said they would be more likely to watch live sports online if the stream was not delayed from the broadcast .

Country Yes No France 62 .6% 37 .4% Germany 47 .4% 52 .6% India 78 .8% 21 .2% Italy 69 .4% 30 .6% Japan 44 .4% 55 .6% Philippines 70 .8% 29 .2% Singapore 56 .2% 43 .8% South Korea 70 .4% 29 .6% U.K. 41 .8% 58 .2% U.S. 53 .4% 46 .6% Global 59.5% 40.5%

Figure 16: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast?

More than 65 percent of people 26-45 would stream more sports online if it was not delayed from the broadcast .

Yes No 80%

70% 67.0% 65.1% 59.5% 60% 56.2% 56.8% 50.7% 50% 49.3% 43.8% 43.2% 40.5% 40% 34.9% 33.0% 30%

20%

10%

0% 18-25 26-35 36-45 46-60 Over 60 All Ages Figure 17: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast?

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Almost two-thirds of men would be more likely to stream a live sporting event online if there was no delay from the broadcast feed .

Gender Yes No Male 65 .8% 34 .2% Female 52 .9% 47 1%. All 59.5% 40.5%

Figure 18: Would you be more likely to stream a live sporting event online if you knew it wasn’t delayed from the TV broadcast?

COMPUTERS AND SMARTPHONES ARE THE PRIMARY VIEWING DEVICES

Globally, computers are the primary device viewers use to watch online video, followed by smartphones, smart TVs and connected devices, and tablets .

2.50 2.10 1.91 2.00

1.44 1.50 1.03 1.00

0.50 0.49

0.00 Computer Smartphone Tablet Smart TV or Other connected device device Figure 19: How much of your online video viewing is on the following devices? (Scale 0-4)

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While computers are the primary viewing device in France, Germany, Italy, Japan, and the U .K ., smartphones are preferred in India, Philippines, Singapore, South Korea, and the U .S . In the U .S ., smartphones were narrowly preferred over computers and smart TVs .

Smart TV or Country Computer Smartphone Tablet Other device connected device France 2 .38 1 .29 0 .72 0 .88 0 .30 Germany 2 .23 1 .54 1 .05 1 74. 0 .40 India 2 .11 2 .68 1 .08 1 .54 0 .75 Italy 2 .13 1 .95 1 .05 1 .44 0 .47 Japan 1 .83 1 .51 0 .73 0 .69 0 .27 Philippines 2 .34 2 .55 1 .38 1 .55 0 .68 Singapore 2 .15 2 .20 1 .07 1 .50 0 .33 South Korea 2 .11 2 .20 1 .03 1 .48 0 .63 U.K. 1 .84 1 .25 1 .01 1 70. 0 .44 U.S. 1 .91 1 .92 1 .20 1 .90 0 .63 Global 2.10 1.91 1.03 1.44 0.49

Figure 20: How much of your online video viewing is on the following devices? (Scale 0-4)

Younger viewers have a clear preference for smartphones, while older ones choose computers .

Smart TV or Age Computer Smartphone Tablet Other device connected device 18-25 2 .20 2 .75 0 .98 1 .33 0 .59 26-35 2 .15 2 .49 1 .28 1 .73 0 .68 36-45 2 .07 2 .11 1 .24 1 .68 0 .59 46-60 2 .06 1 .57 0 .90 1 .32 0 .37 Over 60 2 .08 0 .90 0 74. 1 .10 0 .25 All Ages 2.10 1.91 1.03 1.44 0.49

Figure 21: How much of your online video viewing is on the following devices? (Scale 0-4)

Men use computers more than any other device to view online video, while women prefer smartphones .

Smart TV or Gender Computer Smartphone Tablet Other device connected device Male 2 .23 1 .78 1 .02 1 .43 0 .52 Female 1 .96 2 .05 1 .05 1 .45 0 .46 All 2.10 1.91 1.03 1.44 0.49

Figure 22: How much of your online video viewing is on the following devices? (Scale 0-4)

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ADOPTION OF DEDICATED STREAMING DEVICES

Consumers have many choices for streaming video to a television . Globally, viewers choose smart TVs more often than any other device, followed by a set-top box or DVD player, Google Chromecast, Amazon Fire TV, video game consoles, Apple TV, and Roku . One third don’t use any dedicated streaming devices .

40%

35% 33.3% 30.8% 30%

25%

20% 18.2% 16.7% 15% 14.7% 13.7% 10.1% 10%

5% 4.6% 4.1%

0% Amazon Apple TV Google Roku Set-top box Smart TV Video game Other I don’t use Fire TV Chromecast or DVD player with online console streaming any streaming with online video apps device devices streaming capability

Figure 23: Which streaming devices do you use to watch online video on your television? (Select all that apply)

Usage of the different streaming devices varies by country . Smart TVs have the highest usage in the Philippines at 45 .2 percent, set-top boxes and DVD players in India at 39 .6 percent, Google Chromecast at 29 .6 percent in the Philippines, Amazon Fire TV at 26 .0 percent in Germany, and Roku and Apple TV have the highest usage in the U .S . France has the highest number of people who do not use dedicated streaming devices at 56 .6 percent .

Set-top box or I don’t Smart TV Video Other Amazon Apple Google DVD player use any Country Roku with online game Streaming Fire TV TV Chromecast with online streaming video apps console Device streaming devices capability

France 7 .0% 7 .2% 10 .8% 1 .4% 13 .0% 15 .4% 14 .0% 2 .4% 56 .6% Germany 26 .0% 9 .0% 9 .0% 1 .4% 9 .2% 30 .8% 13 .8% 3 .0% 37 .4% India 24 .4% 11 .0% 26 .8% 5 .8% 39 .6% 31 .6% 12 .4% 3 .8% 24 .4% Italy 11 .6% 7 .6% 16 .0% 1 .4% 6 .0% 36 .6% 16 .0% 4 .2% 36 .8% Japan 16 .0% 10 .8% 11 .0% 2 .0% 9 .4% 10 .8% 14 .8% 5 .4% 41 .2% Philippines 4 .2% 9 .0% 29 .6% 3 .8% 16 .0% 45 .2% 12 .2% 7 .2% 23 .8% Singapore 5 .2% 11 .6% 16 .0% 1 .0% 25 .6% 41 .0% 7 .8% 4 .6% 31 .8% South Korea 8 .2% 12 .2% 23 .2% 3 .6% 31 .2% 30 .2% 10 .4% 2 .8% 30 .0% U.K. 22 .6% 9 .2% 11 .2% 4 .6% 20 .0% 33 .8% 13 .2% 4 .6% 27 .4% U.S. 22 .0% 13 .2% 13 .6% 21 .0% 12 .2% 32 .8% 22 .8% 3 .0% 24 .0% Global 14.7% 10.1% 16.7% 4.6% 18.2% 30.8% 13.7% 4.1% 33.3%

Figure 24: Which streaming devices do you use to watch online video on your television? (Select all that apply)

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Video game consoles and smart TVs are more commonly used by younger viewers . Older ones are more likely to not use any streaming devices .

Set-top box or I don’t Smart TV Video Other Amazon Apple Google DVD player use any Age Roku with online game Streaming Fire TV TV Chromecast with online streaming video apps console Device streaming devices capability

18-25 14 .9% 11 .2% 16 .3% 7 1%. 15 .7% 35 .9% 21 .5% 4 .1% 31 .8% 26-35 20 .1% 16 .6% 23 .0% 5 .1% 20 .2% 38 .5% 21 .2% 3 .5% 23 1%. 36-45 18 .4% 13 .8% 20 .0% 5 .9% 18 .9% 34 .8% 17 .9% 3 .7% 27 .8% 46-60 11 .3% 5 .3% 13 .6% 3 .2% 19 .0% 25 .8% 8 .7% 4 .6% 37 .8% Over 60 9 .4% 4 .9% 10 .6% 2 .9% 15 .4% 21 .4% 2 .3% 4 .4% 46 .1% All Ages 14.7% 10.1% 16.7% 4.6% 18.2% 30.8% 13.7% 4.1% 33.3%

Figure 25: Which streaming devices do you use to watch online video on your television? (Select all that apply)

MOST VIEWERS SUBSCRIBE TO SVOD SERVICES

With the rapid growth of SVOD services, consumers have more options than ever to access online content . Globally, 59 .3 percent of online viewers subscribe to one or more SVOD services . The highest rate is in the U .S ., where viewers subscribe to an average of 1 .6 services . The lowest rate is in France where viewers have an average of 0 .6 services and more than 60 percent do not subscribe to any .

Average Five or Country None One Two Three Four number of more SVOD services France 60 .6% 26 .8% 9 .2% 2 .4% 0 .8% 0 .2% 0.6 Germany 42 .0% 34 .2% 17 .2% 4 .2% 1 .6% 0 .8% 0.9 India 31 .2% 27 .0% 24 .4% 10 .6% 4 .4% 2 .4% 1.4 Italy 38 .2% 35 .6% 19 .2% 5 .2% 1 .8% 0 .0% 1.0 Japan 47 .8% 34 .8% 11 .6% 3 .8% 1 .2% 0 .8% 0.8 Philippines 33 .2% 39 .0% 16 .8% 6 .8% 1 .4% 2 .8% 1.1 Singapore 51 .6% 34 .6% 9 .4% 2 .4% 1 .0% 1 .0% 0.7 South Korea 40 .8% 30 .0% 18 .0% 8 .2% 2 .2% 0 .8% 1.0 U.K. 41 .6% 31 .6% 19 .2% 5 .2% 1 .6% 0 .8% 1.0 U.S. 20 .2% 29 .6% 27 .2% 15 .0% 4 .6% 3 .4% 1.6 Global 40.7% 32.3% 17.2% 6.4% 2.1% 1.3% 1.0

Figure 26: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to?

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Younger viewers are more likely to subscribe to SVOD services than older ones, with viewers 46 and older subscribing to an average of less than one service . 15 .5 percent of viewers age 26-35 subscribe to three or more services .

Average Five or Age None One Two Three Four number of more SVOD services 18-25 30 .5% 33 .1% 23 .6% 9 .0% 1 .9% 1 .9% 1.2 26-35 25 .0% 34 .4% 25 .2% 9 .7% 2 .8% 2 .9% 1.4 36-45 34 .2% 33 .5% 18 .8% 9 .6% 3 .3% 0 .8% 1.2 46-60 48 .9% 33 .4% 12 .2% 3 .4% 1 .4% 0 .7% 0.8 Over 60 61 .7% 25 .9% 9 .4% 1 .6% 0 .8% 0 .6% 0.6 All Ages 40.7% 32.3% 17.2% 6.4% 2.1% 1.3% 1.0

Figure 27: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to?

With all of the recent discussions about cord-cutting trends, there have been concerns in the broadcast industry that consumers will cancel their cable and satellite television subscriptions and rely on SVOD services . The data from this survey shows the growth of SVOD services is not coming at the expense of cable and satellite TV . In fact, SVOD subscription rates among cable and satellite TV subscribers are higher in every country . This indicates people who are most interested in high-quality video content are supplementing their cable and satellite subscriptions with SVOD services, not replacing them .

Cable subscribers Non-cable subscribers 2.0

1.8 1.7 1.6 1.6 1.4 1.4 1.3 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.6 0.6

0.4 0.3 0.3 0.2

0.0 France Germany India Italy Japan PhilippinesSingapore South Korea U.K. U.S. Global

Figure 28: How many pay online streaming video services (i .e ., Netflix, Amazon Prime, etc ). do you currently subscribe to? (Cable & satellite TV subscribers vs . non-subscribers)

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PRICE IS THE PRIMARY REASON TO CANCEL SVOD SERVICES

When consumers decide whether to cancel a SVOD service, price is the primary consideration . More than half of global consumers said price was the primary reason they would cancel a SVOD service, with more than a quarter identifying availability of interesting content as their top concern . Price was the top reason in every country except Japan, where interesting content was the top priority .

The content The service It is too hard to The price of the The quality of the available for doesn't support Country find content I am service became video playback viewing was not all of the devices looking for too expensive was not good interesting to me I use for viewing France 8 .4% 21 .6% 59 .6% 8 .0% 2 .4% Germany 0 .8% 30 .4% 52 .0% 10 .2% 6 .6% India 8 .4% 23 .6% 45 .0% 13 .0% 10 .0% Italy 2 .8% 16 .2% 69 .8% 8 .6% 2 .6% Japan 10 .0% 39 .6% 37 .0% 7 .2% 6 .2% Philippines 6 .4% 21 .0% 57 .8% 9 .0% 5 .8% Singapore 4 .6% 25 .2% 63 .2% 5 .0% 2 .0% South Korea 9 .8% 31 .4% 44 .0% 9 .4% 5 .4% U.K. 5 .2% 23 .6% 59 .8% 8 .0% 3 .4% U.S. 7 .0% 20 .6% 62 .0% 7 .8% 2 .6% Global 6.3% 25.3% 55.0% 8.6% 4.8%

Figure 29: Which of the following is most likely to cause you to cancel your subscription to an online streaming service?

MOST ONLINE VIEWERS ALSO SUBSCRIBE TO CABLE

Globally, 61 7. percent of people who watch online video also subscribe to a cable or satellite television service . Subscription rates varied from a high of 93 .6 percent in India to a low of 37 .4 percent in Japan .

Yes No

100% 93.6% 90% 81.6% 80% 74.6%

70% 68.8% 62.6% 62.6% 61.7% 60% 54.8% 53.6% 51.0% 51.0% 49.0% 49.0% 50% 45.2% 46.4%

40% 37.4% 37.4% 38.3% 31.2% 30% 25.4%

20% 18.4%

10% 6.4%

0% France Germany India Italy Japan Philippines Singapore South Korea U.K. U.S. Global

Figure 30: Do you currently subscribe to a cable or satellite provider for your television service? [email protected] | limelight.com 19 THE STATE OF ONLINE VIDEO 2018 LIMELIGHT NETWORKS | EXPERIENCE FIRST

Contrary to the concern of younger viewers abandoning cable and satellite TV and relying exclusively on the internet and OTT services, people under 45 subscribe to cable and satellite television at a higher rate than those 46 and older .

YesNo 80%

70% 65.4% 65.8% 61.9% 61.7% 59.7% 60% 55.6%

50% 44.4% 40.3% 40% 38.1% 38.3% 34.6% 34.2% 30%

20%

10%

0% 18-25 26-35 36-45 46-60 Over 60 All Ages

Figure 31: Do you currently subscribe to a cable or satellite provider for your television service?

PRICE IS THE PRIMARY REASON FOR CANCELLING CABLE

Price is the primary reason global consumers would cancel their cable or satellite television subscriptions . 46 .4 percent said they would cancel their service if the price continues to rise . 16 .4 percent would cancel if they could subscribe just to the channels they want online, 13 .3 percent would cancel when all of the content they want to view is available online, and 7 .4 percent are waiting for more sports and live events to become available online . However, 14 7. percent said they would never cancel their cable or pay TV service .

60%

50% 46.4%

40%

30%

20% 16.4% 14.7% 13.3% 10% 7.4% 1.8% 0% I will never If the price When all the When I can When more Other terminate my continues to content I want directly subscribe sports and other cable or pay increase to watch is to just the live events television available online channels I become subscription want online available online

Figure 32: Which of the following is most likely to make you terminate your cable or satellite television subscription?

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The highest percentage of people who will never give up their cable or pay TV services is in South Korea at 25 .9 percent . Concern about the price of cable and satellite TV was highest in the U .K . at 62 .0 percent .

I will never When I can When more When all the terminate If the price directly subscribe sports and content I want Country my cable or continues to to just the other live Other to watch is pay television increase channels events become available online subscription I want online available online France 12 .9% 58 .6% 7 .3% 13 .3% 5 .3% 2 .7% Germany 19 .7% 48 .0% 14 .7% 11 .0% 5 .0% 1 .7% India 21 .9% 29 .0% 16 .7% 21 .7% 9 .2% 1 .5% Italy 6 .9% 61 .5% 10 .0% 12 .0% 7 .6% 2 .1% Japan 11 .3% 39 .4% 18 .3% 20 .8% 9 .1% 1 .1% Philippines 13 .4% 48 .5% 12 .9% 15 .6% 5 .9% 3 .8% Singapore 4 .5% 51 .8% 17 .6% 19 .2% 4 .7% 2 .2% South Korea 25 .9% 32 .9% 14 .3% 14 .7% 11 .6% 0 .7% U.K. 10 .4% 62 .0% 6 .0% 13 .5% 7 .6% 0 .6% U.S. 12 .8% 46 .4% 13 .1% 19 .5% 6 .7% 1 .5% Global 14.7% 46.4% 13.3% 16.4% 7.4% 1.8%

Figure 33: Which of the following is most likely to make you terminate your cable or satellite television subscription?

VIEWERS DISCOVER CONTENT BY BROWSING STREAMING SITES

With the proliferation of online video content, it can often be difficult for viewers to locate or even be aware of movies and series that will be most interesting to them . Globally, viewers most often rely on a streaming service’s website to find content (30 .6 percent), followed by recommendations from friends and family (25 1. percent), recommendations from a streaming service (20 .3 percent), news coverage (14 7. percent), and message boards and websites (9 .3 percent) . Viewers in France and the U .K . rely on recommendations from friends and family more than any other method .

Browsing Message News coverage Recommendations Recommendations a streaming boards and Country of trending from a streaming from friends service's website social media shows service and family on my own websites

France 30 .0% 8 .5% 12 .1% 11 .8% 37 .6% Germany 28 .8% 9 .5% 7 .8% 25 .8% 28 .1% India 27 .5% 9 .2% 19 .6% 23 .7% 20 .0% Italy 31 .0% 9 .2% 21 .3% 14 .1% 24 .3% Japan 39 .0% 2 .2% 21 .6% 26 .5% 10 .8% Philippines 30 .7% 15 .1% 12 .4% 19 .2% 22 .6% Singapore 33 .0% 8 .9% 18 .3% 16 .7% 23 1%. South Korea 25 .6% 18 .9% 10 .1% 23 .8% 21 .6% U.K. 29 .7% 6 .0% 12 .5% 17 .2% 34 .7% U.S. 30 .9% 5 .6% 11 .0% 24 .4% 28 .1% Global 30.6% 9.3% 14.7% 20.3% 25.1%

Figure 34: How do you typically learn about new series and movies that you want to stream online? [email protected] | limelight.com 21 THE STATE OF ONLINE VIDEO 2018 LIMELIGHT NETWORKS | EXPERIENCE FIRST

Women are more likely to seek recommendations from friends and family than men, while men rely more on news coverage .

Browsing Message boards News coverage Recommendations Recommendations a streaming Gender and social of trending from a streaming from friends service's website media websites shows service and family on my own

Male 31 .0% 9 .6% 16 .9% 21 .0% 21 .6% Female 30 .1% 9 .4% 12 .4% 19 .9% 28 .2% All 30.6% 9.3% 14.7% 20.3% 25.1%

Figure 35: How do you typically learn about new series and movies that you want to stream online?

MOST VIEWING HAPPENS AT HOME

With the growing use of smartphones for online viewing, consumers now have the ability to watch content from anywhere . Where do they prefer to watch from?

Viewers in every country overwhelmingly watch online video from home more than any other location . The U .K . had the highest home viewing of any country . The Philippines had the highest number of people who watch from work or school, while India had the greatest number who watch while travelling or commuting .

While traveling or Country At home At work or school Somewhere else commuting France 3 .29 0 .52 0 74. 0 .43 Germany 3 .24 0 .55 0 .86 0 76. India 2 .91 1 .03 1 .55 1 .16 Italy 3 .02 0 .68 0 .92 0 .89 Japan 2 .91 0 .39 0 .57 0 .29 Philippines 3 .14 1 .21 1 .42 1 .15 Singapore 3 .09 0 .92 1 .19 0 .86 South Korea 2 .96 1 .14 1 .35 1 .01 U.K. 3 .31 0 .51 0 .62 0 .57 U.S. 3 .13 0 .92 1 .20 0 .93 Global 3.10 0.79 1.04 0.80

Figure 36: How often do you watch online video from the following locations? (Scale 0-4)

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VIEWERS BINGE-WATCH FOR TWO HOURS AT A TIME

With OTT services releasing full seasons of popular shows all at once, consumers no longer have to wait for the next episode to become available . They now have the ability to “binge-watch” shows in one extended session .

Global viewers binge-watch shows for an average of two hours, seven minutes at a time . Binge-watching is longest in the U .S ., where viewers watch for almost three hours at a time and 4 .8 percent watch more than 10 hours at a time . Globally, 22 .9 percent do not binge-watch online content .

I do not More than Less than 1-3 hours 3-5 hours 5-7 hours 7-10 hours Average Country binge-watch 10 hours one hour at a time at a time at a time at a time hours online series at a time

France 29 .6% 20 .2% 36 .8% 10 .0% 2 .0% 0 .6% 0 .8% 1.50 Germany 25 .2% 17 .8% 41 .4% 11 .0% 3 .2% 1 .0% 0 .4% 1.68 India 21 .2% 20 .6% 35 .6% 14 .6% 5 .4% 2 .0% 0 .6% 1.97 Italy 26 .8% 14 .4% 42 .2% 10 .8% 3 .4% 1 .4% 1 .0% 1.79 Japan 25 .2% 9 .4% 34 .4% 18 .0% 7 .4% 2 .6% 3 .0% 2.48 Philippines 19 .2% 15 .0% 35 .0% 17 .8% 5 .6% 4 .4% 3 .0% 2.56 Singapore 22 .4% 12 .6% 38 .2% 16 .4% 5 .8% 3 .0% 1 .6% 2.28 South Korea 4 .2% 36 .4% 43 .6% 9 .4% 4 .4% 1 .4% 0 .6% 1.89 U.K. 32 .4% 7 .6% 32 .8% 19 .2% 5 .4% 1 .8% 0 .8% 2.04 U.S. 22 .4% 5 .0% 36 .2% 18 .8% 9 .4% 3 .4% 4 .8% 2.93 Global 22.9% 15.9% 37.6% 14.5% 5.2% 2.2% 1.7% 2.1 1

Figure 37: How long do you typically spend binge watching an online series in one sitting?

Binge-watching is highest among younger viewers, with those 18-25 watching an average of almost three hours at a time, while those over 60 watch for just over an hour .

I do not More than Less than 1-3 hours 3-5 hours 5-7 hours 7-10 hours Average Age binge-watch 10 hours one hour at a time at a time at a time at a time hours online series at a time

18-25 8 .5% 11 .9% 44 .8% 19 .6% 8 .4% 2 .9% 4 .0% 2.96 26-35 11 .5% 11 .9% 42 .8% 20 .8% 7 1%. 3 .6% 2 .4% 2.77 36-45 16 .9% 16 .6% 37 .0% 17 .5% 7 .9% 2 .6% 1 .5% 2.40 46-60 28 .1% 19 .6% 36 .9% 10 .4% 2 .7% 1 .5% 0 .8% 1.64 Over 60 45 .9% 16 .6% 27 .9% 6 .9% 1 .6% 0 .5% 0 .6% 1.12 All Ages 22.9% 15.9% 37.6% 14.5% 5.2% 2.2% 1.7% 2.1 1 Figure 38: How long do you typically spend binge watching an online series in one sitting?

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Women binge-watch online content longer than men, at an average of 2 hours, 16 minutes compared to just under two hours for men . More than 25 percent of men do not binge-watch online content .

I do not More than Less than 1-3 hours 3-5 hours 5-7 hours 7-10 hours Average Gender binge-watch 10 hours one hour at a time at a time at a time at a time hours online series at a time

Male 25 .2% 16 .2% 37 .8% 13 .1% 4 .3% 2 .1% 1 .4% 1.96 Female 20 .5% 15 .6% 37 .5% 16 .1% 6 .2% 2 .3% 2 .0% 2.27 All 22.9% 15.9% 37.6% 14.5% 5.2% 2.2% 1.7% 2.1 1 Figure 39: How long do you typically spend binge watching an online series in one sitting?

VIEWERS ARE MOST ACCEPTING OF PRE-ROLL ADVERTISING

As more free content becomes available online, content distributors are utilizing different advertising options to monetize content . Viewers are generally split in their opinions about online ads for products that interest them, with 32 1. percent okay with ads while 27 .3 percent are not . Opposition is highest in France, while viewers in the Philippines are most likely to welcome ads that interest them .

France 23.2% 23.0% 53.8%

Germany 23.0% 41.4% 35.6%

India 49.4% 33.6% 17.0%

Italy 22.2% 46.8% 31.0%

Japan 19.2% 49.8% 31.0%

Philippines 54.8% 33.4% 11.8%

Singapore 33.0% 43.8% 23.2%

South Korea 40.8% 45.0% 14.2%

U.K. 24.8% 43.6% 31.6%

U.S. 31.0% 45.2% 23.8%

Global 32.1% 40.6% 27.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Neutral Disagree

Figure 40: I’m okay with advertising in online video as long as I’m interested in it

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Younger viewers are more willing to watch ads that interest them than older ones .

18-25 39.2% 37.2% 23.6%

26-35 34.8% 40.2% 25.0%

36-45 35.8% 38.8% 25.5%

46-60 31.1% 41.9% 27.0%

Over 60 20.8% 43.4% 35.8%

All Ages 32.1% 40.6% 27.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Neutral Disagree

Figure 41: I’m okay with advertising in online video as long as I’m interested in it

Global consumers overwhelmingly accept ads in online video as long as they have the ability to skip them . Japan is the only country where less than half the people agree .

France 66.2% 15.8% 18.0%

Germany 58.0% 27.8% 14.2%

India 65.6% 24.8% 9.6%

Italy 63.2% 28.6% 8.2%

Japan 37.8% 41.2% 21.0%

Philippines 73.2% 22.6% 4.2%

Singapore 66.6% 23.4% 10.0%

South Korea 68.2% 26.2% 6.0%

U.K. 65.6% 26.4% 8.0%

U.S. 67.2% 25.8% 7.0%

Global 63.2% 26.2% 10.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Neutral Disagree

Figure 42: I’m okay with advertising in online video as long as I can skip it

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Viewers have become accustomed to short pre-roll ads in free content, with only 13 percent opposed to this type of advertising .

France 63.8% 12.4% 23.8%

Germany 53.0% 31.0% 16.0%

India 63.2% 27.2% 9.6%

Italy 61.2% 27.6% 11.2%

Japan 46.2% 35.8% 18.0%

Philippines 60.4% 29.8% 9.8%

Singapore 58.6% 28.8% 12.6%

South Korea 59.0% 34.2% 6.8%

UK 56.8% 31.8% 11.4%

US 60.6% 29.0% 10.4%

Global 58.3% 28.7% 13.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Neutral Disagree

Figure 43: I’m okay with a short advertisement before the video if the content is free

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However, consumers are not so accepting of mid-roll ads in free content, with almost 40 percent saying they do not like this format .

France 29.4% 16.8% 53.8%

Germany 22.6% 35.0% 42.4%

India 34.0% 28.2% 37.8%

Italy 23.0% 36.4% 40.6%

Japan 28.0% 41.8% 30.2%

Philippines 27.6% 32.4% 40.0%

Singapore 23.8% 36.4% 39.8%

South Korea 21.8% 42.8% 35.4%

U.K. 21.8% 34.4% 43.8%

U.S. 34.4% 32.0% 33.6%

Global 26.7% 33.6% 39.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Agree Neutral Disagree

Figure 44: I’m okay with multiple advertisements during a longer video if the content is free

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VIDEO REBUFFERING IS THE PRIMARY VIEWING FRUSTRATION

Video rebuffering remains the most frustrating aspect of online viewing . 43 .4 percent of global consumers noted it as their primary issue with watching online video . Rebuffering is the top concern by viewers in every country except France, where picture quality was the top frustration .

When the quality When the video When I have to When the video is of the video is poor rebuffers (i.e., the video Country wait for the video to unavailable from the (i.e., blurry, pauses during playback start playing device I am using hard to see, etc.) so it can reload)

France 12 .4% 45 .4% 7 .8% 34 .4% Germany 14 .2% 25 .2% 15 .4% 45 .2% India 13 .2% 32 .0% 8 .8% 46 .0% Italy 11 .6% 28 .8% 7 .0% 52 .6% Japan 15 .2% 29 .8% 22 .8% 32 .2% Philippines 8 .0% 40 .6% 8 .2% 43 .2% Singapore 12 .6% 31 .8% 9 .2% 46 .4% South Korea 24 .4% 29 .2% 10 .4% 36 .0% U.K. 12 .2% 29 .2% 9 .6% 49 .0% U.S. 9 .2% 28 .6% 12 .8% 49 .4% Global 13.3% 32.1% 11.2% 43.4%

Figure 45: What is the most frustrating aspect of watching video online?

When asked how many times a video can rebuffer before viewers will stop watching, 28 7. percent of global respondents said they would stop after the first time . And after the second video rebuffer, a total of 65 .5 percent of people will have stopped watching . Only 15 percent of viewers will keep watching after the third rebuffer .

45%

40% 36.8%

35%

30% 28.7%

25%

20% 19.5% 15.0% 15%

10%

5%

0% One Two Three More than three Figure 46: How many times will you let an online video rebuffer before you stop watching and abandon it?

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Globally, viewers will abandon a video after an average of 2 .2 rebuffers . The most impatient viewers are in France, where people will stop watching after an average 1 7. rebuffers . The most tolerant are in the Philippines at an average of 2 7. rebuffers .

Country One Two Three More than three Average

France 49 .0% 33 .2% 14 .0% 3 .8% 1.7 Germany 32 .4% 38 .8% 19 .4% 9 .4% 2.1 India 28 .4% 38 .0% 17 .4% 16 .2% 2.2 Italy 41 .6% 36 .6% 14 .0% 7 .8% 1.9 Japan 23 .8% 26 .4% 17 .4% 32 .4% 2.6 Philippines 14 .0% 30 .0% 26 .4% 29 .6% 2.7 Singapore 17 .8% 41 .4% 22 .8% 18 .0% 2.4 South Korea 40 .8% 45 .4% 10 .6% 3 .2% 1.8 U.K. 19 .6% 39 .8% 25 .4% 15 .2% 2.4 U.S. 19 .8% 38 .2% 27 .6% 14 .4% 2.4 Global 28.7% 36.8% 19.5% 15.0% 2.2

Figure 47: How many times will you let an online video rebuffer before you stop watching and abandon it?

Older viewers are less patient with rebuffering than younger ones . 40 percent of people over 60 will stop watching after the first rebuffer . Only 18 .8 percent of those 18-25 will stop watching the first time . However, even viewers 18-25 will stop watching after an average of 2 .4 rebuffers .

Age One Two Three More than three Average

18-25 18 .8% 39 .4% 26 .3% 15 .5% 2.4 26-35 21 .3% 40 .9% 24 .0% 13 .8% 2.3 36-45 26 .4% 38 .2% 18 .9% 16 .6% 2.3 46-60 33 .5% 33 .5% 17 .2% 15 .9% 2.2 Over 60 40 .0% 33 .8% 13 .6% 12 .7% 2.0 All Ages 28.7% 36.8% 19.5% 15.0% 2.2

Figure 48: How many times will you let an online video rebuffer before you stop watching and abandon it?

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Viewers are increasingly less forgiving of rebuffering . The average number of times a viewer will let a video rebuffer before they stop watching has dropped from 2 7. times in 2016 to 2 .2 times in 2018 .

3.0 2.7

2.5 2.3 2.2

2.0

1.5

1.0

0.5

0.0 2016 2017 2018 Figure 49: How many times will you let an online video rebuffer before you stop watching and abandon it?

2016 2017 2018 45% 39.8% 38.3% 40% 36.8% 35% 32.2%

30% 28.7%

25% 23.2% 21.6% 21.7% 19.5% 20% 15.3% 15.0% 15%

10% 7.9%

5%

0% Once Twice Three times More than three times Figure 50: How many times will you let an online video rebuffer before you stop watching and abandon it?

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CONCLUSIONS AND RECOMMENDATIONS

Content distributors should consider the following recommendations to provide consumers with a viewing experience that maximizes engagement regardless of device or location .

MAKE CONTENT AVAILABLE ON ANY DEVICE Viewers use many different devices to watch online video throughout the day . While computers are the most common viewing device globally, smartphones, smart TVs, and dedicated streaming devices are also widely used . The challenge for content distributors is these devices often require different streaming media formats such as HLS, MPEG-DASH, and MSS . To simplify the process of delivering video in multiple formats, content distributors can use a Content Delivery Network (CDN) that allows content to be packaged in the correct delivery format as it’s requested by viewers rather than needing to pre-encode and store multiple versions . On-demand cloud-based transcoding and transmuxing helps minimize storage costs and allows OTT and live video content to be easily and efficiently delivered to as many viewers as possible .

ENSURE HIGH-QUALITY MOBILE VIEWING EXPERIENCES Smartphones are the primary viewing device for viewers age 18-45 . They’re also the preferred viewing device for consumers in many countries, including most emerging regions where there isn’t a robust broadband infrastructure in place . However, mobile connections are often subject to changes in bandwidth and latency that can cause video to rebuffer when network conditions change during playback . To provide all viewers with the best possible viewing experience, content providers can use a CDN that continually monitors and optimizes video delivery based on realtime conditions . This ensures each viewer receives the highest picture quality while minimizing rebuffering that causes viewers to stop watching .

DELIVER REALTIME LIVE CONTENT Viewers enjoy the convenience of being able to follow the live action of their favorite sports teams online— wherever they happen to be . However, with so many fans also engaging in social media while watching live sports, the inherent delay in traditional live streaming often leads to “spoilers” where online viewers learn of critical plays from social media before seeing the action online . Almost 60 percent of viewers would be more likely to watch live sports online if the stream was not delayed from the television broadcast . To capture these viewers, sports broadcasters and other distributors of live online content should choose a streaming partner that offers realtime live streaming that can deliver content to viewers with less than one second of latency . This will ensure online viewers experience the action as it happens, increasing both online viewership and revenue opportunities .

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APPENDIX – DEMOGRAPHICS

35% 29.1% 30%

25% 20.6% 20.9% 20% 16.8% 15% 12.6%

10%

5%

0% 18-2526-35 36-4546-60 Over 60

Figure 51: How old are you?

60% 51.1% 50% 48.9%

40%

30%

20%

10%

0% Male Female

Figure 52: What is your gender?

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METHODOLOGY

This survey was fielded by a third-party company with access to consumer panels in France, Germany, India, Italy, Japan, Philippines, Singapore, South Korea, the U .K ., and the U .S . 500 responses were collected from each country for a total of 5,000 global responses . Survey responses were collected between August 1-12, 2018 .

ABOUT LIMELIGHT NETWORKS Limelight Networks Inc ., (NASDAQ: LLNW), a leading provider of digital content delivery, video, cloud security, and edge computing services, empowers customers to provide exceptional digital experiences . Limelight’s edge services platform includes a unique combination of global private infrastructure, intelligent software, and expert support services that enable current and future workflows . For more information, visit www .limelight com,. follow us on Twitter, Facebook, and LinkedIn .

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