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ECONOMICS OF MOBILE

2015 EDITION

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Published May 2015 | ISBN: 978-1-939835-437 ECONOMICS OF MOBILE

2015 EDITION

One SNL Plaza, Charlottesville, VA 22902 | Phone: 866.296.3743 | www.snlkagan.com

Published May 2015 | ISBN: 978-1-939835-437 Economics of Mobile Programming SNL Kagan Industry Report

Contents

Executive Summary ...... 2 Mobile ads vs. video subscription services revenue, U.S. (chart) ...... 2 Comparing multichannel video subs and subscription OTT subs, Q4 2014 (chart) . 3 The Addressable Market: Sizing the U.S. Smartphone and Tablet Audience ...... 4 Smartphone and tablets in use, U.S., 2008-2014 (chart) ...... 4 Carrier Video Subscription Services Are No Competition for OTT/TV Everywhere . . . .5 Carrier-branded mobile video subs, 2007-2014 (chart) ...... 5 Carrier-branded mobile video revenue, 2007-2014 (chart) ...... 5 OTT and mobile video year-end subs, 2007-2014 (chart) ...... 6 Comparing multichannel video subs and subscription OTT subs, Q4 2014 (chart) . 6 OTT and carrier-branded mobile video device compatibility ...... 7 Price differential between OTT & carrier-based mobile video services, 2015 . . . .7 Free mobile video content, 2015 ...... 7 Mobile video pricing by service provider, 2015 ...... 8 AT&T Mobile TV, Sprint TV & T-Mobile TV prime package network content, 2015 . .8 Carrier Subscription Services Dwarfed by Mobile Video Ad Revenue ...... 9 Mobile ads vs. video subscription services revenue, U.S. (chart) ...... 9 Mobile ad revenue, 2010-2014 (chart) ...... 9 Top seven mobile advertisers, 2014 ...... 9 Global monthly active users, YE 2013 (chart) ...... 10 Mobile ad company deals database, 2009-2014 ...... 10 The iPad's Evolution Into a TV ...... 11 Weekly viewers of full-length TV/movies on smartphone/tablet, U.S. (chart) . . . 11 Mobile video viewing by age generation (chart) ...... 11 Most popular iPad free app genres, 2011-2015 (chart) ...... 12 Top entertainment apps, Q1 2011 vs. Q1 2015 ...... 12 Leading OTT iPad app rank, Q1 2015 (chart) ...... 13 Hollywood free iPad app leaders, Q1 2015 ...... 13 Basic cable network iPad app ranking, 2012-2015 (chart) ...... 14 The Most Popular Mobile-Video Content ...... 15 Viewing of paid mobile video by age generation (chart) ...... 15 Ranked interest in viewing paid mobile-video content on a smartphone . . . . .15 Ranked interest in viewing paid mobile-video content on a tablet ...... 16 No. 1 highest interest in viewing paid mobile video content by gender . . . . . 16 Highest-Rated iPad Video Apps ...... 16 iPad video app rankings based on consumer ratings - broadcasters ...... 16 iPad video app rankings based on consumer ratings - basic & premium cable nets .17 iPad video app rankings based on consumer ratings - multichannel operators . . .17 iPad video app rankings based on consumer ratings - OTT ...... 18 The Pass-Back Effect Finally Gets OTT Traction ...... 18 Selected OTT kids' content aggregators ...... 19

Contents

The OTT Onslaught and Consumer Appetite for Multiple Video Subscriptions . . . . .19 Video provider preference (chart) ...... 19 Launch dates for select OTT aggregators, 2014 & 2015 (chart) ...... 20 Age groups by video provider preference (chart) ...... 20 Multichannel video subs and cord cutters by video provider preference (chart) . . 20 Rise of the Streaming Stick and Streaming Media Player ...... 21 Selected streaming media players & sticks launch dates (chart) ...... 21 Apple TV streaming media player vs. Google Chromecast (graphic) ...... 22 Selected streaming media players and sticks ...... 22 Second-Screen Hype Subsides ...... 23 Viggle revenue, Q1 2012-Q2 2014 (chart) ...... 23 LTE Broadcast and ATSC 3.0 Update ...... 24 Mobile Video Technology Experts ...... 24 Mobile video technology experts by revenue, global, 2012-2014 ...... 24 OTT Library Analysis: Netflix, Hulu Plus and Crackle ...... 25 Netflix, Hulu Plus and Crackle streaming catalog figures, Dec. ‘14 ...... 25 Hulu Plus' library, Dec. '11 - Dec. '14 (chart) ...... 25 Hulu Plus' movie catalog Dec. '14, yearly breakdown (chart) ...... 25 Netflix's streaming library, Dec. '11 - Dec. '14 (chart) ...... 26 Netflix's movie catalog Dec. '14, distribution by year (chart) ...... 26 Netflix's TV season catalog Dec. '14, distribution by year (chart) ...... 26 Crackle's movie catalog Dec. '14, yearly breakdown (chart) ...... 27 Crackle's TV series catalog Dec. '14, yearly breakdown (chart) ...... 27 TV Everywhere Library Update ...... 28 TV Everywhere movie universe (chart) ...... 28 Analysis of TV Everywhere movie catalogs ...... 29 TV Everywhere TV series universe (chart) ...... 29 Analysis of TV Everywhere TV series catalogs ...... 29 U.S. multichannel service provider video app highlights ...... 30

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Production Team Senior Research Analyst John Fletcher Contributing Analysts Kamran Asaf, Brian Bacon, Naeem Choudhary Ali Choukeir, Tony Lenoir, Keith Nissen, Kellsy Panno Graphic Artist Rameez Ali, Shirley Gil, Juan Mangaran Managing Editor Luke Meade Publications Project Editor Mac Mathews

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Economics of Mobile Programming Economics of Mobile Programming SNL Kagan Industry Report

Executive Summary

he days when smartphone and tablet users were primarily early adopters are over. TAt the end of 2014, we estimate 237.7 million smartphones and 118.2 million tablets were in use in the U.S. for a combined total of more than 355 million.

Since peaking at 5.0 million in 2009, carrier-branded mobile video subs fell 63.3% to an estimated 1.8 million at the end of 2014. Demand for the services has been killed by OTT, TV Everywhere and ad-supported mobile video. Services like Hulu and Google Inc.'s YouTube generated $1.54 billion in mobile- video ad revenue in the U.S. in 2014, more Mobile ads vs. video subscription services revenue, U.S. ($M) than eight times the revenue generated by 1,600 Mobile video ad revenue carrier-based video subscriptions. 1,400 Carrier-based mobile 1,200 video subscription revenue* Of the 5,090 online Americans surveyed by 1,000 SNL Kagan in February 2015, one in five 800 were weekly viewers of long-form TV and 600 movie content on smartphones and tablets. 400 Just over one-third of survey respondents had 200 viewed long-form video on their smartphone 0 2010 2011 2012 2013 2014 or tablet in the last 90 days. Unsurprisingly, * Excludes Verizon's NFL Mobile. younger audiences are the most active © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. mobile video viewers.

According to a third-quarter 2014 SNL Kagan survey, the most popular mobile-video content tends to mirror the traditional online video market, dominated by short-form video (e.g. YouTube) and movies (e.g. Netflix), followed by TV shows (e.g. Hulu Plus). Survey respondents showed only modest interest in mobile-video delivery of TV news or, surprisingly, sports.

According to iTunes, some of the highest-rated iPad video apps as of April 2015 were The CW, History, Time Warner's HBO GO and DISH Anywhere.

When we insert Netflix and Hulu Plus into our list of leading multichannel providers (alongside cable, satellite and telco), Netflix comes out on top with 37.7 million subscribers as of the fourth quarter of 2014. Hulu Plus ranks sixth, ahead of AT&T U-verse and Verizon Communications' FiOS, with 6.9 million subs. At the end of 2014, Netflix and Hulu Plus each had about 6,000 movie titles available on demand, compared to Crackle's 113.

In addition to Netflix and Hulu Plus, a flurry of new OTT services launched in 2014 and 2015, including CBS All Access, HBO NOW, YouTube Kids and NOGGIN. Virtual service providers (VSPs) also blossomed in early 2015: DISH's Sling TV launched Jan. 5 and Sony's PlayStation Vue launched March 18. While not a VSP, Verizon's FiOS division launched a slimmed-down ("skinny") video package called Custom TV on April 17.

Comparing multichannel video subs and subscription For the OTT and VSP services, the OTT subs, Q4 2014 question is whether consumers will be (M) comfortable managing several different video 42 37.7 subscriptions. Our third-quarter 2014 online 35 survey of 2,552 Americans found that across 28 all ages, the majority still prefer dealing with 22.4 20.4 21 a single multichannel video operator: 62% 14.0 of respondents preferred a single provider, 14 11.0 6.9 compared to 38% who preferred multiple 7 5.9 5.6 4.3 4.1 video providers. 0

Cox Mobile video is also blurring into regular Netﬂix Charter DIRECTV Comcast

Hulu Plus Hulu TV video, thanks to the growth of streaming Verizon FiOS AT&T U-verse AT&T

DISH Network DISH media players like Apple TV and streaming

Communications sticks like Google's Chromecast. In many Time Warner Cable Communications (1) Communications (1) SNL Kagan estimates. cases, these devices can (or they require the © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. user to) use smartphone and tablet apps as the remote control.

Second-screen hype has subsided in the last couple of years, with venture capitalists abandoning the space and existing players exiting through acquisition or "pivoting" to change business models.

The blurring of unicast and broadcast remains in the early stages. ATSC 3.0 could be a candidate standard as early as 2016. LTE broadcast is also still in the experimental phase, with a couple of trials completed since the last edition of this report. We think AT&T Mobility or Verizon Wireless could launch LTE broadcast handsets and services in the latter half of 2015.

The companies providing hosting and streaming video services to mobile-video content owners and aggregators grew revenue by nearly 20% collectively year over year in 2014. MLB Advanced Media tops the list by revenue; the company most recently won the back-end streaming business of HBO's new OTT service HBO NOW.

The Addressable Market: Sizing the U.S. Smartphone and Tablet Audience

or the first time, more smartphones and tablets are in use in the U.S. than there Fare Americans. At the end of 2014, we estimate 237.7 million smartphones and 118.2 million tablets were in use in the U.S. for a combined total of over 355 million, while according to the U.S. Census, the country had a total population of 320 million.

Smartphone and tablets in use, U.S., 2008-2014 This does not imply all Americans have a (M) smartphone and tablet, but most Americans 400 Smartphones in use Tablets in use Total mobile devices in use US population have access to one or the other. For instance, 350 while the U.S. has 237.7 million smartphone 300 subscriptions, per capita we estimate 250 216 million Americans own a smartphone, 200 as some owners have more than one phone 150 100 (usually one for work and one for personal 50 use). A similar overlap exists with tablet users: 0 many also own a smartphone. 2008 2009 2010 2011 2012 2013 2014 © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. Today's massive addressable market of mobile users means usage can scale fast. For instance, we have noticed a strong uptick in short-term performance for many leading mobile game publishers in the past couple of years. In 2008, when the ceiling of users with smartphones was under 30 million, even a hit game or video app would experience a relatively modest growth curve. Now the needle moves much more quickly.

For mobile video, and mobile entertainment in general, the days when the smartphone and tablet user base was composed mainly of early adopters are in the past. But despite the large potential user base, consumers remain reluctant to pay for wireless carrier- based video subscription services. On the other hand, OTT, TV Everywhere and free- to-view ad-supported mobile video services continue to gain the interest of American video consumers.

Carrier Video Subscription Services Are No Competition for OTT/TV Everywhere

fter peaking at 5.0 million in 2009, carrier-branded mobile video subs fell 63.3% Ato an estimated 1.8 million at the end of 2014. We estimate revenues decreased from just under half a billion dollars to $185 million over that time — a drop in the bucket compared to the 2014 top-line revenues Carrier-branded mobile video subs, 2007-2014 of AT&T Mobility, Sprint, T-Mobile US and (000) 6,000 United States Cellular. 5,030 5,000 4,273 4,278 While Verizon Wireless continues to run its NFL 4,065 4,000 Mobile subscription service, details of which 3,010 are included in our mobile sports wrap-up 2,610 3,000 here, the company otherwise exited the mobile- 2,057 1,846 video subscription business in late 2012. 2,000 This move alone removed about 1.4 million 1,000 subscribers from the industry. 2007 2008 2009 2010 2011 2012 2013 2014

© 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. Declining subs cannot be blamed on flagging Carrier-branded mobile video revenue, 2007-2014 mobile-video consumption. According to ($000) Ooyala's third-quarter 2014 global video index 600,000 report, mobile and tablet devices made up 30% 491,656 489,577 500,000 442,539 of all video views in the quarter, up from 14% 400,761 382,147 in the third quarter of 2013. 400,000

300,000 Video consumption on smartphones is on 185,212 the rise thanks to widespread LTE adoption, 200,000 225,764 Wi-Fi offloading and the expanding popularity 201,108 of larger-screen smartphones like the iPhone 100,000 2007 2008 2009 2010 2011 2012 2013 2014 6+, which offer a better mobile-video viewing © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. experience.

In addition to a better network and larger phones, demand has also been strong for video OTT services like Netflix and Hulu Plus. Over the same period in which subscriptions to carrier-branded mobile video services nose-dived, streaming subscriptions accelerated. Netflix streaming subs grew at a CAGR of 25.9% between 2007 and 2014, compared to a CAGR of negative 6.7% for carrier-branded mobile video subs.

When we insert Netflix and Hulu Plus into our list of leading multichannel providers (alongside cable, satellite and telco), Netflix comes out on top with 37.7 million subscribers as of the fourth quarter of 2014. Hulu Plus ranks OTT & mobile video year-end subs, 2007-2014 sixth, ahead of AT&T U-verse and Verizon Communications' (M) 40 Netﬂix streaming subs FiOS, with 6.9 million subs. Hulu Plus subs 35 Carrier-branded mobile Established OTT providers such as YouTube, Crackle and 30 video subs Amazon Instant Video were joined by a slate of new OTT 25 services in 2014 and early 2015, including HBO NOW, 20 NOGGIN, YouTube Kids, CBS All Access, Pluto.TV, World 15 Wrestling Entertainment's WWE Network, and Tennis 10 Channel Plus. 5

0 Virtual service providers also made a big splash in early 2007 2008 2009 2010 2011 2012 2013 2014 2015. DISH's Sling TV launched in January 2015 and © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. Sony's PlayStation Vue launched in March. While not a VSP, Verizon's FiOS division launched a slimmed -down ("skinny") video package called Custom TV Comparing multichannel video subs and subscription OTT subs, Q4 2014 in mid-April 2015. (M) 42 37.7 DISH's $20 per month digital video service 35 includes live, linear TV programming from

28 networks including CNN, ESPN, Disney 22.4 20.4 Channel, Food Network and TNT, among 21 14.0 others. A rumored streaming-video service is 14 11.0 also expected in the second half of the year 6.9 5.9 7 5.6 4.3 4.1 from Apple. 0 TV Everywhere services offered through Cox Netﬂix

Charter AT&T's U-Verse and Verizon's FiOS cable DIRECTV Comcast Hulu Plus Hulu

Verizon FiOS divisions generated more adoption momentum AT&T U-verse AT&T DISH Network DISH

Communications in 2014 than the mobile-video services on the Time Warner Cable Communications (1) Communications wireless side of those businesses. According (1) SNL Kagan estimates. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. to SNL Kagan estimates, telco TV Everywhere unique users grew to 6.7 million in 2014, up from an estimated 3.6 million at the end of 2013. One reason for the relative success of the TVE services is their flexibility, ease of use and extensive programming libraries.

Subscribers are also defecting from carrier-branded mobile-video services because the business model is less competitive and the value proposition less compelling than with OTT and TV Everywhere.

One key competitive disadvantage for carriers is content. Their services offer limited programming and fragmented VOD options — which, unlike Netflix, do not include movies or any full seasons of TV series. And while carrier services include some in-season TV programming, they offer far less episode stacking than Hulu Plus. For example, at mid-season, we found three episodes of "Grey's Anatomy" on T-Mobile TV and the same number on AT&T Mobile TV, while Hulu Plus offered all episodes of the 11th season.

Another shortcoming of carrier services is that they are anchored to the phone. Because carriers are constrained by content-licensing agreements, the availability of their mobile video services on tablets and streaming sticks is mostly nonexistent. T-Mobile TV is the only service available on tablets (which is limited to Android and Windows devices) and none of the carrier-branded services is directly compatible with Google's Chromecast streaming stick. This limits the appeal of carrier-branded video for consumers who have grown to expect cross-platform functionality from their mobile video services.

OTT and carrier-branded mobile video device compatibility Pricing is also a headwind to adoption, Provider ------Tablet Platform ------Handset Platform ---- Chromecast as the carrier-branded services are iOS Android Windows 8 iOS Android Windows 8 Hulu Plus x x x x x x x priced at a premium to the subscriptions Netflix x x x x x x x offered by their OTT counterparts. AT&T Mobile TV x x x Sprint TV x x x AT&T Mobile TV and Sprint TV cost T-Mobile TV x x x x x 25% more than Netflix and Hulu Plus, x = app is available for platform. As of 2/17/2015. while a month-to-month T-Mobile TV © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. subscription costs 63% more.

Carriers differentiate themselves from Percent price differential Free mobile video content, 2015 between OTT and carrier- Networks Sprint TV T-Mobile TV the OTT players by offering additional based mobile video Access Hollywood x add-on content packages targeted services, 2015 AP x Comedy Time x at different audience segments. Price % > OTT Provider (monthly) pricing FOX x According to Sprint, the children's ($) (%) FOX Sports x Hulu/Netflix 7.99 (2) - FOX News x programming package "Playground AT&T Mobile TV 9.99 (1) 25 Free Music Channel x TV" performs particularly well; Sprint TV 9.99 (1) 25 PBS Kids x T-Mobile TV 12.99 (1) 63 Saturday Morning TV x T-Mobile even raised the price of (1) Carrier pricing refers to the monthly TED x x its one-month, three-month and six- price of prime packages offered by AT&T The Broadway Channel x Mobility, Sprint, and T-Mobile USA. The Weather Channel x x month "Playground TV" subscription (2) Netflix & Hulu Plus pricing is for single Worldview x packages by 20%, 33% and 26%, user plans with no concurrent streaming Total 7 8 across devices. As of 2/17/2015. Pricing as of 1/17/2015. respectively, in 2014, hinting at © 2015 SNL Kagan, a division of SNL Financial LC, © 2015 SNL Kagan, a division of SNL estimates. All rights reserved. the inelastic demand for children's Financial LC, estimates. All rights reserved. programming among parents.

At present, AT&T Mobility boasts the most comprehensive programming lineup, with 51 networks included in its $9.99 subscription package, followed by T-Mobile with 34, and Sprint with 31. Sprint TV and T-Mobile TV also include free content from seven networks in their mobile video apps that don't require a subscription. Sprint TV used to offer 17 networks, including the Disney Channel, ESPN Mobile TV and ABC for free; however, due to programming costs, Sprint TV eliminated 10 of these networks, including all Disney properties, from its free-content lineup in 2014.

Mobile video pricing by service provider, 2015 Hulu Plus Netflix AT&T Mobile TV Sprint TV ------T-Mobile TV ------United States Cellular Content Pack per month per month per month per month 1 month 3 months 6 months ($) ($) ($) ($) ($) ($) ($) ($) Free Content (2) yes (3) no no yes yes yes yes - Prime (1) 7.99 7.99 9.99 9.99 12.99 33.99 49.99 9.99 En Espanol - - 7.99 4.99 9.99 25.99 37.99 7.99 Life and Style - - 6.99 - 7.99 20.99 30.99 - Playground TV - - 6.99 9.99 5.99 15.99 23.99 4.99 Urban Zone - - 4.99 9.99 5.99 15.99 23.99 - Sports Pack ------5.99 Crackle Movies - - 5.95 - 6.99 18.99 36.99 - (1) Prime refers to the most comprehensive single package available from the wireless carrier-based services. (2) Limited content carriers bundle into their customers’ data packages at no extra cost. (3) Limited programming is available on the free version of Hulu at no cost to viewers. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

AT&T Mobile TV, Sprint TV and T-Mobile TV prime package network content, 2015 Networks in each AT&T Mobile T-Mobile TV SprintTV Networks in each AT&T Mobile T-Mobile TV SprintTV package TV (1) Prime (1) Xtra (1) package TV (1) Prime (1) Xtra (1) $9.99 $12.99 $9.99 $9.99 $12.99 $9.99 ABC x x x Fox News x x A&E x x x fyi. x x x ABC Family x x x GT Mobile x ABC News Now x x x History Mobile x x x ACC Network x Lifetime x x x Animal Planet x x x LOGOTV x x x ATAKU x x MHz Worldview x Azteca America x Mobile by Bravo x x x BabyFirst TV x MTV x x BET x My Kazoo TV x Bloomberg x NBC Mobile x x x Campus Insiders x NBC Sports x x x CBS x Nickelodeon x x x CBS News x Nickelodeon Preschool x x CBS Sports x Nickelodeon Espanol x x Cine Mexicano x Oxygen x x x Comedy Central x x x PBS Kids x x Comedy Time x Salacious Streets TV x CMT Mobile x Saturday Morning TV x x Crackle x SPIKE x x x Discovery x x x Syfy x x x Discovery for Families x Teen Nick x x x Disney Channel x x x Telemundo x Disney XD x x x TR3S x x E! x x x Univision x ESPN Deportes x USA x x x ESPN On Demand x x x VH1 x x x FOX Business x x Total 51 34 31 Fox Mobile Entertainment x x As of 2/17/2015. Compares the most comprehensive content packages from each of the carrier’s services. (1) Programming lists exclude music stations. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

Carrier Subscription Services Dwarfed by Mobile Video Ad Revenue

n addition to OTT and TV Everywhere eating carrier video subscription services' Ilunch, ad-supported free-to-view mobile video has exploded.

Mobile ads vs. video subscription services revenue, U.S. Since 2010, mobile advertising has managed ($M) 1,600 a strong 85.3% CAGR in top-line revenue, Mobile video ad revenue 1,400 excluding traffic-acquisition costs, and we Carrier-based mobile 1,200 video subscription revenue* estimate the market topped $12.78 billion in 1,000 2014. Mobile video advertising is estimated 800 at 12.0% ($1.54 billion) of the total pie. 600 The majority of mobile video ad revenue 400 in 2014 came from Google's YouTube, with 200 Hulu LLC also a rising star. 0 2010 2011 2012 2013 2014 Off-deck mobile video ad revenue surpassed * Excludes Verizon's NFL Mobile. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. carrier-based mobile video subscription revenue in 2013. While in 2010 Mobile Mobile ad revenue, 2010-2014 video ads were just 10% of carrier-based ($M) 14,000 video subscription services, now the reverse is true.

12,000 Ad-supported mobile video services in the U.S. Google/AdMob like Hulu and YouTube generated more than eight 10,000 Facebook Twitter times the revenue carrier-based video subscriptions 8,000 Pandora generated in 2014. 6,000 Yahoo! Apple/Quattro 4,000 Looking at all mobile ad revenue, not just video, Millennial Media 2,000 Others the top seven publishers owned about 82% of 0 the space's revenue in 2014. Total U.S. mobile 2010 2011 2012 2013 2014 advertising revenue grew 67% annually from U.S. only, excludes traffic acquisition costs. © 2015 SNL Kagan, a division of SNL Financial LC, from company filings & SNL Kagan estimates. All rights reserved. $7.64 billion in 2013 to $12.78 billion in 2014.

Top seven mobile advertisers, 2014 Google continued its dominance ------U.S. mobile advertising revenue ------‘13- ‘14 ‘10- ‘14 Mkt 2010 2011 2012 2013 2014 % Chg. CAGR Shr. with an estimated market share (%) (%) (%) of 46% in 2014, followed by Google/AdMob ($M) 444.6 872.9 1,887.5 3,438.3 5,853.6 70 90 46 Facebook ($M) - - 209.3 1,244.9 2,560.0 106 - 20 Facebook at 20% and Twitter and Twitter ($M) - 3.5 83.9 308.0 648.7 111 - 5 Pandora Media both at about 5%. Pandora ($M) 24.7 80.6 193.0 384.1 601.7 57 122 5 Yahoo! ($M) 44.5 71.0 106.5 223.8 482.0 115 82 4 Apple/Quattro ($M) 78.8 90.6 131.3 170.7 204.9 20 27 2 Millennial Media ($M) 32.4 65.3 106.0 138.0 190.1 38 56 2 Others ($M) 458.8 808.2 1,150.7 1,732.0 2,243.1 30 49 18 Total ($M) 1,083.7 1,992.1 3,868.1 7,639.8 12,784.2 67 85 100 % Chg. (%) 96 84 94 98 67 As of October 21, 2014. Excludes traffic acquisition costs. © 2015 SNL Kagan, a division of SNL Financial LC, from company filings & SNL Kagan estimates. All rights reserved.

A common thread for all top seven properties is having a large reach. Each on their own can reach tens of millions, a threshold required to attain the interest of the big-spending national advertisers. Global monthly active users, YE 2013 (M) Knowing those users is also critical for ad targeting. 1,400 1,230 Facebook and Twitter in particular, by nature of 1,200 1,100 being social networks, sit on a treasure trove of 1,000 user demographics that are available without 800 800 relying on cookies. This demographic detail, their 600 600 large reach and ability to serve as a "one-stop- shop" for brands looking to reach mobile users 400 241 have helped the two grow market share from zero 200 76 in 2010 to a combined 25% in 2014. 0 Facebook Google* Yahoo! Millennial Twitter Pandora Media Five of the top seven (Facebook, Twitter, Pandora, As of October 8, 2014. Includes mobile and desktop users. * Estimated YouTube reach. Apple and Millennial Media) rely primarily on © 2015 SNL Kagan, a division of SNL Financial LC, from company ﬁlings and SNL Kagan estimates. All rights reserved. display advertising. Facebook and Twitter are having success with sponsored timeline posts, a display format sometimes referred to as "native" advertising. By contrast, we estimate 77% of Google's mobile ad revenue comes from search.

Mobile ad company deals database, 2009-2014 Millennial Media was the seventh-largest *Est. FY mobile advertising platform by revenue in annual Date Deal revenue Rev. 2014, due primarily to its $238.4 million Year announced Buyer Target value of seller mul. ($M) ($M) (x) JumpTap acquisition, which closed in 2009 11/09/09 Google AdMob 750.0 95.0 7.9 November 2013 at an estimated 1.9x 2010 01/05/10 Apple Quattro Wireless 275.0 23.0 12.0 2010 01/20/10 Opera AdMarvel 8.0 4.0 2.0 forward-year revenue multiple. 2011 02/14/11 Tremor Media Transpera 15.8 7.2 2.2 2011 04/25/11 ValueClick Greystripe 70.6 31.0 2.3 2011 09/29/11 Viggle WatchPoints 2.5 0.0 NM Of the 15 mobile-ad deals we have tracked 2012 02/16/12 Opera Mobile Theory 18.0 26.3 0.7 since 2009, mobile-ad companies have sold 2013 01/02/13 Phunware TapIt 23.0 12.0 1.9 2013 04/01/13 Millennial Media Metaresolver 11.8 2.0 5.9 at an average forward-year revenue multiple 2013 08/12/13 Millennial Media JumpTap 238.4 122.7 1.9 of 3.2x. This is several turns lower than the 2013 09/09/13 Twitter MoPub 350.0 100.0 3.5 2013 12/03/13 Blinkx Rhythm NewMedia 65.0 32.6 2.0 overall mobile deals revenue multiple of 2014 01/07/14 Yahoo! Aviate 80.0 0.0 NM 6.2x forward-year revenue, based on the 2014 07/21/14 Yahoo! Flurry 300.0 210.0 1.4 2014 09/23/14 Millennial Media Nexage 107.5 47.2 2.3 95 mobile-media deal comparables in our Mobile Ad Deal Totals / Weighted Averages 2,316.8 713.0 3.2 database. As of October 21, 2014. * Forward year revenue estimate for the year following acquisition NM = Not meaningful. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

The iPad's Evolution Into a TV

he larger screen offered by a tablet has always been perceived as a benefit for Tmobile video viewing. Now data is validating that perception.

Weekly viewers of full-length TV/ In the third quarter of 2013, we asked online survey respondents if movies on smartphone/tablet, U.S., they watched full-length TV and films on their smartphone or tablet, % adult internet users and 11% answered that they did so weekly. When we asked the same (%) 25 question again in February 2015, the answer was 20%. Hulu's own 20% 20 reported usage data also confirms this trend.

15 11% 10 Expanding the scope of the question from a week to a three-month period,

5 35% of survey respondents said they had viewed long-form content on a

0 tablet or smartphone in the previous 90 days. And differences in viewing Q3 2013 Q1 2015 trends by age group underscore that younger audiences are adopting Survey sample size: 1,021 5,090 mobile video at a faster clip than older generations. For instance, 41% © 2015 SNL Kagan, a division of SNL Financial LC, of Millennials surveyed used their tablet for full-length TV and film estimates. All rights reserved. viewing, compared to just 16% of Baby Boomer tablet users.

Mobile video viewing by age generation According to our data analysis, video-specific Viewed a full-length movie/TV show on a smartphone apps as a percentage of all entertainment apps (%) Viewed a full-length movie/TV show on a tablet 45 41% grew to 65% of the category in first quarter 40 36% 2015, up from 55% in first quarter 2011. 35 32% 31% 29% While the entertainment genre — which most 30 28% publishers decide to use for video-heavy apps 25 20% 21% — has declined in share over the years, that has 20 16% 15 more to do with confused iPad publishers than a waning interest in mobile video. For instance, 10 7% 6% 5 1% in 2011, many app publishers classified their 0 apps as entertainment when games (Pocket Ants Preteens Teens Millennials GenX Boomers Seniors HD) or news (People Magazine) was probably Q. Which of the following statements or activities accurately reﬂects the [preteens or teenagers] in your household? Used a smartphone/tablet to view a full-length movie or TV show. a better fit. Base: Preteens – 549, teenagers – 390. Q. Which of the following activities have you performed on your [device] over the past 3 months? Base: Smartphone users – 1,748, tablet users – 1,401. © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved.

Most popular iPad free app genres, 2011-2015 (%) Other iPad identity changes include news 60 Games Productivity Entertainment News apps shrinking from a nearly 10% share of 50 top free iPad apps in first quarter 2011 to 40 a measly 0.1% in the first quarter of 2015. 30 Mobile games have boomed, with free iPad 20 game apps growing from a 30.4% share 10 to more than 50%, comparing the same 0 periods. And as consumers have tested Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 '11 '11 '11 '11 '12 '12 '12 '12 '13 '13 '13 '13 '14 '14 '14 '14 '15 the device's ability to replace a laptop, Genre market share by instances in weekly top 100 lists during quarter. the productivity genre has grown from a Includes free iPad apps only. Data starts January 19, 2011. 2.5% share in first quarter 2011 to more © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved. than 10% in first quarter 2015. Top entertainment apps, Q1 2011 vs. Q1 2015 2011 2015 When it comes to the kind of video ------Video-specific apps as % of all entertainment apps------consumers are watching, over-the-top 55% 65% ABC Player 123D Sculpt+ wins. The only video-specific apps to chart ABC's Grey's Anatomy Sync Amazon Instant Video every week in the first quarter — with the Adult Swim CBS Bones Disney Movies Anywhere exception of The Weather Channel — were Buzz Wire! Disney Royal Celebrations Netflix, Hulu Plus, Amazon Instant Video DIRECTV App for iPad FOX NOW Discovery Channel HD Hello Kitty Nail Salon and YouTube. Fandango Movies - Times & Tickets Hulu Plus finger drums! NBC Flowpaper Netflix For the first time, thanks to first-quarter Hulu Plus Olaf's Adventures premieres of its popular original series IMDb Movies & TV Talking Larry the Bird for iPad Laser Lights Talking Tom & Ben News for iPad "House of Cards" and its new show Live From the Red Carpet The Voice Official App "Unbreakable Kimmy Schmidt," the Netflix Live TV Box Lite Tom Loves Angela for iPad love finger scan Tom's Love Letters iPad app remained in the top 10 of all Meander U-verse iTunes free iPad apps all quarter long. The mood finger scan WATCH ABC Movies by Flixster, with Rotten Tomatoes - Free XFINITY TV Go next-most-popular OTT app was Amazon's Netflix YouTube Kids Instant Video app, which ended the first Oscar Backstage Pass OverDrive media Console quarter as the 39th most popular free PBS for iPad iPad app. Hulu Plus' rank steadily rose PEOPLE Magazine Pocket Ants HD throughout the quarter and it ended the Pocket Pond HD period in 54th place. Google's Chromecast Popular Science+ SnagFilms app made a cameo. Of no surprise to Talking Bacteria John, John & John for iPad longtime watchers of this space, Google's Talking Gina the Giraffe for iPad Talking PANDA HD YouTube Kids performed very strongly out Talking Roby the Robot for iPad of the gate, as American parents continue Talking Tom Cat for iPad TiVo to employ phones and tablets as pacifiers. True Grit TWCable TV Vogue XFINITY TV Non video apps in bold. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

Leading OTT iPad app rank, Q1 2015 Looking at just the content producers active 1 on iPad, Walt Disney Co. dominates. The 11 ------21 first quarter marked the 14th quarter in a 31 YouTube 41 Netflix row the Mouse House has topped our free- 51 Amazon Instant Video iPad-app list. In first quarter 2015, Disney 61 Hulu Plus 71 YouTube Kids had 18 different apps chart in the top 100 81 Chromecast free iPad charts in iTunes. The WATCH ABC 91 Disney Movies Anywhere 101 app was its strongest performer, followed by the games Marvel: Contest of Champions and Frozen Free Fall. 01/07/2015 01/14/2015 01/21/2015 01/28/2015 02/04/2015 02/11/2015 02/18/2015 02/25/2015 03/04/2015 03/11/2015 03/18/2015 03/25/2015 © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved.

Hollywood free iPad app leaders, Q1 2015 Weekly instances Rank Content producer App(s) in Top 100 Genre(s) 1 Walt Disney (ABC Digital Disney WATCH ABC (11), MARVEL Contest of Champions (9), 48 Games, Entertainment, Electronic Content Inc., Disney Frozen Free Fall (6), Disney Infinity: Toy Box 2.0 (3), Sports, Education Enterprises Inc., Gameloft, LINE Cinderella Free Corporation, ZEN Studios Ltd., ESPN Inc.) Fall (2), Disney Movies Anywhere (2), Disney Royal Celebrations (2), Mickey's Magical Math World by Disney Imagicademy (2), Spider-Man Unlimited (2), Cars: Fast as Lightning, ESPN, ESPN Tournament Challenge, LINE: Disney Tsum Tsum, Marvel Pinball, Mickey’s Magical Arts World by Disney Imagicademy, Olaf's Adventures, Temple Run: Oz, WatchESPN 2 Amazon Amazon App (12), Amazon Instant 36 Lifestyle, Entertainment, Video (12), Kindle (12) Books 3 Comcast / NBCUniversal (Gameloft, Despicable Me: Minion Rush (12), XFINITY TV Go (3), 19 Games, Entertainment, Sports NBCUniversal Media LLC, Comcast NBC (2), NBC Sports Live Extra, The Voice Official App Interactive Media) Google Inc. (video apps only) YouTube (12), YouTube Kids (5), Chromecast (2) 19 Photo & Video, Entertainment, Utilities, Navigation 5 Apple Inc. Beats Music 12 Music Hulu LLC Hulu Plus 12 Entertainment Netflix Inc. Netflix 12 Entertainment Pandora Media Inc. Pandora Radio 12 Music Spotify Ltd. Spotify Music 12 Music The Weather Channel LLC The Weather Channel App for iPad 12 Weather 11 Time Warner Inc. (Zynga Inc., Cartoon Looney Tunes Dash! (3), LEGO® Star Wars™: The 9 Games, Sports Network, Turner Sports Interactive Inc.) Complete Saga (2), NCAA March Madness Live (2), Legends of Ooo - Adventure Time, Sky Streaker 12 Clear Channel Broadcasting Inc. iHeartRadio for iPad 8 Music 13 CBS Corp. CBS (5), CBS News, CSB Sports 7 Entertainment, News, Sports 14 Viacom Inc. Nick Jr. (4), NOGGIN (2) 6 Education 15 News Corp. (FOX Broadcasting, Electronic FOX NOW (3), The Simpsons™: Tapped Out 4 Entertainment Arts Inc.) 16 DreamWorks (No Yetis Allowed Ltd., Pocket Shrek, Real Steel Champions 2 Games Reliance Big Entertainment UK Private Ltd.) 17 AT&T Inc. (AT&T Services Inc.) U-verse 1 Entertainment SoundCloud Ltd. SoundCloud 1 Music Total 232 Title placements in weekly top 100 lists as collected by SNL Kagan. Includes free iPad apps only. SNL Kagan collects the top 100 free iPad apps every Wednesday. © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved.

Buoyed by e-books and video, Amazon claimed the second spot in our Hollywood tables. Tied for third were Comcast/NBCUniversal Media, which was helped by Despicable A comprehensive Me: Minion Rush and the TV Everywhere XFINITY TV Go app, and Google's selection listing of Hollywood of video apps, including newbies Chromecast and YouTube Kids. free and paid iPad and iPhone video app leaders is available The Weather Channel is the only basic cable network app to never chart lower than in Appendix A of the No. 100 position since we started collecting this data in September 2012. Viacom's this report. Nick Jr. app and Disney's WatchESPN were the only other basic cable network apps appearing in the top 100 lists in the first quarter. Overall, throughout the years basic cable network iPad apps have performed relatively inconsistently, with the exceptions of WatchESPN and The Weather Channel.

Basic cable network iPad app ranking, 2012-2015 1 11 21 31 41 51 61 71 81 91 101 09/05/13 09/19/13 10/03/13 10/17/13 10/31/13 11/14/13 11/28/13 12/12/13 12/26/13 01/09/13 01/23/13 02/06/13 02/20/13 03/06/13 03/20/13 04/03/13 04/17/13 05/01/13 05/15/13 05/29/13 05/12/13 06/26/13 07/10/13 07/24/13 08/07/13 08/21/13 09/04/13 09/18/13 10/02/13 10/16/13 10/30/13 11/13/14 11/27/14 12/11/14 12/25/14 01/08/14 01/22/14 02/05/14 02/19/14 03/05/14 03/19/14 04/02/14 04/16/14 04/30/13 05/14/14 05/28/14 06/11/14 06/25/14 07/09/14 07/30/14 08/13/14 08/27/14 09/10/14 10/01/14 10/15/14 10/29/14 11/12/14 11/26/14 12/10/14 12/24/14 01/07/15 01/21/15 02/04/15 02/18/15 03/04/15 03/18/15

The Weather Channel WATCH TNT for iPad vh1 app WatchESPN CNN app for iPad WATCH TBS for iPad WATCH ABC Family Nick Nick Jr. MTV A&E HISTORY Lifetime WATCH Disney Channel WATCH Disney Junior WATCH Disney XD Animal Planet for iOS BET NOW Comedy Central Univision Deportes FXNOW

The Most Popular Mobile-Video Content

indings from the third quarter 2014 SNL Kagan Consumer Insights survey suggest that Fconsumer preferences in mobile-video content tend to mirror the traditional online video market, dominated by short-form video (e.g. YouTube) and movies (e.g. Netflix), followed by TV shows (e.g. Hulu). Survey respondents showed only modest interest in mobile-video delivery of TV news and, surprisingly, sports.

According to the survey, millennials represent about half of total viewers watching paid mobile video. The survey also found that traditional gender preferences for TV programming also extend to mobile video. Viewing of paid mobile video by age generation Paid video on Paid video on Overall, 35% of survey respondents reported viewing a smartphone a tablet full-length TV shows or movies on mobile devices (smartphones or tablets) in the previous 90 days. 8% 17% According to the survey, nearly six in 10 viewers Millennials of paid video on smartphones are millennials. Paid 32% 49% GenX 59% mobile video includes OTT services like Netflix, 34% Boomers or a TV Everywhere service such as Comcast's XFINITY or HBO GO. Millennials also account for

Q. Which of the following activities have you performed on your [smartphone, tablet] over approximately half (49%) of respondents viewing the past 3 months - viewed a streamed movie or TV show from an online video subscription service/viewed a streamed movie or TV program from your pay TV service provider website/ paid video on a tablet. viewed a streamed movie or TV program from a premium TV network? Base: Smartphones – 1,748, tablets – 1,401. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. Among those viewing paid mobile video, short- form video and full-length movies received the most interest for viewing from a smartphone. TV shows Ranked interest in viewing paid mobile-video content on a smartphone also ranked high. -- % viewing paid video content on a smartphone -- Full-length Short-form TV Live TV series movies video news sports programs Survey respondents who reported viewing paid (%) (%) (%) (%) (%) video on a tablet over the previous three months 1= highest interest 30 36 7 13 15 2 22 17 18 17 27 showed very similar interests in content. Compared 3 14 16 25 17 28 to smartphones, slightly fewer people ranked 4 18 17 28 17 21 5= least interest 17 15 23 36 9 short-form video as being of high interest for tablet Q. Please rank your interest in viewing the following types of video content on a viewing. However, more respondents reported high smartphone. Base: 441 smartphone owners who view paid video content on the device. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. interest in viewing full-length movies and TV shows on a tablet.

Ranked interest in viewing paid According to the survey, mobile-video content mobile-video content on a tablet preferences do not appear linked to age, as ---- % viewing paid video content on a tablet ---- Full-length Short-form TV Live TV series millennials, GenXers and Boomers all have very movies video news sports programs (%) (%) (%) (%) (%) similar interests in paid mobile-video content. 1= highest interest 38 25 6 11 20 2 23 21 14 15 27 The type of on-demand video services being 3 17 23 20 16 24 4 12 18 33 17 20 used, such as TV Everywhere, premium network 5= least interest 10 14 27 41 8 Q. Please rank your interest in viewing the following types of video content on a VOD, online subscription VOD, or online catch- tablet. Base: 533 smartphone owners that view paid video content on the device. up TV services, as well as the frequency of using © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. these services, also have little correlation with No. 1 highest interest in viewing mobile-video content preferences. paid mobile video content by gender Full-length Short-form TV Live TV series movies video news sports programs Examining mobile-video preferences by gender (%) (%) (%) (%) (%) shows similar interests among men and women Smartphone Men 31 32 6 20 11 for full-length movies and TV news. However, Women 28 41 8 4 20 men are much more interested in viewing live Tablet Men 36 27 7 17 13 sports on mobile devices. In contrast, women Women 41 22 5 3 29 expressed greater interest in viewing TV shows, Base: 441. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. as well as short-form video, on smartphones.

Highest-Rated iPad Video Apps

ccording to iTunes' collection of customer reviews, some of the highest-rated video AiPad apps in first quarter 2015 were The CW, History, HBO GO, DISH Network's DISH Anywhere, and World Wrestling Entertainment.

We broke down the leading iPad video apps into four categories: broadcasters, cable networks, multichannel providers and over-the- iPad video app rankings based on consumer ratings - broadcasters top. We then ranked the apps by the number of All Full stars consumers have rated them, with a rating 1-5 version Live episodes/ Rank Broadcasters rating reviews prog. VOD AirPlay of five being the best. Normally, we rank ties 1 The CW 4.0 65,844 X alphabetically; however, in this case we sorted FOX NOW 4.0 18,601 X PBS for iPad 4.0 5,465 X X ties so that the app with the most total reviews 4 NBC 3.5 30,624 X X X rises to the top — the logic being that the more 5 WATCH ABC 2.5 54,983 X X X CBS 2.5 31,163 X X people are in the sample, the stronger the rating. 7 FOX Sports GO 1.5 1,918 X Total ratings for all app versions. Ties ranked by total reviews. For the broadcasters, the top spot was actually a Video app rankings based on consumer reviews as of April 24, 2015. Includes free iPad apps only. three-way tie, with four stars attained for The CW, © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved. FOX NOW, and PBS.

iPad video app rankings based on consumer Most of the broadcaster apps offer full-episode ratings - basic and premium cable nets video on demand and live programming (in some All Full 1-5 version Live episodes/ cases, only with authentication). The CW's top Rank Basic cable nets rating reviews prog. VOD AirPlay spot is not a surprise, considering the long legacy 1 HISTORY 4.5 20,457 X X A&E 4.5 19,226 X X the company has had supplying its younger fan 3 WatchESPN 4.0 102,074 X X X base with on-demand app content. Fox News for iPad 4.0 78,041 X Lifetime 4.0 18,562 X Nick Jr. 4.0 420 X X Of the 23 leading basic cable network iPad 7 The Weather Channel 3.5 116,714 CNN app for iPad 3.5 27,920 X X X apps, A+E Networks' History and A&E apps tied WATCH Disney Channel 3.5 16,795 X X X for first with 4.5 stars, followed by a four-way Univision Deportes 3.5 16,323 X tie between Walt Disney Co.'s WatchESPN, Nick 3.5 10,808 X WATCH Disney Junior 3.5 6,223 X X X FOX News, Lifetime Television and Nick Jr., each WATCH Disney XD 3.5 4,495 X X X with a four-star rating. HBO GO tops the list of 14 Comedy Central 3.0 1,556 X Animal Planet for iOS 3.0 539 the three premium network iPad apps with a 16 NBC Sports Live Extra 2.5 23,680 X X rating of three stars. MTV 2.5 3,934 X X WATCH TBS for iPad 2.5 2,616 X X VH1 2.5 1,426 X X Of the nine leading multichannel provider iPad BET NOW 2.5 165 X X X apps, DISH comes out on top with 4.5 stars. 21 WATCH ABC Family 2.0 13,310 X X Comcast's XFINITY iPad apps scored four stars, WATCH TNT for iPad 2.0 3,463 X X 23 FXNOW 1.5 2,771 X followed by DIRECTV and AT&T's U-verse at All Full 3.5 and three stars, respectively. None of the 1-5 version Live episodes/ Rank Premium nets rating reviews prog. VOD AirPlay multichannel provider apps support Apple's 1 HBO GO 3.0 23,012 X X 2 Showtime Anytime 1.5 8,809 X X X AirPlay interface. Starz Play 1.5 2,048 X Total ratings for all app versions. Ties ranked by total reviews. Video app rankings based on consumer reviews as of April 24, 2015. Includes free iPad apps only. © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved.

iPad video app rankings based on consumer ratings - multichannel operators All Full 1-5 version Live episodes/ Rank Multichannel operators rating reviews prog. VOD AirPlay 1 DISH Anywhere for iPad 4.5 15,667 X X 2 Comcast (XFINITY TV / XFINITY™ TV Player / XFINITY TV Go) 4.0 40,311 X X 3 DIRECTV (DIRECTV App for iPad) 3.5 72,276 X X 4 U-verse 3.0 23,697 X X Verizon FiOS Mobile 3.0 13,714 X X Cablevision (Optimum for iPad) 3.0 4,440 X X 7 TWCable / TWC TV 2.5 15,026 X X Bright House (Bright House TV) 2.5 3,061 X X Cox TV Connect 2.5 2,445 X Total ratings for all app versions. Ties ranked by total reviews. Video app rankings based on consumer reviews as of April 24, 2015. Includes free iPad apps only. © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. All rights reserved.

iPad video app rankings based Finally, of the nine leading OTT iPad apps, WWE on consumer ratings - OTT and Google's YouTube Kids topped the charts All Full 1-5 version Live episodes/ with four stars. Of note is the low sample of Rank OTT rating reviews prog. VOD AirPlay total reviews for each of the apps: fewer than 1 WWE 4.0 5,902 X X X YouTube Kids 4.0 1,129 NA X 6,000 total reviews for WWE and just 1,129 3 Netflix 3.5 261,742 NA X X for YouTube Kids. Tied for third place in the Crackle 3.5 24,732 NA X X Disney Movies Anywhere 3.5 8,893 NA X X OTT charts by ratings are Netflix, Crackle, and 6 Chromecast 3.0 2,020 NA X Disney's relatively recent Movies Anywhere YouTube 2.5 153,006 NA X X Amazon Instant Video 2.5 13,954 NA X X app, all with 3.5 stars. 9 Hulu Plus 2.0 47,842 NA X X Total ratings for all app versions. Ties ranked by total reviews. Netflix also has the most reviews of all the Video app rankings based on consumer reviews as of April 24, 2015. Includes free iPad apps only. video iPads we compared at 261,742; YouTube N/A = not applicable. © 2015 SNL Kagan, a division of SNL Financial LC, analysis of Apple iTunes data. has the second-highest number of reviews at All rights reserved. 153,006, followed by The Weather Channel with 116,714.

The Pass-Back Effect Finally Gets OTT Traction

number of recently released OTT apps focusing on younger audiences seem to A be taking advantage of a trend we've been writing about for years: parents using smartphones and tablets to keep their kids occupied during a drive or at dinner.

The Disney Movies Anywhere iPad app launched in February 2014 and entered the iTunes charts at No. 1. The app provides a walled-garden marketplace for easy access to popular Disney films. Exactly a year later, Google's YouTube Kids app was released and also entered the charts in the top position among free iPad apps in the week of Feb. 25, 2015. The YouTube Kids app promises a "kid-safe" YouTube experience.

Then, in March 2015, Nickelodeon launched its new OTT subscription app, NOGGIN, aimed at preschoolers. The service costs $5.99 per month and includes age-appropriate hits like "Blue's Clues" and "Ni Hao, Kai-lan." Kabillion's app, launched in February 2015, is also geared toward kids under 5.

Other notable kids-focused OTT services include Ameba TV and Kidobi. For paid apps, subscription fees are roughly in-line with NOGGIN's roughly $5 monthly fee.

Selected OTT kids' content aggregators Selected Financial Estimated # of Revenue Service Backers titles Content cost Selected content partners models Selected devices with apps Ameba TV NA Thousands of $3.99/month Picture Box Distribution, subscription Android, iOS, Xbox 360, episodes Decode Entertainment, Google TV, Roku, Chromecast, NCircle Entertainment LG Smart TV Jim Henson Jim Henson NA Free ad-supported Jim Henson Company advertising Roku, Amazon Fire TV Family TV Company Kidobi NA Thousands of Free (ads, limited Endemol, Bellum advertising, Android, iOS videos content); $4.00/mo. Entertainment, Sky Vision subscription Kidoodle.TV A Parent ~90 TV series $4.99/month Hasbro, DHX, Nelvana subscription iOS, Android Media Co. Kindle Amazon Hundreds of $4.99/month (1 Sesame Street, Nickelodeon, subscription Kindle Fire, Kindle Fire HD FreeTime seasons child), $9.99/month Disney Unlimited (up to 4 children); discounted plans for Prime members Sesame Go Sesame ~200 episodes $3.99/month; Sesame Street, Pinky Dinky subscription Web-browser Workshop $29.99/year Doo Toon Calpacific Thousands of Free (limited Animasia, Astral Studios, SMC subscription iOS, Android, Roku, Kurio Goggles Equity Group episodes content); $4.99/mo. Entertainment Group 7, Meep!, WD TV Live, Nook, Polaroid Kids Tablet, OUYA, Nook HD, Google TV, Windows 8, smart TVs (Vizio, Samsung, Sharp, Panasonic) ToonsTV Rovio 16 series Free ad-supported Rovio Entertainment, National advertising iOS, Android, Roku, Samsung Entertainment "channels" Geographic Kids, Hasbro Smart TVs As of October 15, 2014. NA= not available. "Web-browser" is specified for Sesame Go as that is currently the only available way to use the service. © 2015 SNL Kagan, a division of SNL Financial LC, estimates and analysis. All rights reserved.

The OTT Onslaught and Consumer Appetite for Multiple Video Subscriptions

n addition to the mainstays of Netflix, Hulu and Amazon, a flurry of new OTT services Ilaunched in 2014 and first quarter 2015, including CBS All Access and HBO NOW. A couple of Virtual Service Providers (VSPs) have also popped up in 2015, including DISH's Sling TV and Sony's PlayStation Vue. As Video provider preference the lines between providers blur, one Multiple thing is certain: consumers have never providers: 27% 38% One Provider: Multichannel video had so many viewing options. 7% with no on-demand One Provider: Multichannel video with on-demand Including HBO NOW and NOGGIN, 20% One Provider: Multichannel video 11% with all content on-demand nine new OTT services have launched Multiple Providers: Multichannel already in 2015. And with all of these video and online services both One with on-demand Provider: OTT and VSP options, the question is 35% Multiple Providers: All on- 62% demand whether consumers will even want to manage several different subscription Question: Which of the following best represents your preferred method of acquiring TV entertainment? Base: Total Respondents - 2,552 services for video. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

Launch dates for select OTT aggregators, 2014 & 2015 XiveTV Docurama Shout! Channel Yaveo Factory TV Tennis CBS Midnight Kabillion HBO Pluto.TV Channel Plus ScreenHits All Access Pulp Jr. NOW

Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- 14 14 14 14 14 14 14 14 14 14 14 15 15 15 15

 Disney Movies Tubi Bollyvod Paula Deen Urban Movie Break CONtv Anywhere TV Network Channel Movies CuriosityStream  SoompiTV Sesame NOGGIN Street Go (formerly Pilotly Kdrama) WWE Network

For instance, a wrestling, tennis Age groups by video provider preference and ESPN fan might be able to pay (%) 18-24 25-34 35-44 45-54 55-64 65+ for each of three nontraditional 100 9% 11% 16% 20% 14% subscriptions separately — OTT 12% 80 17% 17% apps from World Wrestling 15% 27% 23% 60 18% 18% 18% Entertainment and the Tennis 17% 19% 40 23% 19% 21% Channel's, plus DISH Network's 17% 18% 15% 15% 20 12% Sling TV VSP (which includes 25% 12% 17% 12% 17% 0 8% ESPN) — but will they really One Provider: One Provider: One Provider: Multiple Providers: Multiple Providers: Multichannel video Multichannel video Multichannel video Multichannel video All on-demand want to? with no on-demand with on-demand with all content on- and online services demand both with on- demand Our third-quarter 2014 online Question: Which of the following best represents your preferred method of acquiring TV entertainment? Base: Total Respondents - 2,552 survey of 2,552 Americans found © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. that across all ages, nearly two- thirds of respondents (62%) preferred dealing with a single Multichannel video subscribers and cord cutters by video provider preference (%) multichannel video provider, 100 compared to 38% who preferred 28% One Provider: Multichannel video 36% multiple video providers. 80 with no on-demand 3% One Provider: Multichannel video 10% 60 with on-demand Unsurprisingly, our survey 23% One Provider: Multichannel video with all content on-demand results indicate millennials 40 40% 7% Multiple Providers: Multichannel were more likely to reply that video and online services both with 20 25% on-demand they were comfortable with 20% Multiple Providers: All on-demand 9% multiple providers for their 0 Multichannel Video Subscribers Cord Cutters / Cord Nevers video entertainment, while older Question: Which of the following best represents your preferred method of acquiring TV entertainment? demographics tended to prefer a Base: Multichannel Video Subscribers - 2,211; Cord Cutters / Cord Nevers - 341. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. single provider.

For instance, 20% of respondents who said they preferred multiple sources for TV and online video (linear and on-demand) were in the 18-24 age group, compared to just 8% who were 65 or older. On the flip side, only 9% of those who preferred a Our comprehensive single multichannel video provider (with no on-demand) were in the 18-24 age group, OTT aggregator database is available compared to 25% for those over 65. in Appendix B of this report. Cord cutters/nevers responded that they were more likely to prefer multiple services with on-demand video than other consumers. According to the survey, these cord cutters/nevers are also nearly twice as likely to prefer all video content to be from on-demand sources.

Rise of the Streaming Stick and Streaming Media Player

ridging the gap between OTT, mobile devices and the TV are streaming media Bplayers and streaming sticks. These are peripheral devices with the primary function of pushing online and mobile video to a TV screen.

While the larger streaming media players often ship with their own remote controls, many also have the option of using the device's mobile app on a smartphone or tablet as the remote control. Most streaming sticks require a smartphone or tablet app to be used as the device's remote control.

The three headliners in the space are Apple TV, Roku's boxes and Google's Chromecast. SNL Kagan estimates Apple had cumulatively shipped 25 million Apple TVs worldwide as of Jan. 15, 2015. Roku had cumulatively shipped 10 million streaming media players in the U.S. as of Sept. 16, 2014. We estimate Google has shipped 13 million Chromecasts globally since their mid-2013 launch.

Selected streaming media players & sticks launch dates Jul-13 Sept-13 Jan-15 Chromecast Sony 4K Ultra HD Media Player VUDU May-08 Oct-12 Spark Roku Aug-13 Oct-13 Roku Mar-15 Streaming TiVo Roamio OTA Samsung Smart Mar-07 Nov-08 Mohu Stick (HDMI) Media Player Apple TV WD TV Channels

2007 2008 2009 2010 2011 2012 2013 2014 2015

Streaming media players, such as Apple TV, Amazon Fire TV and Roku, are physically larger than the thumb-drive-sized sticks. They connect to a TV via an HDMI cable, and to the Internet through either Wi-Fi or Ethernet. The TiVo Roamio streaming media player can be used as a DVR in conjunction with a pay TV subscription and allows up to 450 hours of HD recording. But unlike any of its competitors, the device requires a $14.99 monthly service fee to operate. The Mohu Channels media player offers the functionality of its competitors and also provides an antenna to receive broadcast TV signals.

Apple TV streaming media player vs. Google Chromecast Streaming media sticks are smaller than streaming media players and have garnered significant popularity since Google launched Chromecast in July 2013. A number of competing devices have premiered, including the Amazon Fire Streaming vs. Stick, the Roku streaming stick, and the Vudu Spark. tv These devices connect to the HDMI port of an HD TV, and rely on Wi-Fi to stream content to a TV. Because streaming sticks rely on Wi-Fi rather than Ethernet, they are more susceptible to buffering delays and generally have less processing power © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. than streaming media players.

Selected streaming media players and sticks Launch Device name Company Selected content suppliers Free Premium Other features Device cost date

Amazon Fire TV Amazon Netflix, Hulu Plus, Amazon Instant Video, Yes Yes Gaming, dedicated $99.00 Apr-2014 HBO GO, YouTube gaming controller Amazon Fire TV Amazon Netflix, Hulu Plus, Amazon Instant Video, Yes Yes Voice control remote $39.00 Oct-2014 Stick HBO GO, YouTube Apple TV Apple Inc. Netflix, Hulu Plus, HBO GO, HBO NOW, Yes Yes Airplay $69.99 Mar-2007 YouTube Chromecast Google Netflix, YouTube, Hulu Plus, HBO GO Yes Yes Cast content from $29.99-$35.00 Jul-2013 selected apps or browser Mohu Channels Mohu Netflix, Hulu Plus, YouTube, TED Yes Yes OTA incorporation $149.99 Mar-2015 Netgear NeoTV Netgear Netflix, Hulu Plus, VUDU, YouTube Yes Yes Hundreds of channels $29.99-$59.99 2010 Nuvola NanoTech Netflix, Hulu Plus, YouTube, M-GO, Yes Yes 4K streaming $299.00- Jan-2014 Paramount Pictures $949.00 Roku Roku Netflix, Hulu Plus, Amazon Instant Video, Yes Yes Motion control games $49.99-$99.99 May-2008 YouTube, HBO GO, Showtime Anytime Roku Streaming Roku Netflix, Hulu Plus, Amazon Instant Video, Yes Yes Motion control games $49.99 Oct-2012 Stick (HDMI) YouTube TiVo Roamio OTA TiVo Netflix, Hulu Plus, Amazon Instant Video, Yes Yes OTA DVR $49.99 + $14.99/ Aug-2013 Vudu, YouTube month (1-year commitment) Samsung Smart Samsung Netflix, Amazon Instant Video, YouTube Yes Yes Linear TV pass-through $179.99 Oct-2013 Media Player Sony 4K Ultra HD Sony Netflix, Sony Video Unlimited 4K Yes Yes 4K streaming $499.99- Sept-2013 Media Player $699.99 VUDU Spark VUDU VUDU Yes Yes VUDU only $24.96 Jan-2015 WD TV Western Hulu Plus, VUDU, YouTube, SnagFilms Yes Yes Wide range of support $99.99 Nov-2008 Digital for local file formats © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.

Honorable mentions for prototypes stemming from Kickstarter campaigns include Mohu Channels, which incorporates OTA and streaming tech, and Matchstick, an inexpensive streaming stick based on Firefox OS.

Second-Screen Hype Subsides

ccording to a February 2015 SNL Kagan survey, nearly two-thirds (65%) of U.S. Aonline adult respondents said they surfed the Internet while watching TV. But while multitasking is common, second-screen apps remain a small niche of this activity.

Most standalone second-screen apps, including leaders Viggle and Beamly, have yet to crack more than a few million active monthly users despite years of operation. And while the stand-alone second-screen apps struggle with a small, fragmented audience base, Twitter and Facebook have amassed hundreds of millions of unique monthly mobile users. Many venture capitalists have abandoned the space as the second-screen hype never materialized into the audience sizes advertisers need.

As a result, in the past couple of years, many second-screen services have either been acquired or changed their business focus. One early second-screen app, GetGlue, changed its name to tvtag, was acquired by i.TV, and was then shuttered, all within the span of a year. And even with backers including NBCUniversal Media and Viacom, one of the more popular second-screen apps, Viggle revenue, Q1 2012-Q4 2014 Beamly (formerly ZeeBox), is in the midst of ($000) 8,000 adjusting its business model and focus. 7,000 6,000 The only public company of the bunch, 5,000 Viggle (a penny stock operating on a "going 4,000 concern" basis) generated $22.3 million in 3,000 2014 revenue. Cash flow remains elusive, and 2,000 revenue growth has not folllowed the hockey- 1,000 stick curve investors might expect from a 0 mobile company. We estimate Viggle monthly Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 active users were fewer than one million at

LTE Broadcast and ATSC 3.0 Update

hile neither service is available commercially to the public, Verizon Wireless and WAT&T Mobility have been actively experimenting with LTE Broadcast technology. Verizon showcased LTE Broadcast during the 2014 Super Bowl to an invited audience in Bryant Park, New York. AT&T also showcased its LTE Broadcast technology during the first-ever College Football Championship game on Jan. 12, 2015. Both Verizon Wireless and AT&T Mobility plan to commercially launch their respective LTE multicast services, and compatible devices, in the second half of 2015.

ATSC 3.0 is another proposed technology standard and the group behind it the Advanced Television Systems Committee expects the standard to move into candidate status in 2016. The standard would redefine broadcast spectrum to also enable two-way one-to- one connections in addition to broadcast one-to-many.

Mobile Video Technology Experts

ompanies providing the technology behind mobile video streams (transcoding, Chosting and streaming) grew revenue by 19.4% compared to 2013. It was a welcome turn of events after the floundering of KIT Digital, and its eventual bankruptcy, which muted the 2013 performance of the group. But the category as a whole is in sound shape. A bright spot is in international markets where OTT and TV Everywhere are in earlier stages of adoption. Mobile video technology experts by revenue, global, 2012-2014 Annual We estimate this group cracked a billion dollars in 2014 2012 2013 2014 chg. revenue, up from $860.3 mil. in 2013. MLB's MLB Advanced ($M) ($M) ($M) (%) MLB AM 277.5 356.8 442.0 23.9 Media division tops our charts by revenue thanks to providing Brightcove (BCOV) 88.0 109.9 125.0 13.8 streaming services for several leading media properties including MobiTV 69.4 75.0 88.5 18.0 QuickPlay 45.0 61.0 80.5 32.0 ESPN, WWE, CBS and most recently HBO NOW. Envivio (ENVI)* 39.1 41.7 43.2 3.6 Other 304.6 215.9 248.2 15.0 Total 823.6 860.3 1,027.5 19.4 We estimate QuickPlay, which has focused heavily on * Fiscal year. international markets for several years, outgrew its competition © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. in 2014 with an estimated 32% year over year revenue growth.

OTT Library Analysis: Netflix, Hulu Plus and Crackle

ver-the-top (OTT) video services generate a lot of activity in the content-acquisition Ospace, and have also increasingly moved toward producing original content. Our estimates show that Netflix's library of movies has gradually decreased over the past two years as Hulu Plus's has expanded. Although Sony's Crackle is a popular platform for long-form content viewing, we estimate that its library is quite small.

Netflix, Hulu Plus and Crackle The three services rely on different models: Netflix is subscription- streaming catalog figures, Dec. ‘14 only; Crackle is ad-supported only; and Hulu Plus requires a Netflix Hulu Plus Crackle subscription, but also shows ads. These differences, as well as the Movies 6,558 6,223 113 TV series* - 3,819 71 number of users, have an impact on revenue and thus the quality * The number of seasons and episodes varies by series. © 2015 SNL Kagan, a division of SNL Financial LC, estimates and amount of content each provides. The comparison is not from company and industry data. All rights reserved. apples-to-apples (especially with Crackle included), but does dig into a few quantitative characteristics of each library.

Whether its plan was to outright increase its content library or if that happened secondarily, Hulu Plus has shown impressive growth in the scale of its content. Through December 2014, movies available Hululu Plus librarlibrary,y,y DecDec.. '1111 - DecDec.. '1414 to Hulu Plus subs 7,000 Movies increased by 150.9% 6,000 TV Series compared to December 5,000 2011, by 75.7% since 4,000 December 2012 and by

3,000 44.2% since December 2013. Available TV 2,000 series grew 138.7%, 1,000 66.2% and 28.3% Jan-14 Jan-12 Jan-13 Oct-13 Oct-12 Oct-14 Apr-14 Apr-12 Feb-14 Feb-12 Feb-13 Sep-13 Sep-12 Sep-14 Mar-14 Mar-12 Mar-13 Dec-13 Dec-11 Dec-12 Dec-14 July-12 July-13 July-13 July-14 Nov-13 Nov-12 Nov-14 Aug-13 Aug-13 Aug-12 Aug-14 over the same periods, May-14 May-12 May-13 June-12 June-14 © 2015 SNL Kagan, a division of SNL Financial LC, estimates from company and industry data. All rights reserved. respectively.

Hulu Plus' movie catalog Dec. '14, yearly breakdown Numbermber ofof mmoviesovies 700 600 500 400 300 200 100 0 1900 1903 1906 1909 1912 1915 1918 1921 1924 1927 1930 1933 1936 1939 1942 1945 1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014

The total figures for Netflix's content library have consistently moved in the opposite direction as Hulu's. While there is movement on a month-to-month basis, the overall trend is clearly a negative one, with movies on Netflix's streaming service having fallen steadily, but gradually, over the past few years. From three years prior, the number of movies has dropped 35.4% through December 2014, 29.3% since December 2012 and 5.4% since December 2013.

Netﬂix movie streaming library, Dec. '11 - Dec. '14 12,000

10,000 Movies

8,000

6,000

4,000

2,000

0 4 3 4 2 3 3 4 2 4 4 3 4 4 3 2 3 3 2 4 3 2 2 2 4 3 3 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ------y y y y e - e - b b b ar - ar - ar - pr-1 4 pr-1 2 ec-1 4 ec-1 3 ec-1 2 a y ec-1 1 a y a y a n a n a n ep-1 4 ep-1 3 ep-1 2 e e e u g u g u g u g u l u l u l u l J J J Oc t Oc t Oc t A A F F S F S S u n u n M D D M M D D J J J J Nov - Nov - Nov - A A A A M M M J J © 2015 SNL Kagan, a division of SNL Financial LC, estimates from company and industry data. All rights reserved.

Analyzing the estimated total library figures provides high-level insight into the general size of the collection, while the library's distribution by year is useful to understand its age. Netflix's movie library as of December 2014, for example, shows a distinct increase in the number of films for each year beginning in the mid-nineties, with the most populated year being 2012, for which there were 885 films. The median year for a film in the library is 2009.

Netﬂix's movie catalog Dec. '14, distribution by year Numberber ooff mmoviesovies 1,000

800

600

400

200

0 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 © 2015 SNL Kagan, a division of SNL Financial LC, estimates from company and industry data. All rights reserved.

Due to the fashion in which Hulu's TV series catalog was estimated, we're unable to glean much in the way of yearly distribution; however, the movie catalog provides insight. The distribution has a long tail dating back to the early 1900s, but doesn't pick up steam until the late 1990s. Like Netflix, 2012 was the year with the most movies, at 625. The median year for a movie was 2008.

Crackle's library of streaming videos is much smaller and has a distinct yearly distribution profile. As opposed to Netflix and Hulu Plus, 2006 was the year with the most movies for Crackle; the median year for a movie was 2002. TV series on Crackle had a median year of 2009. The year 2011 had the most series, with eight.

Crackle's movie catalog Dec. '14, yearly breakdown Numberumber ofof moviesmovies 16 14 12 10 8 6 4 2 0 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Crackle's TV series catalog Dec. '14, yearly breakdown Numberumber ooff seriesseries 10

0 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 © 2015 SNL Kagan, a division of SNL Financial LC, estimates from company and industry data. All rights reserved.

TV Everywhere Library Update

he buzz surrounding the launch of DISH Network's Sling TV and the likelihood Tof other over-the-top multichannel packages coming down the pipe have taken the spotlight from multichannel distributors' initial TV Everywhere efforts. Yet our January 2015 survey of movies and TV series available for authenticated multiscreen access from seven operators shows the catalogs bulking up, both quantitatively and in terms of exclusivity with regard to Netflix and Hulu Plus. TV Everywhere movie universe* Our analysis of TV Everywhere libraries for AT&T U-verse, Charter DIRECTV, Cox 2,593 Communications, Comcast, Cox Communications, DIRECTV, DISH Communications Charter, 3,793 Network and Verizon Communications' FiOS collects the movies 1,232 offered by each operator. It also lists their TV series, counting each title only once, regardless of the number of episodes available. Finally, the Total unique movies*, Comcast, 18,834 4,630 study compares each offering to the Netflix and Hulu Plus catalogs

DISH Network, and analyzes the exclusivity of each operator versus the other six. 7,247 Note that Time Warner Cable is not included, as the company's TV Verizon FiOS, 6,141 Everywhere service does not allow for a reliable surveying process. AT&T U-verse, 6,211 Analyzing the expansive list of 18,834 unique movies indicates

* Unique titles oﬀered by listed multichannel video that, on average, slightly over 80% of the group's movie catalog was programming distributors. not available on either Netflix or Hulu Plus at the end of January. Companies included: AT&T; Charter; Comcast; Cox Communications; DISH Network; DIRECTV; and Verizon. The exclusivity for the listed operators' TV series library was even © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. greater in relation to Netflix, at 92.4%. Unsurprisingly given Hulu Plus's relationship with major TV networks, our analysis shows that an average 41.2% of the group's TV series were offered on the popular OTT aggregator.

Comcast's XFINITY Online offered a portfolio of more than 4,600 movies and more than 4,200 TV series at the end of January 2015. This is up significantly from the 2014 tally. Drilling down through the data shows that 91% of the MSO's TV Everywhere movie library was not available on Netflix. Approximately 67% was not available on Hulu Plus. On the TV series front, these metrics stood at 96% and 48%, respectively.

In 2014, Comcast reaped the rewards of its aggressive push to promote its TV Everywhere services. Vice Chairman and CFO Michael Angelakis at a December 2014 investor conference said, "We have millions of people accessing our TV Everywhere outside the home and download to go, and the number of apps being downloaded is pretty dramatic."

Comcast's decision to live stream 11 hours of Super Bowl-related broadcasts without any authentication requirements, including the game and halftime show, on Feb. 1, 2015, underscores the company's focus on TV Everywhere promotional efforts at a time when DISH's Sling TV carries the potential to reshape the video-delivery landscape.

Charter, through its TV Everywhere service, offers 3,793 movies. In comparison to top MSO Comcast, a greater number of the cable operator's movies and TV series were available on Netflix in January, at 25.3% and 14.5%, respectively. The story is the opposite when cross- referencing the two Analysis of TV Everywhere movie catalogs MSOs' movie and AT&T Cox DISH Verizon U-verse Charter Comcast Comm. Network DIRECTV FiOS Average TV series catalogs Total 6,211 3,793 4,630 1,232 7,247 2,593 6,141 4,550 with the Hulu Plus % Offered on Netflix (%) 9.0 25.3 9.3 48.1 20.0 12.1 11.0 19.3 % Offered on Hulu Plus (%) 47.3 4.5 33.4 7.1 33.6 5.7 6.3 19.7 library, with Charter % Offered by Other MVPDs* (%) 55.2 80.8 68.2 35.1 80.9 77.1 36.2 61.9 showing greater TVE catalogs surveyed in January 2015 from MVPD websites. * Other MVPDs include all listed operators minus the company highlighted in each column. exclusivity than its © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. peer.

TV Everywhere TV series universe Privately held Cox Communications counted 1,232 movies in its TV Charter DIRECTV, Everywhere library in January, an estimated 48.1% of which were Cox 249 1,273 Communications offered on Netflix and 7.1% on Hulu Plus. Comparing Cox's catalog Verizon 543 FiOS, to the movies offered by the other MVPDs listed shows that nearly 1,536 65% of the Cox movies were exclusive. On the TV series side, there Total unique TV Series*, 7,631 was greater overlap with the other MVPDs.

AT&T U-verse, After DISH Network, telco services Verizon FiOS and AT&T U-verse Comcast, 4,205 2,215 hold the largest movie catalogs in our analysis. Few of their titles are DISH Network, available on Netflix. Their overlaps with movies offered on Hulu Plus 3,726 contrast starkly: 6.3% for Verizon FiOS vs. 47.3% for AT&T U-verse. The story is similar on the TV series side. * Unique titles oﬀered by listed multichannel video programming distributors. Companies included: AT&T; Charter; Comcast; Cox Communications; DISH Network; DIRECTV; and Verizon. AT&T might not be far behind, as its acquisition of DIRECTV © 2015 SNL Kagan, a division of SNL Financial LC, estimates. carries with it the strong possibility of a large-scale wireless-based All rights reserved. TV product. "When you have 20 million DIRECTV customers that are very, very high- Analysis of TV Everywhere TV series catalogs AT&T Cox DISH Verizon end customers, U-verse Charter Comcast Comm. Network DIRECTV FiOS Average and seeing what Total 2,215 249 4,205 543 3,726 1,273 1,536 1,964 % Offered on Netflix (%) 5.6 14.5 4.3 6.6 3.8 7.3 10.9 7.6 the wireless % Offered on Hulu Plus (%) 64.2 26.5 52.5 26.2 50.3 45.4 23.5 41.2 penetration rate % Offered by Other MVPDs* (%) 79.5 98.8 65.1 48.6 67.0 78.3 54.2 70.2 TVE catalogs surveyed in January 2015 from MVPD websites. that we have in that * Other MVPDs include all listed operators minus the company highlighted in each column. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. customer base — it looks really good, the opportunity to be able to sell mobility into those channels," AT&T Chairman and CEO Randall Stephenson said in the company's fourth-quarter earnings call Jan. 27.

As of January, DIRECTV counted 2,593 movie titles and 1,273 TV series, with the company's movie catalog boasting a relatively high level of exclusivity compared to both Netflix and Hulu Plus; however, this is not necessarily the case on the TV series front.

According to an informal survey of the primary TV apps created to extend access to content on alternative devices by cable, DBS, and telco providers, the selection of devices is slowly expanding toward full support of iOS, Android and now Amazon tablets and smartphones, however, progress on the smart TV, streaming media and game console fronts remains isolated.

Time Warner Cable, Comcast and Verizon currently cater to the highest variety of devices, including various game consoles and Smart TVs. Other providers such as Cox Communications, AT&T and DIRECTV, meanwhile, have focused the availability of content through iOS, Android and Amazon portable devices.

U.S. multichannel service provider video app highlights Operator Name Devices Use/function U-verse for tablets Tablets On-demand content, remote control, DVR scheduling U-verse for mobile Smartphones Select on-demand content, remote control, TV listings, DVR scheduling AT&T U-verse U-verse easy remote Tablets/smartphones Remote control, TV listings, DVR scheduling U-verse website Laptop/desktop Live linear channels and on-demand content through web browser Bright House Bright House TV app Tablets, smartphones, laptop/desktop Live linear channels, DVR scheduling, TV listings Networks Remote DVR manager Tablets, PC, mobile devices DVR scheduling, TV listings Optimum app For PC Desktop/laptop Live linear channels, on-demand content, TV listings, DVR scheduling Cablevision Optimum app with Smartphones/tablets Live linear channels, on-demand content, TV listings, integrated TV to Go remote control, DVR scheduling feature Charter app Smartphone/tablet Live linear channels, TV listings, DVR scheduling Charter Charter.net Laptop/desktop Live linear channels, on-demand content, TV listings XFINITY TV Go app Smartphone/tablet Live linear channels, on-demand content, TV listings, DVR scheduling XFINITY TV app Smartphone/tablet Live linear channels, on-demand content, TV listings, remote control, DVR scheduling Xfinitytv.comcast.net Laptop/desktop Live linear channels, on-demand content, TV listings Comcast (web portal) XFINITY On Demand Smartphone/tablet/smart TV/game Purchased content through XFINITY on Demand purchases app console/laptop/desktop XFINITY on Xbox Game console On-demand content XFINITY TV Remote app Smartphones/tablets Remote control, TV listings, DVR scheduling Contour app Smartphone/tablet Live linear channels, on-demand content, TV listings, remote control, DVR scheduling Cox Cox TV Connect Smartphone/tablet/laptop/desktop Live linear channels, TV listings Cox.com web portal Laptop/desktop On-demand content DIRECTV app/web portal Smartphone/tablet/laptop/desktop Live linear channels, on-demand content, TV listings, DIRECTV remote control, DVR scheduling GenieGO app Smartphone/tablet/laptop/desktop Recorded content through DVR DISH Anywhere Smartphone/tablet/laptop/desktop Live linear channels, on-demand content, TV listings, DISH Network app/website DVR scheduling Time Warner TWC TV® app/website Smartphone/tablet/smart TV/game Live linear channels, on-demand content, TV listings, Cable console/laptop/desktop remote control, DVR scheduling Suddenlink2GO app/web Smartphone/tablet/laptop/desktop Live linear channels, on-demand content, TV listings Suddenlink portal FiOS TV to Go/FiOS Smartphone/tablet/game console Live linear channels, on-demand content, TV listings, mobile app DVR scheduling Verizon FiOS web portal Laptop/desktop Live linear channels, on-demand content, TV listings, DVR scheduling Table as of April 2015. List does not include authenticated access to TV network apps such as Turner2Go. © 2015 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved.