ECONOMICS OF MOBILE 2015 EDITION © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved. One SNL Plaza, Charlottesville, VA 22902 | Phone: 866.296.3743 | www.snlkagan.com Published May 2015 | ISBN: 978-1-939835-437 ECONOMICS OF MOBILE 2015 EDITION © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved. 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 © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved. i Economics of Mobile Programming SNL Kagan Industry Report 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 © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved. ii Economics of Mobile Programming SNL Kagan Industry Report About the Publisher SNL Kagan is the ultimate resource for complete financial intelligence and analytics on the broad and dynamic media & communications industry, including the broadcasting, cable, TV network, motion picture, wireline, wireless, satellite, and Internet media sectors. The SNL Kagan suite of products integrates comprehensive data, forecasts, expert analysis and breaking news into an electronic database and analytical tools that are available online and updated around the clock. Whether you're an investment banker or media company executive, a research analyst or a portfolio manager, SNL Kagan provides you with unlimited 24/7 access to the relevant information you need to understand evolving trends, anticipate change and make the best decisions. SNL Kagan combines the 40-year heritage of Kagan Research with parent company SNL Financial's 25 years of experience in providing essential guidance to Wall Street and America's top corporations. www.snl.com 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 Unless allowed by a full site license, databook material may not be reproduced, retransmitted electronically, including via email, intranet or Internet, or recopied in any form, in whole or in part, without prior written permission, whether for internal business use or otherwise. Violators risk criminal penalties and civil damages of up to $150,000 per offense. We vigorously prosecute copyright infringers. Site licenses are available (for license information contact [email protected]). © 2015 SNL Kagan, a division of SNL Financial LC. All rights reserved. This research report is prepared and circulated for general informational purposes only and is not an offer, nor a solicitation to make an offer, to buy or sell any securities or options, futures or other derivatives related to such securities. Investors should seek financial advice regarding the appropriateness of investment strategies discussed or recommended in this research report. The information contained herein was obtained from sources SNL Kagan believes to be reliable, however SNL Kagan has not independently verified all the information given in this document. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this research report. Some of the information in this report may be based on historical information, which may not have been updated. Statements regarding past performance may not be indicative of future returns and statements regarding future prospects may not be realized. All opinions and estimates expressed are our current opinions and estimates as of the date appearing on this material only and are subject to change without notice. SNL Kagan, its parent, its affiliates or employees preparing this report may have a position in securities of any company or derivatives related to such securities referred to or recommended in this report. An employee of SNL Kagan, its parent or affiliates