THE FRAGMENTED A DEEP DIVE INTO TODAY’S NEW VIEWINGOmah AUDIENCES presentation BY MEDIAHUB AS THE MEDIA AGENCY FOR CHALLENGER BRANDS, IT IS ALWAYS OUR GOAL TO FIND NEW WAYS TO CONNECT WITH AUDIENCES IN THIS EVER-CHANGING MEDIA LANDSCAPE Those questions set us on a path for developing this custom research on today’s Clearly the world of entertainment, like many other new audience. We developed a methodology (see next page) that centered on industries facing titanic disruption, is being turned on its head. Yet as we looked at the research and our proprietary insights survey tool, Scout. Scout is built to identify the unique conversation in the industry today, we found a lot of behaviors of today’s media world. We "elded two custom online surveys — one talk about rapid adoption rates, but we saw little that focused on the changes in TV, and the other on the changes in movies. Each truly dug into the impact of this change on the survey was "elded to 1,200 respondents with a sample size re!ective of the U.S. audiences experiencing them. And as the media online population. But we didn’t stop there. We partnered with Entertainment agency for multiple entertainment brands, including Weekly on an additional custom survey with their proprietary “Front Row Panel,” Net!ix, MTV, VH1, BET, PBS, and Global Road as well as an interview with senior writer Anthony Breznican. We also tapped Entertainment, we needed to know more about how into multiple partners with a unique view of the space, including TVision people view this world, from their motivations to Insights, Samba TV, FANDOM, and The Daily Beast. This data led us to some their attitudes to their behaviors. unique insights on today’s new viewer. sc utTM 2 METHODOLOGY To perform this research, Mediahub "elded two custom Scout surveys. Scout is our proprietary survey tool that is designed to glean insights about the modern-day media consumer. The "rst study, the “TV study,” posed 91 questions to 1,264 respondents, and the second, the “movie study,” posed 78 questions to 1,279 respondents. Both surveys were nationally representative of the U.S. online population across age, gender, race, ethnicity, and urbanicity, with a 95% con"dence level. The respondents were English- speaking Internet users ages 13–75. These online surveys were "elded during April 2018. In addition to our Scout surveys, we worked with Entertainment Weekly to "eld a custom online survey to their Front Row Panel—a panel of entertainment enthusiasts with a total of 2,172 respondents. We then interviewed Entertainment Weekly senior writer Anthony Breznican. We incorporated data from our proprietary Scout 2018 baseline survey. Finally, we interviewed multiple media partners such as The Daily Beast, TVision Insights, and Samba TV for additional insight into the rapidly changing landscape of TV and movies. Disclosure note: Mediahub is the media agency for multiple TV and entertainment brands, including Net!ix, BET, VH1, MTV, PBS, and Global Road Entertainment. This study was paid for and "elded by Mediahub; our clients’ participation in this research was limited to suggesting questions for the custom surveys. sc utTM 3 KEY QUESTIONS WE WANTED TO ANSWER How do people even de"ne “TV” today? How truly ingrained are new technologies like Net!ix and YouTube with today’s viewers? “TV” Are the likes of Net!ix, YouTube, and Amazon Prime just for younger, more educated, or wealthier people? How do people choose between TV, movies, and digital video today? How and why do people choose what to watch and when to watch it? CHOICE How often are people watching TV and movies together rather than alone? Who even goes to a movie theater anymore and why? Can blockbusters and upgraded theaters keep the movie industry alive? MOVIES How do entertainment companies survive in a world with endless content? How will the world of streaming and premium subscriptions a$ect advertising? Do people tolerate advertising at all in a world of premium subscriptions to SVOD and MVOD? Will people just “buy their way” out of advertising? 4 ADVERTISING 4 01. SECTIONS 02. THERE IS A NEW 03. KIND OF AUDIENCE— THE FRAGMENTED THE FRAGMENTED THE FRAGMENTED ARE EMPOWERED, WATCH ALONE —AND THEY HAVE THEIR BUT OVERWHELMED OWN DEFINITION OF “TV” 05. 06. 04. THE CLOCK AND THE FRAGMENTED THE FRAGMENTED ARE THE CULTURE DRIVE WILL TOLERATE WATCHING MOVIES AT MUCH OF THE SOME ADVERTISING, HOME MORE OFTEN FRAGMENTED’S CHOICE WHEN THEY SEE IT 5 KEY TAKEAWAYS 6 WHAT WE FOUND • “TV” is no longer the content and the delivery system; it’s !uid by de"nition. KEY • Life stage is the biggest factor determining how people de"ne “TV” with HHI, urbanicity, and ethnicity also playing a role, albeit a a lesser one. TAKEAWAY • Net!ix is not only the "rst place most people go when they turn on their TV, but also so loved that it ranks with NO. 1 vacations and ca$eine in importance. • YouTube is an obvious staple for young people, but invisible to older audiences. • Live viewing just isn’t what it used to be. • Older, rural audiences, plus the cable companies’ (MSOs) connection to ISPs, will keep conventional TV alive. THERE IS A NEW KIND OF AUDIENCE— WHY YOU SHOULD CARE THE FRAGMENTED YOUR AUDIENCE HAS ITS OWN VERSION OF “TV.” The very de"nition of “TV” as a uniform experience is no —AND THEY HAVE longer valid. The “Fragmented”—mainly segmented by life stage—now have vastly di$erent and unique experiences THEIR OWN with video entertainment. Each group perceives and watches TV di$erently, from what content they choose to how they watch and when they watch. DEFINITION OF “TV” START PLANNING HOLISTICALLY, NOW. It’s time to stop looking at the world of silos like “TV” and “digital video” and quickly start planning video entertainment and advertising through a holistic “one video” plan that’s custom to the experience of the audiences you're targeting. Viewers don’t think about it or consume it in silos, so you shouldn’t either. News !ash—if you still have a “TV” team and a “digital” team, you are behind the times. GET COMFORTABLE WITH NEW WAYS OF REPORTING. As viewing fragments and becomes increasingly hard to measure across di$erent devices that have fundamentally di$erent baselines, agencies and marketers alike should get comfortable with new ways of reporting to ensure they’re evaluating the whole viewership pie. The Turner ad sales chief, Donna Speciale, said it best: “Linear television uses outdated metrics that only capture a third of the viewing audience.” Turner president David Levy took it a step further to say, “We are in a new era of media, and it’s time to retire the Nielsen television metric.” 7 7 WHAT WE FOUND KEY • The Fragmented, especially younger people, clearly love the power to choose content across devices. TAKEAWAY • Yet they’re overwhelmed with choice and have a love–hate relationship with “TV.” NO. 2 • They can only watch so many shows, and are abandoning programming as quickly as they choose it. • A surprising number of people “yearn for simpler times.” THE FRAGMENTED WHY YOU SHOULD CARE ARE EMPOWERED, YOUR MEDIA BUYING WILL REQUIRE CONSTANT EVALUATION. With very few exceptions, the days of BUT OVERWHELMED reliable shows and content for advertisers are coming to a rapid end. The Fragmented are a "ckle bunch, so a constant evaluation of their tastes and behaviors is needed. THE COMPETITION FOR YOUR CONTENT WILL BE IMMENSE. The entertainment industry is headed for a massive glut of content. Net!ix, Amazon, and Disney are already investing in a big way. Meanwhile Apple, Facebook, and Google, companies with near trillion-dollar valuations, are getting aggressive in the space. At some point, supply will greatly outweigh demand, and the content bubble will burst. A small set of players may end up dominating the entire entertainment industry and the TV may end up looking a whole lot like a smartphone. As senior writer for EW Anthony Breznican put it, “People are making these things that no one is seeing; at some point they’ll need to dial that back because too much food is going to waste. Some streaming services will collapse, and the big ones will survive.” CRITIC REVIEWS ARE BECOMING MORE IMPORTANT, ESPECIALLY FOR YOUNGER AUDIENCES. Because Gen Z and Millennials have grown up with Rotten Tomatoes scores as the litmus test of good or bad, they trust it implicitly. However, this can be a dangerous game, because, as we know, critics and consumers don’t always see eye to eye. When applicable, incorporate ratings into media planning and creative to serve as a proof point for the younger generations. 8 8 KEY TAKEAWAY NO. 3 WHAT WE FOUND • More people are watching TV alone than ever. • Bingeing is killing together time. • Co-viewing (watching together) has become more of a compromise. THE FRAGMENTED WATCH ALONE WHY YOU SHOULD CARE SOLO VIEWING MEANS MORE OPPORTUNITY FOR PERSONALIZED MARKETING. Personalized, dynamic video is evolving. With more solo viewing, the opportunity to create more personalized advertising in the video space will increase. REPORTING ON HOUSEHOLDS SHOULD BE CLOSELY SCRUTINIZED. With alone viewing on the rise, there are fewer shared TV experiences that can claim a true household rating. On the other hand, as viewing shifts to IP-connected TV sets, these household ISP connections may hold the key to providing 1:1 ratings through device graphing, which will "nally enable personalization at scale. CONTENT VARIETY WILL CONTINUE TO EXPLODE. With so many people watching on their own, and despite "erce competition, new types of content will continue to proliferate.