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Manatt-Vorhaus Digital Strategy Study

Digital Media Consumption

July 2019

1 Methodology

Nationally representative online survey of N=2,007 online users

– Ages 18+

– Sample matched to the U.S. Census for age, gender and race

– Study focus: media attitudes and behaviors of consumers on a broad

range of topics

– Data collected June 13–17, 2018

– Average survey length 20 minutes

– Respondent recruitment completed by a high-quality online research panel

and data collection firm

Manatt-Vorhaus Digital Strategy Study – 2019

2

New Frontiers


3 The New Digital Frontier—Adoption Begins With Awareness

24%

48%

57%

70%

76%

86%

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

Blockchain

Augmented reality

Cryptocurrency

Artificial intelligence

Virtual reality

Consumer drones

Percentage Aware of New Technologies

Total sample of online users age 18+


Media consumption survey: Total N=2,007. Q150: Have you heard the following terms or concepts before?

4 Cryptocurrency Familiarity Is Solid, With Many Likely to Buy In

17%

23%

25%

16%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cryptocurrency

Cryptocurrency Level of Familiarity

Not familiar at all 2 3 4 Very familiar


21% likely to buy

cryptocurrency in

the next 12 months

66% unlikely to buy

cryptocurrency in

the next 12 months

Heard of cryptocurrency N=1,192. Q150.1: How familiar are you with cryptocurrencies? Cryptocurrencies are

digital or virtual currencies that use cryptography for their security features. This security feature makes it hard to

counterfeit a cryptocurrency. Q150.3: How likely are you to buy any cryptocurrency in the next 12 months?

5 17% Own a Consumer Drone—Future Growth Unlikely to Take Off

14%

65%

4% 8%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Familiarity With Consumer Drones

I own and regularly use a drone

I own and do not regularly use a drone

I use a drone regularly, but do not own one

I have seen drones before, but I have never used one

I am unfamiliar with this concept


8% of nonowners are

likely to buy a

consumer drone in

the next 12 months

72% are unlikely to buy

a consumer drone in

the next 12 months

Total N=2,007. Q154: How familiar are you with consumer drones? Consumer drones are small remote-controlled

vehicles that fly using mini-rotors that are often used by owners to take pictures and videos from high-altitudes that

can be streamed to a mobile device such as a smartphone or tablet. Q155.2: How likely are you to buy a consumer

drone in the next 12 months? (Based on nonowners N=1,668)

6

Viewing Platforms


7

Half of U.S. Adults Watch Online Video Daily—Two-Thirds of Younger Adults

50%

24%

6% 7% 13%

67%

21%

5% 3% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Daily Once a week ormore

Once a month ormore

Less than once amonth

Never

Frequency of Online Video Viewing on Computer, Smartphone, Tablet or Smart TV

Total 18–34


Total N=2,007. Q34: About how often would you say you watch online video? This is any video you view on a

computer, laptop, smartphone, tablet, or TV connected to the Internet.

8 Online Video Is Watched Across Multiple Devices

62% 61% 55%

52% 51%

72%

56%

34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Computer/laptop Smartphone On a TV set connectedto the Internet

Tablet

Devices Used Once a Week or More to Watch Online Video

Total 18–34


Smartphone Owns Digital Video Among Those 18–34

Online video viewers, N=1,739. Q34.1A: Which devices do you regularly use (at least once a week) to watch

online video content? Select all that apply.

9 Television Remains the Primary Medium for Entertainment

43%

16% 15% 11%

8% 5%

2%

19%

29%

21%

11% 15%

4% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Televison Smartphone Laptop or PC Connected-TVdevice likeApple TV,

Roku,Chromecast

Video gameconsole

Tablet Nne of theabove

Total 18–34


Smartphone Dominates With 18–34 Population

Total N=2,007. Q1.2: What is your primary medium for entertainment?

10 SVOD Is a Huge Market – 74% of Online Users Subscribe to a Service

59%

41%

32%

15%

10% 8% 8% 7% 6%

2% 2%

0%

10%

20%

30%

40%

50%

60%

Netflix AmazonPrimeVideo

Hulu HBO Now YouTubeRed

CBS AllAccess

Showtime Starz PlayStationVue

fubuTV Filmstruck

1.6 = average number of paid VOD/streaming services

online video viewers say they are willing to buy

beyond what they already have


Nearly 6 in 10 Subscribe to Netflix

Total N=2,007. Q28: Do you, or does anyone in your household, pay to subscribe to any of the following? Select

all that apply. Q36.3: How many paid video on demand/streaming services do you think you are willing to buy

beyond any you already pay for? (Based on online video viewers N=1739)

11 Access to Unique Content Drives SVOD Subscriptions

10%

17%

22%

24%

33%

43%

50%

0% 10% 20% 30% 40% 50% 60%

An existing service I use no longer offers somecontent I want

Signing up gives me access to other relatedservices

Replacing TV services I no longer get because I cutthe paid TV service cord

Offered free trial of service

Specific kinds of content (anime, sports, nature,etc.) that I want to watch

Original series made by the service is must-see TV

Specific individual movies/TV/video series that Iwant to watch


Being Able to Watch Specific Movies, Shows or Originals Is a Key Reasons to Subscribe

SVOD subscribers, N=1,490. Q28A: For what reasons did you sign up for subscription VOD services such as Netflix,

Hulu, HBO Now, etc.?

12 Half the SVOD Watched Is Viewed on an Internet-Connected TV

Percentage of SVOD Video Watched on Each Platform

Computer Smartphone Tablet TV connected to Internet


19%

53% 17%

11% 18–34: 24%

Younger Males Lean Toward Watching on Alternative Devices

SVOD subscribers, N=1,490. Q28D: In a typical week what percentage of the video you watch from your

subscription VOD video services is viewed online on a computer, smartphone, tablet or a TV connected to the

Internet?

13 Online Video Watching Is Spread Across Platforms

Percentage of Online Video Watched on Each Platform

Computer Smartphone Tablet TV connected to Internet


28% 36%

23% 13%

Online video viewers, N=1,739. Q35B: On average, in a typical week, what percentage of online video do you

watch on computer/laptop, tablet, smartphone, or TV connected to the Internet?

14

Cord Cutting and Slimming


15

Large Channel Bundles Are Preferred Just Slightly Over Skinny Bundles

Preferred Mode of Paying for TV Service

A prepackaged large bundle of channels where you can view TV, movies, video across many devices

A skinny bundle where you pick the various channels and networks you want to see

No preference

I do not pay for TV subscription VOD services


35%

22%

26%

17%

Streaming and Pay TV Users, N=1,596. Q30: How do you prefer to pay for TV video services?

16 Cord Cutting Likely to Continue, Especially Among Younger Adults

11% 10%

14% 14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Extremely likely (5) Somewhat likely (4)

Those Extremely Likely or Somewhat Likely to Cancel Their Pay TV Service Subscription in Next 12 Months

Total 18-34


Pay TV subscribers N=1,476. Q10.4: How likely are you to cancel your pay TV service in the next 12 months?

This is not referring to subscription services like Netflix or Hulu, and solely refers to the television service provided

to you by your cable, satellite, or telco company.

17

Cord Cutters Are More Likely to Use SVOD Than Switch to Another Provider

44%

25%

16% 14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Use other subscriptionVOD services, such as

Netflix or Hulu

Switch to anotherprovider of pay TV

service

Go without pay TVservice

Switch to a skinnybundle service

Most Likely Behavior After Canceling Pay TV Service


Pay TV subscribers who may cut the cord in the next year, N=625. Q10.5: If you cancel your current pay TV

service in the next 12 months, which of the following are you most likely to do?

18 In Addition to Cost, OTT Remains Clear Driver of Cord Cutting

16%

20%

21%

23%

24%

30%

47%

0 10 20 30 40 50 60

I can watch the TV shows and movies I like onDVD

I am satisfied with what I can receive over theair without paid TV service

I can watch the TV shows and movies I like onthe Internet

I have enough entertainment options on theInternet

I am satisfied with online streaming options onmy TV from services like Netflix or Hulu

I don't watch enough TV to make it worth it

It's too expensive

Reasons for Canceling and Going Without Pay TV Service

Combined

OTT

Reasons:

68%


Likely Cord Cutters Who Would Go Without Pay TV Exclusively

N=101. Q10.6: For which of the following reasons will you go without pay TV service?

19 35% of Consumers Are Interested in Subscribing to a Skinny Bundle

17% 19% 24%

18% 21%

25%

0%

10%

20%

30%

40%

50%

60%

Total 18–34 35–44

Those Rating Their Interest 4 or 5 on a 5-Point Scale

Very Interested (5) Interested (4)


Adults 35–44 Have Highest Interest; Possible Response to Cord Cutting

Those without a skinny bundle. Total N=1,915. Q12.1: How interested are you in subscribing to a skinny bundle? In a

skinny bundle you choose a cable/satellite package with a smaller number of channels at a lower price than a typical

cable bundle.

20

Livestreaming Video


21

Over Half of Online Users 18+ Watch Livestreaming Video Every Week—Two-Thirds of Those 18–34

31% 15%

12%

10%

6%

7%

8%

11%

17%

24%

12% 15%

14% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total 18–34

Frequency of Watching Livestreaming Video on Any Platform

Never Less than once a month Once a month or more Several times a week

Once a week Once a day Several times a day


26% At least

once a

day

51% At least

once a

week

33% At least

once a

day

68% At least

once a

week

Total N=2,007. Q40.1: How frequently do you watch LIVE streaming video? This is watching Internet video that is

being produced live to watch on a computer, smartphone, tablet, or TV connected to the Internet, and can be

about anything from competitive video game playing to a how-to makeup video.

22 Livestreaming Works for a Wide Variety of Content

26%

26%

29%

31%

35%

37%

39%

0% 10% 20% 30% 40% 50% 60%

Videos by Internet personalities

Video game competitions (e.g., esports)

How-to videos

Videos by friends or family

Sports games/matches

Comedy

Breaking news

Top 7—Watched by More Than One-Quarter


Monthly livestreaming viewers. N=1,147. Q40.5: What types of LIVE streaming videos do you currently watch?

Again, we’re talking about the types of Internet video you watch that are being produced live to watch on a

computer, smartphone, tablet, or TV connected to the Internet, and can be about anything from competitive video

game playing to a how-to makeup video.

23 Livestreaming Works for a Wide Variety of Content

11%

13%

21%

21%

22%

24%

0% 10% 20% 30% 40% 50% 60%

Religious content/events

Conferences/speakers

National newscasts

Concerts/festivals

Videos by celebrities

Local newscasts

Bottom 7—Watched by Less Than One-Quarter






24

Livestreams Help Users To Feel More Connected to Stories, Events and Other People

20%

24%

27%

27%

30%

31%

32%

37%

0% 10% 20% 30% 40%

To interact with the host

To interact with other viewers while watching live video

Access to exclusive video I can't get elsewhere

Entertaining hosts

Makes me feel like a part of an event

Makes me feel more connected (to friends/ family, anorganization, brand, etc)

Feels authentic

Makes me feel updated and informed

Reasons to Watch Livestreaming Video


Livestreaming Feels Authentic





25 Facebook Live, YouTube Live, Instagram Compete for Dominance

4%

4%

5%

10%

10%

21%

22%

22%

37%

37%

39%

0% 10% 20% 30% 40% 50% 60%

Mixer

Ustream

Live.ly

Livestream

YouNow

Snapchat

Twitch

Twitter

Instagram

YouTube Live

Facebook Live

Platform Used to Watch Livestreaming Video


Monthly livestreaming viewers. N=1,147. Q40.3: Which of the following do you ever use to watch LIVE streaming

video? This is any service that you use to view video content that is being produced live to watch on a computer,

smartphone, tablet, or TV connected to the Internet.

26

Esports


27 Majority of Adults Are Aware of Esports

Heard of Esports

Yes No Not sure

12% of those

unaware of

esports are

interested

in learning more

about it in

next 6 months

18–34: 26%

are interested in

learning more


59% 36%

5%

N=2,007. Q123: Have you ever heard of esports? Esports, also known as competitive gaming, is where top-tier

players compete in video games such as League of Legends, DOTA, Overwatch, Hearthstone, and Counter-

Strike: Global Offensive (CS: GO) for trophies and prize money. Q123A: How interested are you in learning more

about esports in the next 6 months? (Those unaware, N=814)

28 Nearly Half of Those Aware of Esports Watch Them Remotely

72%

53%

5%

9%

2%

5%

7%

11%

6% 10%

8% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

In-person esports game attendance Remote esports viewing

Frequency of Watching Esports In Person or Remotely

Never Several times a year Once a monthA few times a month Once a week Several times a week


37% Attend Esports Events in Person at Least Once a Year

Aware of esports N=1,193. Q123.2: How often do you attend esports games in person? Q123.2A: How often do

you watch esports games remotely, not attending in person?

29

The Future Looks Bright for Esports—Viewing Is Growing Among Current Viewers


14%

43%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Esports Viewers

Future Esports Viewing

I anticipate spending more time watching esports innext 6 months

No change

12%

42%

46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Esports Viewers

Current Esports Viewing

I watch esports more than I did 6 months ago

No change

Esports Viewers N=568. Q123.2B: How has the amount of time you spend watching esports (whether in person or

remotely) changed over the past 6 months? Q123.2C: How do you think the amount of time you spend watching

esports over the next 6 months will change?

30

Nearly Half of Esports Viewers Prefer Ad-Supported Models to Watch Live or On Demand for Free


Esports Viewers N=568. Q123.6F1: By which of the following payment models would you prefer most to watch

any type of esports content?

48%

28%

18%

6%

Preferred Payment Model for Esports

Esports content watched live and on demand with ads for free (like on YouTube, Twitch, network TV)

Esports content watched live and on demand for a subscription fee, but with no ads (this would include access to exclusive digitalgoods and content)

Esports content that I make a one-time purchase for and download or stream over the internet (like pay-per-view, or single eventtickets for online viewing)

None of the above

31

Virtual Reality


32 Familiarity With And Interest in Virtual Reality Are Modest

16% 26%

12%

12%

28%

22%

21% 18%

23% 22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Familiarity Interest

Familiarity and Interest in Virtual Reality on a 5-Point Scale

Not at all 2 3 4 Very


44% are

familiar

with VR

40% are

interested

in VR

Total N=2,007. Q151: How familiar are you with the concept of virtual reality (VR)? Q152: How interested are you

in virtual reality?

33 Traditional Media, Travel and Core Gaming Leading VR Use Cases

22%

23%

24%

26%

27%

28%

30%

30%

39%

39%

46%

0% 10% 20% 30% 40% 50% 60%

Video calls

Vehicular/adventure simulations

Food and cooking

Smartphone/tablet games

Live events

Music videos

TV shows

Sports

Console/PC games

Virtual travel

Movies

Interest in Virtual Reality Content—Top 11


Those at 4 and very interested in VR. Total N=1,240. Q152.5: What kind of content would you be interested in

experiencing through virtual reality?

34 Secondary VR Use Cases

10%

14%

14%

16%

17%

18%

19%

19%

20%

20%

0% 10% 20% 30% 40% 50% 60%

Event Replays

News

Short-form video clips

Esports

Extreme sports

Board games

Art

Live/recorded video games

Social networking

Training for jobs and other activities

Interest in Virtual Reality Content—Bottom 10


Those at 4 and very interested in VR. Total N=1,015. Q152.5: What kind of content would you be interested in

experiencing through virtual reality?

35 Thank You


Ned Sherman Partner and Director,

Manatt Digital

Mike Vorhaus CEO, Vorhaus Advisors

Dr. Jodi Gusek JAG Research + Strategy

Documents

Manatt-Vorhaus Digital Strategy Study · Netflix Amazon Prime Video Hulu HBO Now YouTube Red CBS All Access Showtime Starz PlayStation Vue fubuTV Filmstruck 1.6 = average number of