Auckland Bangkok
L.E.K. Media Consumption Survey (2009)
Beijing Boston Chicago London Los Angeles Melbourne Milan Mumbai Munich New York Paris San Francisco Shanghai Singapore Sydney
Opportunities Uncovered & Myths Debunked
January 2010
iKbKhK=`çåëìäíáåÖ=ääÅI=NNMM=däÉåÇçå=^îÉåìÉI=ONëí=cäççêI=içë=^åÖÉäÉëI=`^=VMMOQI=rp^ íW=PNMKOMVKVUMM===ÑW=PNMKOMVKVNOR===ïïïKibhKÅçã
Tokyo Wroclaw
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed Winners and Losers
2
Background
L.E.K.’s research covers a breadth of media platforms and behavioral responses
L.E.K. conducted an online survey of 2,000+ households to measure changes in media consumption and the underlying motivations behind those changes
-
Consumers’ current media “diet” across 28 media types (e.g. the Internet, cable TV, etc.) Directional changes in behavior compared to that of a year ago, and reasons for change Current lifestyle habits and media enablement, including new media usage (1)
Our survey targeted several top-of-mind questions from L.E.K.’s media and entertainment clients: How do media consumption habits change as new media technologies emerge? Where are the real opportunities in new media? How has the recession affected media consumption, and what’s secular vs. cyclical? Are traditional consumer segmentation approaches still relevant in understanding today’s environment?
Survey responses measure:
Note:
Directional change in consumption (compared to that of a year ago) across media platforms Average time spent on the Internet, watching TV, listening to music and radio, playing games, and reading newspapers, books and magazines Average monthly buy rate for movies across all windows
(1)
New media hours includes time spent: watching movies via EST, streaming, playing mobile, online casual and MMO games, and listening to satellite and Internet radio
3
Opportunities to Consider
Six Opportunities to Consider
$ 1. You can get paid for online video content, but you have to go through the cable bill
-
Up to 38% of consumers reported they would definitely or probably pay a fee on top of their cable bill to get access to their cable content online and on their mobile phone
4
Opportunities to Consider
Respondents cited they are willing to pay $19 to $28 for only video through cable provider, with 38% claiming to be probable buyers at the bargain price of $19 per month
Willingness to Pay for OTT Service (1)
Too Expensive, Would Never Use Interest in Subscribing At “Mildly Expensive” Price (2) % of Respondents 100 80 60 Mildly Expensive, but Interested
$28
$41
19% 28% 36%
11% Definitely Would Not Probably Would Not Might or Might Not Probably Would Definitely Would
40 20 0
Bargain / Good Value
$19
Interest in Subscribing At “Bargain” Price (2) % of Respondents 100
10%
Too Cheap, Doubt Quality of Service
$12
80 60 40 20 0
17% 35% 23% 15%
0
5
10 15 20 25 30 35 40 45
Average Dollars Paid in Addition to Current Cable/Satellite Bill
Note: Source:
(1) “At
what price would this service be [too expensive / mildly expensive / a bargain / too cheap]?” (n = 2,008); (2) “What would your interest be in this service at [this price]?” (n = 2,008) L.E.K. Media Consumption Survey (December 2009)
5
Opportunities to Consider
Six Opportunities to Consider
$ 1. You can get paid for online video content, but you have to go through the cable bill
-
Up to 38% of consumers reported they would definitely or probably pay a fee on top of their cable bill to get access to their cable content online and on their mobile phone
2. Internet radio is finally becoming relevant
-
32% of respondents had used Internet radio services, logging 5.8 hrs per week per user
6
Opportunities to Consider
32% of respondents use Internet radio services on a weekly basis and spend just as much time on Internet radio as active users of satellite radio
% of Respondents who are Active Radio Listeners (1)
% of Respondents
100 90 80 70 60 50 40 30 20 10 0
83%
32% 21% Traditional Radio 8.1 Satellite Radio 5.7 Internet Radio 5.8 Average # of Hours per Week per Active Listener (1)
Note: Source:
much of the following do you watch / consume in a typical week?” (n = 2,008); “Active” listeners indicated at least some consumption of the respective radio type per week L.E.K. Media Consumption Survey (December 2009)
7
(1) “How
Opportunities to Consider
Six Opportunities to Consider
$ 1. You can get paid for online video content, but you have to go through the cable bill
-
Up to 38% of consumers reported they would definitely or probably pay a fee on top of their cable bill to get access to their cable content online and on their mobile phone
2. Internet radio is finally becoming relevant
-
32% of respondents had used Internet radio services, logging 5.8 hrs per week per user
3. E-readers are driving readership and becoming a growth driver for the mature book and magazine market
-
Of the 10% of consumers who own e-readers, 48% reported reading more books versus just 7% who decreased their book reading (44% vs. 9% for magazines) 36% percent of the books read by people with e-readers are incremental consumption 40% of respondents indicated that affordability of books on e-readers was driving their increased consumption, and 47% indicated that more interesting books were being released (likely due to better discovery on e-readers)
8
Opportunities to Consider
E-readers appear to drive incremental reading, as ~36% of books read on ereaders would not have been read otherwise (i.e., as a print book)
“Do you own an e-reader?”
% of Respondents (n=2,008) 100 90 80 70 60
90%
Incremental Book Readership from e-reader (1)
# books read on e-reader (n = 199) 100 90 80 70 60
36%
Would Not Have Read as Print Book
No 50 40 30 20 10 64% Would Have Read as Print Book
50 40 30 20 10 10% 0 2009 Yes
0 2009
Note: Source:
the books you read on your e-reader, how many would you have ordinarily read as a print book if you didn’t have an ereader?” (n = 199) L.E.K. Media Consumption Survey (December 2009)
9
(1) “Of
Opportunities to Consider
E-readers appear to significantly increase print media consumption across all major print segments
Change in Print (Newspaper) Consumption (1)
% of Respondents
60 50 40 30 20 10 0 -10 -20
Non EReaders Active Active Readers, Readers, ENon EReaders Readers
Change in Print (Book) Consumption (1)
% of Respondents
50 40
Change in Print (Magazine) Consumption (1)
% of Respondents
40 30
30
59%
20 10
48%
20 10
44% 23% 15% -9%
7% -16%
11% -12% -10%
10%
0 -10 -20
Non EReaders
15%
0
-15%
-14%
-7%
-10 -20
-19%
-17%
Active Active Readers, Readers, ENon EReaders Readers Less More Net variance
Non EReaders
Active Active Readers, Readers, ENon EReaders Readers
Note: Source:
does your [current consumption] compare to that of a year ago?” (n = 2,008) L.E.K. Media Consumption Survey (December 2009)
10
(1) “How
Opportunities to Consider
Lower costs and better content (or discovery of content) were cited as the primary reasons active e-readers are spending more time reading
Reasons for Spending More Time Reading Print Media (1)
% of Active Readers(2) Owning ereaders Response Options More affordable to me I get better information here than through other alternatives More books being released that I am interested in I prefer getting information here rather than through alternative methods More free time in general I am spending less time consuming other forms of media, giving me more free time to read Other Newspaper 43% 30% N/A Magazine 41% 47% N/A Book 36% N/A 47%
Active e-readers claim affordability / value as the primary reason to increase time reading 47% of e-readers state that there are more interesting books being released
10% 10% 4% 3%
6% 4% 2% 0%
6% 5% 2% 4%
-
This is likely attributed to better discovery via ereader devices
Note: Source:
“What would you say is the primary reason that you are spending less time reading [the newspaper / magazines / books]?” (n = 105, 83, 83 respectively); (2) “Active readers” refers to those reading >0 hours / month of each respective media type L.E.K. Media Consumption Survey (December 2009), L.E.K. Analysis
11
(1)
Opportunities to Consider
Six Opportunities to Consider (Continued)
4. “The iPod Nation” consumer segment is good, but the “e-reader Republic” is even better in terms of being a great target for new media services
$
iPod owners consume ~14% more new media (8.9 hours vs. 7.8 hours per week) than the general population; e-reader owners, on the other hand, consume a whopping 18.2 hours of new media in comparison
12
Opportunities to Consider
iPod Nation and Facebook Fanatics are generally high consumers of new media, but the e-reader group is in a class by itself
New Media Consumption by Technology-based Consumer Segments (1))
New Media Hours per Week Media Type Movies iPod Nation 1.5 Facebook Fanatics 1.6 e-reader Republic 2.8 Overall Population 1.2
= Significantly higher consumption levels = Ave. consumption levels
Games
3.7
4.7
9.3
3.5
Radio
3.7
3.9
6.1
3.1
Total
8.9
10.2
18.2
7.8
Note:
(1)
Source:
New media hours includes time spent: watching EST / streaming movies, playing mobile, online casual and MMO games, and listening to satellite and Internet radio; iPod Nation are respondents for whom the iPod is their primary portable music device; Facebook Fanatics are those that self-report to update their social networking pages daily; e-reader Republic are respondents who own an e-reader device L.E.K. Media Consumption Study (December 2009)
13
Opportunities to Consider
People owning e-readers were 4 times more likely to report increases in their usage of new media in 2009
Increase in New Media Consumption (1,2)
% of Respondents
50 45 40 35 30 25 20 15 10
44%
16%
5 0
19% 11%
iPod Nation
Facebook Fanatics
E-Reader Republic
Overall
Note:
(1) “How (2)
Source:
does your [current consumption] compare to that of a year ago?” (n = 2,008); New media hours includes time spent: watching movies via EST, streaming, playing mobile, online casual and MMO games, and listening to satellite and Internet radio; data shown is the average increase across these categories L.E.K. Media Consumption Study (December 2009)
14
Opportunities to Consider
Six Opportunities to Consider (Continued)
4. “The iPod Nation” consumer segment is good, but the “e-reader Republic” is even better in terms of being a great target for new media services
$
iPod owners consume ~14% more new media (8.9 hours vs. 7.8 hours per week) than the general population; e-reader owners, on the other hand, consume a whopping 18.2 hours of new media in comparison
5. Don’t forget about new media for people over age 50, a potential new growth area
-
Average reported time spent online increases with age, although activities differ (while 25-39 year olds report 6.8 hours/week, the 50-64 year old age group reports 8.3 hours/week)
15
Opportunities to Consider
Average reported time spent online increases with age, although activities differ (social networking for younger demos; emailing, games and getting info for older demos)
Average hours spent online per week for specific activity by age cohort (1)
% of hours online 100 90 80 70 60 50 40 30 20 10 0 18-24 7.9 25-29 6.8 30-39 6.9 40-49 8.0 50-64 8.3 Total 7.7 Average # Hours Online / Week (2) 14 19 20 25 32
7 7
7
24
8 10
26
8 8
22
8 8
20
8 9
24
8 8
Other (3) Doing Online Tasks Shopping Getting Info Playing Online Games Social Networking E-mailing
13 8
19
12 10
16
13 12
14
12 13
7
11 11
14
10
23
29
23
Note:
(1) “You (2)
Source:
said on average you spend [number of hours] online in a typical week. How many are spent on the following?” (n = 1,949) Reported Internet usage time per week adjusted in a ratio of average time spent as measured by 3rd party sources to reported Internet usage time within survey, given that survey was sampled from online panels (3) Other includes responses such as “watching TV online,” “watching movies online,” “online dating sites,” etc. L.E.K. Media Consumption Survey, L.E.K. Analysis
16
Opportunities to Consider
Six Opportunities to Consider (Continued)
4. “The iPod Nation” consumer segment is good, but the “e-reader Republic” is even better in terms of being a great target for new media services
$
iPod owners consume ~14% more new media (8.9 hours vs. 7.8 hours per week) than the general population; e-reader owners, on the other hand, consume a whopping 18.2 hours of new media in comparison
5. Don’t forget about new media for people over age 50, a potential new growth area
-
Average reported time spent online increases with age, although activities differ (while 25-39 year olds report 6.8 hours/week, the 50-64 year old age group reports 8.3 hours/week)
6. Consumers are rampantly multi-tasking while online, specifically with TV watching and/or listening to music – advertisers should note and take advantage
-
33% of the time during which consumers are online at home are simultaneously spent watching TV 19% of their online time is spent listening to music at the same time
17
Opportunities to Consider
Online users are rampant media multi-taskers
Multi-Tasking On Other Media Types While Online at Home (1)
% of Hours Online from Home
35 30 25 20 15 10 5 0
Most revenue-generating Internet content relies on advertisements and/or user engagement However, respondents indicated that for roughly one-third of the time they spend online, their attention is split with the TV
33%
19% 11%
~11% of their online time is spent talking on the phone ~19% of their online time is spent also listening to music
-
Watching TV
Listening to Music
Talking on the Phone
Note: Source:
(1) “What
percentage of the time you spend online at home in a typical week is also spent doing something else?” (n=1,987) L.E.K. Media Consumption Study (December 2009)
18
Opportunities to Consider
As expected, younger people are generally better multi-taskers than their older counterparts, although all demos multi-task with TV at high levels
Multi-Tasking on Other Media Types While Online at Home, by Age(1)
% of Respondents
60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 18-24
Watching TV
Listening to Music Talking on the Phone
25-29
30-39
40-49
50-64
Age Range
Note: Source: percentage of the time you spend online at home in a typical week is also spent doing something else?” (n=1,987) L.E.K. Survey and Analysis
19
(1) “What
Myths Exploded
Three Media Myths Exploded
1. Myth – TV is “old media” that will get its clock cleaned by Internet cannibalization
-
TV still rules and remains the largest media form by far in terms of time spent by consumers (~38 reported hours per week vs. 7.6 hours for the Internet ) DVRs are powering growth in TV, with a reported 39% of TV viewing time-shifted and 23% of DVR owners indicating they are viewing more cable TV, vs. 10% less However, local TV programming is not faring as well, and may get caught in the downward spiral that newspapers are experiencing (Local TV was only TV category with reported viewing decline) Online TV is still very small, accounting for only ~1% of total TV hours viewed
2. Myth – This year’s rosy box office numbers means that everything is “just fine” for the movie theater business (~3% increase in admissions) It seems that the box office is up this year because casual movie goers surged Active movie goers (those that see over 1 movie per month) are self-reporting a 10% drop in the number of movies they watch in a theater, with 56% (of those going to fewer movies) indicating that the cost is too expensive The “success” is modest and fragile
3. Myth – DVD softness is just a recession thing DVDs may not “snap back” after the recession, with 80% of consumers indicating they would not return to “pre-recession” DVD purchase levels 34% of consumers indicated they feel DVDs are too expensive, and 27% indicated renting is more convenient and/or a better value than buying Studios need new pricing models and windowing strategies 20
Wisdoms Confirmed
Four Wisdoms Confirmed
1. Newspapers are going nowhere fast
-
Physical newspapers are lacking relevance as consumers can access the same content more conveniently from online sources (16% of consumers decreased newspaper reading vs. only 12% increased)
2. Flat-priced “all-you-can-eat” media work better in recessions than transactionbased media
-
Consumers do not cut back on key subscription services, even when times are tough A net 6% of consumers increased viewing of cable TV, and 27% increased their online activities (both require subscriptions)
3. “Life requires a soundtrack” Music is #2 to TV and ahead of Internet in terms of the amount of time spent on a medium 52% of music is consumed via radio
4. Internet usage continues to eat into other media categories, as well as personal time Increases in online usage pressure other media categories given a limited amount of available “free time” for entertainment 57% of consumers with more free time stated they would increase Internet time; the next most popular media to which consumers would devote additional free time was network and cable TV, at 38%
21
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed Winners and Losers
22
Winners and Losers
No one can claim to know with certainty, but major trends currently in place NOW and likely to remain in place over the next five years include:
1. 2. 3. 4. 5. 6. 7. 8. 9.
HDTV On Demand Preference for Free (Ad-supported or Pirated) Content Ad Dollar Shift from TV to Internet and other New Media Advertiser Move to Targetability Consumer Inertia Fragmentation of Audiences Growth of UGC / “Pro-sumer” Content New Media Features Increasingly Understood and Accepted
10. Customer Dislike of Walled Garden 11. Choice Proliferation
23
Winners and Losers
How will these trends affect industry participants?
L.E.K. looked at key industry participants
- Media Delivery Platforms - Traditional Content Aggregators - Internet-based Content Sites - Professional Content Creators
L.E.K. assessed
- The degree to which each of the 11 trends positively or negatively
affected each key industry participant
- The overall combined effect
24
Winners and Losers
Type of Industry Participant:
Broadcast TV Cable MSO* Satellite Media Platforms IPTV ISP* Mobile Traditional Big 4 Networks Aggregators Affiliate Stations Basic Cable Networks Pay Cable Networks Network/Cable Website Internet Sites Web Aggregator/Destination site3 Piracy Sites Profes. Content Creators Consumers
+ ++ ++ -+ +
- - ++ ++ - ++ ++ ++ + + - + ++ ++ ++ ++ ++ ++ + -++ ++
----+ + -
-+ -++ + + +
+ ++ ++ - + ++ ++ - ++ + ++ + + -+ +
Note: 1Ratings and dollars-per-hour of delivered content continue to decline; 2Acceptance occurs both because consumers get more comfortable with new tech., and because providers make their products easier to understand/use; 3E.g. Google, etc.; 4Choice Proliferation both in *Cable MSOs and ISPs frequently combined platforms & access point
25
Ad olla or F ve rs S ree rti (A se hift C on r M fro d-su su ov m T ppo m V Fr e er rt e To to ag In In d or er m en tia Tar tern pi G r ge e ro ta t & ate w tio ta d) th bi n C lity Oth of of N on er ew U Au te N M GC di ew nt ed C en M us i a / “P ce ed Fe to ro s1 ia at C me ur -su ho rD es m ic er I TO e P isli k e nc r e ” C TA ro as on life of L ra Wa ingl tent y tio U n 4 lled nd er G ar s de too d n &
d
an
em
D TV
nD
er e
Pr
ef
Ad
H
O
D
nc
e
f
+ + + +
+ + + -
- + + - + + + + + + - - - ++ ++ ++ ++ ++ -- + + +
-- - - + + + + + + + +
+ + + +
-7 1 -5 5 7 2 -1 -7 -3 -3 8 14 12 0 11
Net effect of Multiple Trends on Industry Participants
Ac
ce pt
Among media platforms, broadcast TV and Satellite face strong headwinds, whereas IPTV and ISPs* are poised to benefit
ed
2
Winners and Losers
Based on these trends, there will be relative winners and losers
Potential Winners
MSOs (esp. those with broadband ISPs) IPTV providers Web aggregators Cable networks (with strong franchises) Low-cost rentailers (Netflix, Red Box) Out-of-home media companies Video game developer / publishers Differentiated content creators
Could Go Either Way
Radio stations Concert promoters Sports leagues / teams Premium pay cable networks Broadcast networks Book publishing Movie Theaters
Potential Losers
TV stations / groups Newspapers Most general-interest magazines High-cost rentailers (Blockbuster) Studios Satellite radio
Branded Cost-efficient Multiplatform
Subscription Models
26
Winners and Losers
Future scenarios – we would not be surprised if any of the following happened over the next five-plus years
1. Internet ad growth accelerates out of current recession as “tipping point” is reached with decline in traditional media 2. TV service provider will develop premium Internet options that unlock value in online video 3. Broadcast networks go cable only and adopt cable-like pricing (we had this one last year) 4. Book sales will rise 5. Companies that best serve iPhone nation and e-reader republic prosper (think kid-oriented game companies) 6. Consolidation happens among the major studios (6 to 4 or 3?) 7. Valuations of Internet radio companies rise again 8. Distribution (cable / IPTV) again makes a play to buy a major studio (we had this one last year as well!) 9. Media targeted at older demographics does surprisingly well 10. Major metro newspapers and national magazines go online only 11. Plus more we can’t foresee…
27
Appendix
28
Myths Exploded
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded 1. TV is an “old media” quickly losing relevance 2. Film box office numbers imply a healthy theatrical industry 3. DVD softness is just a recession thing Big Wisdoms Confirmed Winners and Losers
29
Overall Media Consumption Trends
Consumers report spending 37.6 hours watching TV, dwarfing all other media categories (online usage still only 7.6 hours per week)
Average Consumption by Major Media Type (2009 vs. 2008)
Mean Hours per Week Consumed (1, 2) YoY 2008-09 Change (%) 4.4% (0.5%) 6.5% 8.8% 5.3% (0.3%)
Media Type Internet TV Radio Movies Games Print
Note:
(1)
2008 7.3 37.8 9.2 2.7 7.1 7.1
2009 7.6 37.6 9.8 2.9 7.5 7.1
Source:
Reported Internet usage time per week adjusted in a ratio of average time spent as measured by 3rd party sources to reported Internet usage time within survey, given that survey was sampled from online panels. Reported TV usage time per week adjusted to mean time as measured by Nielsen in Q3 2008 (2) Numbers shown are rounded to the nearest decimal point L.E.K. Media Consumption Survey (n = 2,008), Nielsen, L.E.K. Analysis
30
Myths Exploded
Cable TV is showing strong growth in terms of both average hours viewed and the percentage of the population increasing viewing; online TV viewing is still small, but ~38% of consumers report some online viewing
Time Spent Watching TV (1)
# of Hours Spent per Week
40 35 30 25 20 15 10 5 0 7
YoY Change in Hours N/A
Net % of all Respondents Increasing / (Decreasing) Consumption +4.2%
% of all Respondents who are Active Users 38%
38
Online TV(2)
14
Cable
8.3%
+6.2%
82%
Local Broadcast
(3.4%)
(0.3%)
81%
17
Network Broadcast
(5.3%)
+4.1%
95%
2009
Note: Source:
much of the following do you watch / consume in a typical week?” (n = 2,008); (2) Reported online TV time per week was adjusted using the ratio of average time spent online as measured by 3rd party sources to reported time within survey L.E.K. Media Consumption Survey (December 2009)
31
(1) “How
Myths Exploded
In contrast to local TV programming, consumers are spending more time watching cable and network TV mainly due better programming and DVRs
Reasons for Watching MORE Cable / Network Programming (1) (2) Response Options I found more programs on cable / network television that I want to see I have a DVR / PVR and am able to record more TV that I want to see I have more free time in general to spend on media activities I am spending less time consuming other forms of media Other (please specify) % Cable 55% 23% 12% 5% % Network 52% 24% 13% 6%
5%
5%
Note: Source:
(1) “What
would you say is the primary reason that you are watching more cable TV?” (n = 383); (2) “What would you say is the primary reason that you are spending more time watching network broadcast TV?” (n = 384) L.E.K. Media Consumption Survey, L.E.K. Analysis
32
Myths Exploded
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded 1. TV is an “old media” quickly losing relevance 2. Film box office numbers imply a healthy theatrical industry 3. DVD softness is just a recession thing Big Wisdoms Confirmed Winners and Losers
33
Myths Exploded
While more people went to the movies in 2009, the average active movie goer attended fewer movies per month
% of Respondents who are Active Movie Goers (1)
# of Movies Watched in Theaters
60 55 50 45 40 35 30 25 20 15 10 5 0 0.0 0.5 1.5 2.0 2.5
Movies Watched in Theaters per Active Theater Goer (2)
# of Movies Watched in Theaters
3.0
-10%
51% 41%
1.0
2.0
1.8
2008
2009
2008
2009
Note:
Active theater goers are respondents who watch more than 1 movie a month in theaters does your [current consumption] compare to that of a year ago?” (n = 2,008) Source: L.E.K. Media Consumption Survey (December 2009)
(2) “How
(1)
34
Myths Exploded
For those consumers cutting back on theater-going, the predominate main reason appears to be cost / price sensitivity
Reasons for Watching FEWER Movies in Theater (1) % of Respondents watching FEWER movies in the theater I feel that the cost is too expensive I am too busy / I have less free time overall I am not as interested in the content being released I feel quality of my experience at home is comparable to that of the theater I am spending more time consuming other forms of media Other
56% 18% 12% 5% 2% 7%
0 5 10 15 20 25 30 35 40 45 50 55 60
Note: (1) “What would you say is the primary reason that you are watching fewer movies in the theater? (n = 563) Source: L.E.K. Media Consumption Survey, L.E.K. Analysis
35
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded 1. TV is an “old media” quickly losing relevance 2. Film box office numbers imply a healthy theatrical industry 3. DVD softness is just a recession thing Big Wisdoms Confirmed Winners and Losers
36
Myths Exploded
Only ~20% of respondents cited they would buy DVDs at pre-recession rates given a better economy; the majority do not plan to return to pre-recession buy rates even with a restored economy and personal finances
Change in Movie (DVD Buying) Consumption (1)
% of Respondents (n=2,008) 100 90 80 70 60 50 40 30 20 10 0 9% 2009
Note:
(1) “How (2)
Likelihood to Buy DVDs In Better Economy (2)
% of Respondents Citing Less DVD Buying (n=581) 100 90 80 70 25% 20%
2% 9%
More – didn’t consume much/any last year, but did this year More
Yes, would buy more today, at pre-recession rate Yes, would buy more today, at lower rate than pre-recession
61%
About the same
60 50 40 30
Less
20%
55%
No, would not buy more today
Less – consumed last year but stopped this year
20 10 0 2009
Source:
does your [current consumption] compare to that of a year ago?” (n = 2,008); “If current economic conditions were to improve and supposing you were in the same financial situation that you were in prior to the recession, would you then buy more DVDs than you are today?” L.E.K. Media Consumption Survey (December 2009)
37
Myths Exploded
Although 34% of respondents cite cost as the main reason to cut back on DVD buying, 27% indicate substitution for rentals due to convenience
Reasons for Buying FEWER DVDs (1) % of Respondents buying FEWER DVDs I feel that the cost is too expensive I feel the benefit of buying vs. renting isn’t worth the extra cost It is more convenient for me to rent movies on DVD than it is to buy and watch them I am not as interested in the content being released I am too busy / I have less free time overall I am spending more time consuming other forms of media Other
34% 15% 12% 11% 10% 5% 13% 0 5 10 15 20 25 30 35
Note: Source:
(1) “What
would you say is the primary reason that you are buying fewer DVDs?” (n = 581) L.E.K. Media Consumption Survey, L.E.K. Analysis
38
Wisdoms Confirmed
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Common Wisdoms Confirmed 1. Newspapers are going nowhere fast 2. Subscriptions work in recessions 3. Life requires a soundtrack 4. Internet crowding out other media in personal time budget Winners and Losers
39
Wisdoms Confirmed
Newspapers are hardest hurt by new media; declines in magazine and book consumption are primarily attributed to having less free time
Reasons for Spending Less Time Reading Print Media (1)
Response Options I get the [content I want] through alternative methods (e.g. Internet, etc.) I am too busy I feel that the cost is too high I get better information from other alternatives (e.g. cable news networks) I am spending more time consuming other forms of media Other % Newspaper 31% % Magazine 16% % Book Consumers appear to be shifting from newspapers due to other accessible and affordable news outlets
N/A
-
21%
33%
51%
Although only ~16% of consumers cited alternative means as a reason to read fewer magazines, this pool has grown from ~9% in 2008
18%
27%
10%
Time pressures add to consumer shift from print media across all three categories
12% 10% N/A 6% 10% 18%
Use of Internet and blogs allows consumers to multitask as they get the news
12%
4%
21%
Books are seen more as leisure items than sources of information and experience a decrease in consumption among busy consumers
Note: Source:
“What would you say is the primary reason that you are spending less time reading [the newspaper / magazines / books]?” (n = 312, 296, 359 respectively) L.E.K. Media Consumption Survey (December 2009), L.E.K. Analysis
40
(1)
Wisdoms Confirmed
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed 1. Newspapers are going nowhere fast 2. Subscriptions work in recessions 3. Life requires a soundtrack 4. Internet crowding out other media in personal time budget Winners and Losers
41
Wisdoms Confirmed
In terms of the breadth of consumers increasing or decreasing different types of media, Internet and TV consumption appear to be more resilient in today’s weak economy compared to media with incremental fees per usage
Change in Consumption across Media Types (1)
% of Respondents
40 30 20 10 0 -10 -20 -30 -40
Internet Network TV Cable TV Theater DVD SellThrough Traditional Rental VOD Newspaper Book Magazine
Subscription-based / Free
Transaction-based
More Less
34% 19% -7% -15% 19% 11% 10% 8% 10% 12% -16% 18% 13% -15%
-13% -28% -29% -22% -32%
-18%
Online
Note: Source:
TV Categories
Movie Categories
Print Categories
does your [current consumption] compare to that of a year ago?” (n = 2,008); all more/less charts include “Less” as a % of Respondents as a negative number L.E.K. Media Consumption Survey (December 2009)
42
(1) “How
Wisdoms Confirmed
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed 1. Newspapers are going nowhere fast 2. Subscriptions work in recessions 3. Life requires a soundtrack 4. Internet crowding out other media in personal time budget Winners and Losers
43
Wisdoms Confirmed
Music is second to TV and ahead of Internet in terms of time spent, and 52% of music is consumed via radio (vs. 48% via recorded music)
Share of Overall Media Time (1)
% of Respondents (n=2,008) 100 90 80 70 60 50 40 30 20 10 0 2009
Note:
(1)
Share of Music Time (1)
% of Respondents (n=2,008) 100 90
23
4 9
9
Movies Print Games Internet Music - Recorded Music - Radio
4
Recorded - Live Recorded - Digital
80 70 60 50 40 30
21
9
11
Recorded - Physical
12
10 6
Radio - Internet Radio - Satellite
46
TV
20 10 0
36
Radio - Traditional
2009
Source:
Based on # of hours spent on each medium; (2) Reported Internet usage time per week adjusted in a ratio of average time spent as measured by 3rd party sources to reported time within survey. Reported TV usage time per week adjusted to mean time as measured by Nielsen in Q3 2009 L.E.K. Media Consumption Survey (December 2009), L.E.K. Analysis
44
Wisdoms Confirmed
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed 1. Newspapers are going nowhere fast 2. TV and radio are still bigger than the Internet 3. Subscriptions work in recessions 4. Life requires a soundtrack 5. Internet crowding out other media in personal time budget Winners and Losers
45
Wisdoms Confirmed
Internet usage as a percentage of free time entertainment still lags music and TV consumption, although much of that is multi-tasked
% Allocation of Hours in a Typical Week (1)
Percent 100 90 80 70 60 50
4 4 8 54 27
% Allocation of Free Time to Entertainment
Percent 100
4
9 9 9 10 12
Estimated
1
Music - Live Movies Print Games Internet (2) Music - Recorded Music - Radio
Free Time Commute
90 80 70 60 50
24
Work Grooming Eat
40 30 20 10 0
8
40 30
33
33
Sleep
20 10 0
46
TV(2)
Unemployed Population
Note:
(1) (2)
Employed Population
All survey respondents
Assumptions made on breakdown of time for Unemployed vs. Employed (question was not asked in survey) Reported Internet usage time per week adjusted in a ratio of average time spent as measured by 3rd party sources to reported time within survey. Reported TV usage time per week adjusted to mean time as measured by Nielsen in Q3 2009 Source: L.E.K. Media Consumption Survey (n = 2,008), L.E.K. Analysis
46
Wisdoms Confirmed
Internet appears to be the main media form people with more free time turn to ahead of TV, games and reading; film is less popular
Change in Consumption across Media Types for Those with More Free Time (1)
% of Respondents with More Free time for Entertainment (2)
60
Less
50 40 30 20 10 0 -10 -20 -30
Internet Network TV Cable TV Console Newspaper Games Books Magazines Theater VOD
More Net variance
57% 38% 38% 32% 33% 30%
27%
27%
23%
23%
25%
20%
-6%
-10%
-11%
-17%
-13%
-18%
-13% -25%
-21%
-21%
-24%
-29%
Subscrip- DVD Sell- Traditional tion Rental through Rental
Note: Source:
does your [current consumption] compare to that of a year ago?” (n = 537); (2) “How much more free time do you have available to spend on entertainment as compared to a year ago?” L.E.K. Media Consumption Survey (December 2009)
47
(1) “How
Wisdoms Confirmed
Agenda
Background and Executive Summary Opportunities to Consider Myths Exploded Big Wisdoms Confirmed Winners and Losers Survey Sample Detail
48
Survey Sample Detail
Demographics of respondents for L.E.K. Media Consumption Survey (1)
Respondents by Age
% of Respondents
25 21 20 16 15 10 5 0 0 13 22 23 19 19 18 15 17
L.E.K. Survey U.S. Census Bureau (2008)
Respondents by Marital Status
% of Respondents
60 50 40 30 20 10 0 34 31 55 50
L.E.K. Survey U.S. Census Bureau (2008)
17
9
13 2 6
18-24 25-34 35-44 45-54 55-64
65+
Not Married
Married
Divorced/ Separated
Widowed
Respondents by Gender
% of Respondents
60 50 40 30 20 10 0
L.E.K. Survey
Respondents by Income
% of Respondents
25 20 15 14 14 23 23 19 19 12 13 12 12
L.E.K. Survey U.S. Census Bureau (2008)
50
49
50
51
U.S. Census Bureau (2008)
11 11
10 5 0
5 4
4 4
Male
Female
149K 199K $200K
Note: Source:
(1) L.E.K.
Survey figures are from a balanced sample, re-weighted on age, gender and HH income. L.E.K. Media Consumption Survey (n=2,008), U.S. Census Bureau
49