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Consumer Insights on the Digital & Video

Landscape

“Who owns the future? This is the question at the heart of every stock market.”

– John Landgraf, chairman, FX Networks & FX Productions

Introduction

Technology has changed not only the way we consume entertainment, but the way we function

as a society. Eighty-nine percent of North Americans use the internet.1 From 2017 to 2019, the

number of minutes spent online increased 34%.2 Nowhere is our heightened reliance on digital

services more evident than with Gen Z (ages 7–22), the first true digital natives. For this cohort,

digital services are virtual appendages. In their experience, technological innovation has always

been both exponential and constant, and their consumer behavior is a leading indicator of what

we can expect in the future from other generations.

To help us start to better understand the changes to our digital landscape, we teamed with the

media measurement and analytics company Comscore. Using Comscore’s March–April 2019

State of Digital Services report, we created a custom analysis and deeper dive into the digital

video category and the generational variations that currently exist.

When surveyed, 80% of consumers report that “digital services are a necessary part of my life.”3

Most regularly use six or more categories of service and, on average, younger consumers (18–

1 Mary Meeker, “Internet Trends,” 10.

2 Comscore Custom Survey, US 18+, “State of Digital Services,” March–April 2019, 7.

3 Ibid., 6.

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25) use more digital services than their older counterparts.4 Further, 62% of consumers who

consider digital services a necessity are “highly loyal,” claiming that they would “stick to their

favorite services or brands even if another service might have more features.”5 The challenge

created by familiarity, habit, and inertia should not be underestimated by new entrants to the

marketplace.

Different age groups value things differently, and thus it is all the more notable that in the arena

of personal use, video streaming is the number one digital service across all ages and

segments. Further, 79% of consumers report that they are “highly satisfied” with the video

streaming services they subscribe to.6

Video streaming has become the dominant force in internet traffic. According to the international

design agency Branex, by 2022 video streaming will be responsible for 80% of all internet traffic.

Seventy-eight percent of those surveyed reported that they currently watch online videos every

week, and over half (55%) watch daily.7

“The report of my death was an exaggeration.”

– Mark Twain, New York Journal, June 2, 1897

Live TV

TV is dead. TV isn’t dead. TV is dying. TV is on life support. Every permutation and range of

options has appeared in print in recent years. Part of the problem, of course, is what is meant by

“TV.” For purposes of this report “TV,” when appearing alone, should be considered to be used

in its broadest sense (i.e., entertainment, sports, or news, stored locally or streamed live by a

provider, and consumed on a device under the user’s control). When discussing a narrower

subset of live, commercial-supported, cable and/or broadcast TV, it will be defined as “live TV.”

For ease of reading, other subsets will be defined as they are used.

So, is live TV dead? Not currently. Fifty-one percent of all TV viewers estimate that live TV

accounts for half their TV viewing, and 64% say that they watch some sort of ad-supported

content.8 This is consistent with data from Samsung Research, shared with The Hollywood

Reporter by a company executive, that found live TV viewing on smart TVs was robust (i.e.,

4 Ibid., 9.

5 Ibid., 14.

6 Ibid., 13.

7 Branex, “7 Video Trends That Will Dominate in 2019 and Beyond,” infographic, May 2019.

8 Hub Entertainment Research, “Monetization of Video,” June 2019, highlights.

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78% of adults 18+ spent an average of 4 hours and 50 minutes per day watching live TV

between Q2 2015 and Q2 2017 vs. 2% that only consumed an average 8 minutes per day).

This is not to say, however, that all is rosy. Even in 2017 there were obvious clouds on the

horizon. Samsung found that there were clear generational differences in viewing behavior, with

41% of its smart TV owners aged 18–34 only watching an average of 8 minutes of live TV per

day. These young people have bought smart TVs but are not using them to watch live TV. The

desire to escape advertisements also increases as audiences get younger. Fifty-eight percent of

those 18–24 prefer to pay for subscriptions without ads, and 20% will pay for an episode or a

season that is ad free.

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“You never change things by fighting the existing reality.

To change something, build a new model that makes the existing model obsolete.”

– Buckminster Fuller, architect

Digital Video, Streaming, and Piracy

When compared to live TV, digital video watching in the United States has steadily grown over

the past five years, and, as of 2018, accounted for 28% of total viewing hours.9 Over two-thirds

of U.S. households are streaming over-the-top (OTT) content (+7% year-over-year from March

2019).10 During the second quarter of 2019, streaming video increased 130% year-over-year.11

Consumers are streaming video at home (86 hours per month),12 through smart TVs, streaming

boxes, or sticks.

Consumers have become dependent on video streaming services as a source of entertainment.

Forty-nine percent of respondents to Comscore’s survey indicated that losing their streaming

video service would “significantly impact” their daily life, whereas only 9% felt that losing the

service would have “little effect.”13 When we look more closely, we find that 60% of younger

audiences stated that losing their streaming service would significantly impact their daily life.14

Earlier, we discussed how advertising avoidance was a factor in consumers’ choice of TV

distribution models. It should be noted that while people may express certain preferences in a

survey environment, those factors aren’t always sufficient to tip the scales and motivate an

actual purchase decision — which is why the entire constellation of factors that motivate a

decision should be considered when investigating consumers’ preferences. Several studies

(e.g., Comscore, Mary Meeker) have examined this in different ways.

In our work with Comscore, we discovered that approximately one-third of respondents across

all age groups were motivated to choose a streaming service by the promise of few or no

advertisements, whereas the top three reasons for purchasing a service were a wide selection

of content (50%–60%), good value for money (48%–59%), and good streaming quality (45%–

50%). Interestingly, the ability to watch live programming through their streaming service was a

factor for only one-fifth of the respondents overall, and its importance decreased as people

aged.15

9 Meeker, “Internet Trends,” 48.

10 Comscore Custom Survey, 42.

11 Conviva, Q2 2019 “State of Streaming TV,” 2019, 2.

12 Comscore Custom Survey, 40.

13 Ibid., 47.

14 YPulse, “Q4 2016 YPulse Quarterly: Loyal-ish, The Post TV Gen, Teen Spotlight.”

15 Comscore Custom Survey, 52.

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The top three reasons people sign up for new services are consistent across age groups. It’s

when we drill down into secondary factors that we start to see differences by age. Among older

consumers, a greater percentage cluster among fewer reasons for choosing a service. They are

also the least interested in live programs, personalized recommendations, or convenient apps.

Younger people are the opposite: They consider many factors as important in choosing a

service, and they put greater emphasis on the convenience of the app/website and the

importance of personalized recommendations.

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What factors will entice consumers to try new streaming services is a particularly salient

question today, as there are several new entrants joining the streaming entertainment

marketplace. In the summer, Mary Meeker reported that 42% of consumers will try a new

service because of a free trial or tier.16 Given the rising costs of user acquisition, the success of

“freemium” models was an important takeaway from her report. At the time of this report,

NBCU/Comcast is contemplating making Peacock, its advertiser-supported streaming service,

free.

This would be a smart move because although younger consumers are ad-avoidant, payment

continues to be an issue for them. Fifty-one percent of survey respondents between the ages of

18 and 25 indicated that they use at least one video service that is paid for by someone else.17

An even greater number of young users (two-thirds) admit to sharing account information.18

16 Meeker, “Internet Trends,” 31.

17 Comscore Custom Survey, 48. 18 Hub Entertainment Research, “Decoding the Default,” June 2018, 14.

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One of the challenges the industry faces is that many young people do not consider password-

sharing or streaming piracy to be illegal.19 Unfortunately, the industry must change consumers’

attitudes if it wants to change their behavior. Meanwhile, users are at the center of their

entertainment universe and pulling in the content they desire. They want what they want —

when, where, and how they want it.

Even Napster-era BitTorrent file-sharing has not died out. Its use is noted in global internet

traffic patterns, volume, and sources. BitTorrent is the top file-sharing protocol and a significant

source of traffic. In 2018, the now-shuttered piracy site Openload ranked eighth in Sandvine’s

global streaming traffic share. For context, that eighth-place ranking put them ahead of SkyGo

(.5%) and Hulu (.43%).20 With the increase in walled gardens and exclusive content, we

anticipate that piracy will continue, if not increase. Analysts at JPMorgan feel that password

sharing is having an impact on multichannel video programming distribution (MVPD) growth and

don't put much stock in efforts at piracy prevention, indicating that they “think that ship may

have already sailed.”21

Bundling Services

Although consumers currently tend to underestimate their overall subscriptions spend,22

businesses are smart to anticipate that as the number of services available continues to grow,

consumers may seek to winnow their spending within a given category. This is especially likely

if consumers start to cut their discretionary spending over concerns about the economy.

According to Forbes, a recent Hub Research report shows that 24% of consumers believe that

“they already have too many online TV subscriptions.”23 This represents a 14% increase from

last year.24 Additionally, 36% of survey respondents in the same study “said that they would

drop ‘at least one’ of their streaming TV subscriptions if they were to subscribe to a new one.”25

These figures should be of concern to new entrants and legacy video streamers alike.

One way in which streamers are hedging their bets is to bundle their services with those of a

complementary but distinct provider or service. For example, Amazon Prime Video is an

automatic benefit for subscribers to Amazon Prime; Hulu is bundling with Spotify; and Verizon

will be offering new and existing wireless "unlimited" customers a free year of the new Disney+

streaming service. Bundling in this manner creates differentiation in the mind of the consumer,

19 ANATOMY, “Millennials at the Gate,” 2016, 14.

20 Sandvine, “The Global Internet Phenomena Report,” October 2018, 6, 18.

21 J.P. Morgan North America Equity Research, “Video Distribution and Media,” October 22, 2019,

22 Nicole Lyn Pesce, “You’re Spending More on Your Subscription Services Than You Think,”

Marketwatch, July 25, 2018. 23 Adam Rowe, “24% of Consumers Say They Have Too Many Streaming TV Subscriptions,” Forbes, May 29, 2019. 24 Ibid.

25 Ibid.

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helps them feel that they are managing their subscriptions more efficiently, and complicates the

decision matrix when contemplating cutting a service. We anticipate that we will see more

bundling of services.

Already, one-third of consumers are bundling their services. Money and efficiency are primary

driving factors for those who bundle, but another factor is also at work: We find that 23% of

those who bundle report feeling that they have too many services, while only 7% of those who

don’t bundle report feeling that way. The most commonly bundled services are music and video.

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Both of these services also have impressive levels of consumer satisfaction. Seventy-nine

percent of survey respondents indicated that they were “highly satisfied” with their video service,

which was the highest possible option available for them to select.

New Players

Currently, four streaming video services dominate. But AppleTV+ and Disney+ have already

joined the fray, and over the next six months other powerful players will be entering the

streaming mix (i.e., Peacock and HBOMax). This means more disruption to the ecosystem and

more choices for consumers, the majority of whom already use more than one service.26 In any

given month, approximately 46% of consumers visit two or more video streaming properties.27

26 Comscore Custom Survey, 12

27 Ibid., 40.

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Currently time spent streaming heavily favors the top four players. In the United States, 38% of

consumers use Netflix on a daily basis.28 This is a huge advantage for Netflix, which is

reportedly the default entertainment choice for 21% of consumers, second only to live TV

(34%).29

To learn what its core strength is, a service must learn why consumers choose it over

competitors. For example, for those who default to live TV, live content is the most important

factor (44%), whereas for those who default to Netflix, the lack of commercials is most salient

(52%).30 Amazon Prime Video catches those who put a premium on variety (46%), while Hulu

attracts those who prioritize seeing the latest shows (44%).31 When looked at in this way, the

consumer perception of each service's brand promise becomes evident. These perceptions are

everything: Research has shown that a customer's perception of their experience has a more

significant impact on customer loyalty than that same customer’s level of actual satisfaction.32

In this context it becomes clear that Netflix should never add traditional advertisements to its

service as doing so would go against what its core consumer values most. It also provides a

lens through which to look at some of the new entrants to the sector. Are any of them providing

a new organizing principle that they can own? For example, Apple+ has a relatively meager

slate of original programs; could its ultimate goal be organizing a confusing content

marketplace? The focus is often on Netflix as the competitor to beat, but if Apple is going after

anyone, it appears to be Amazon, with its channels of content, clunky user interface, and

frustrating user experience.

“Our technology, our machines, is part of our humanity. We created them to extend ourselves,

and that is what is unique about human beings.”

– Ray Kurzweil, author, inventor, futurist

Mobile

Across all age groups, mobile phones are where many people are living their lives, but for

young people the smartphone has become a virtual limb. Research has found that over the

course of one day Gen Z consumers will look at their phones over 150 times.33 Over 50% of

them report that they use their phones for five or more hours each day, and 31% say that they

are uncomfortable if they are separated from their phones — even for 30 minutes.34

28 MIDiA, “Netflix After Q2 2019 | Post-Peak or Strategic Reset?” July 29, 2019, 2.

29 Hub Entertainment Research, “Decoding the Default,” September 2019, 11, 12

30 Ibid., 21–22.

31 Ibid., 24.

32 Philipp Klaus and Stan Maklan, “Towards a Better Measure of Customer Experience,” International

Journal of Market Research 55, no. 2 (2013), 227.

33 YPulse, “Gen Z & Millennials’ Favorite Apps Right Now,” August 12, 2019.

34 The Center for Generational Kinetics, “The State of Gen Z 2018,” Fall 2018, 8.

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The smartphone holds a unique position in the entertainment-viewing landscape of the Gen Z

consumer.

Seventy-three percent of 13–18-year-olds and 65% of those 19–37 watch content on their

smartphones.35 Further, 28% of Gen Z report that their smartphone is their device of choice to

watch TV content, which is quite a contrast to the 6% of Millennials who say the same thing.36

This percentage drops to 5% when we expand our examination to the general public.37 This

could reflect the lack of control Gen Z has, when compared to older generations, over what is

watched on the family television set. Regardless, however, it is notable that in just the past year

smartphones edged out computers to become the primary way in which online content is

viewed.

35 YPulse, “Gen Z & Millennials’ Favorite Apps Right Now.” 36 YPulse, “How Gen Z Is Watching TV & Video Right Now, in 5 Stats,” August 5, 2019. 37 Hub Entertainment Research, “Decoding the Default,” August 2019, 26.

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“Social media allows us to behave in ways that we are hardwired for in the first place — as

humans. We can get frank recommendations from other humans

instead of from faceless companies.”

– Francois Gossieaux, The Hyper-Social Organization

Social

Young people use social media both to connect with each other and to consume content. Of the

six primary screen touch points38 entertainment brands have with consumers, only social

engagement has a statistically significant relationship with entertainment brand recognition (i.e.,

the ability of consumers to identify the platform that created the programs they love).

The most popular app across all ages and genders is Instagram. A primarily visual medium,

Instagram’s evolution underscores how communication has shifted from words to images.

Originally a photo-sharing app, its video-based stories are now sources of revenue. Given that

more than 50% of day-to-day transaction payments are now digital, commerce via app cannot

be ignored.39

38 The six touch points are on-air promotion, social media, search, website, mobile app, and digital

advertising. 39 Meeker, “Internet Trends,” 120.

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Each of the top four apps on this list serves a slightly different purpose for users. Understanding

the purpose of each app is key to comprehending how best to leverage them for marketing,

promotion, and sales. Facebook is increasingly viewed as a destination for group events and

sharing, Instagram for messaging and for identity forming through sharing and following

brands/influencers, and Snapchat is primarily for immediate and ephemeral communication with

peers. YouTube is both an entertainment platform and a social one, both a source of content

and of discovery, and its unique status has helped it become one of the most significant

entertainment platforms worldwide. The importance of YouTube to Gen Z cannot be overstated.

Slightly more than three-quarters of the generation watch YouTube on a weekly basis.40 It has a

94% monthly penetration among 16–19-year-olds.41 YouTube is also the dominant mobile

streaming app, accounts for 35% of global mobile traffic, and is the number one source of

mobile traffic in North America, Latin America, Europe, the Middle East, and the Asia Pacific.42

The mindless channel surfing of previous generations has been replaced by aimless scrolling

through the feed.

40 YPulse, “How Gen Z Is Watching TV & Video Right Now, in 5 Stats.”

41 MIDiA Research “Gen Z: Meet the Young Millennials,” June 2017, 2. 42 Sandvine, “The Mobile Internet Phenomena Report,” February, 2019, 5.

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“The human voice is the most perfect instrument of all.”

– Arvo Pärt, composer

Smart TVs and Voice Control

As was discussed earlier, people love the small screen on their smartphones. That doesn’t

mean, however, that they’ve forsaken big screens. Fifty percent of televisions are less than

three years old and are 50” or bigger.43 Smart TVs are found in approximately 75% of all U.S.

households, and these TVs are supplying detailed data to the marketplace — and to advertisers

who want to target consumers based on their behavior.44

While initially, people interacted with their smart TVs in much the same way that they previously

interacted with their unconnected TV sets, habits are beginning to change. For the purposes of

the media industry, it’s useful to think of the smart TV as just another, albeit much larger, glass

surface consumers use to access content. Thirty-seven percent are using their televisions to

stream music online. This is roughly twice the percentage that have used their sets to browse

the internet.45 Overall, content streaming has experienced steady growth — from 1.2 billion GBs

in March 2017 to 2.7 billion GBs in March 2019.46

User interactivity with the television set is likely to accelerate as streaming services proliferate

and an increasing number of sets are enabled with voice-command capability.

43 Hub Entertainment Research, “Evolution of the TV Set,” infographic release, July 2019.

44 Deloitte Center for Technology, Media & Telecommunications, “2019 Media & Entertainment Industry

Outlook,” 2019, 4. 45 Hub Entertainment Research, “Evolution of the TV Set.” 46 Comscore Custom Survey, 41.

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Contrary to tech early-adoption stereotypes, the 65+ age group use voice-search technology

very heavily, with 75% using it at least once daily.47 The rise in voice technology for search

highlights the need for entertainment companies to make sure that their content is optimized for

voice. Traditional search on the internet at least provides companies a screen of opportunity

with which to grab consumers’ attention. Voice search is liable to provide one answer and a

winner-take-all result.

47 Lily Ray, “How Much Should We Care About Voice Search?” Search Engine Land, June 27, 2019.

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“I long ago lost the ability to keep track of every scripted TV series. … But this year, I finally

lost the ability to keep track of every programmer who is in the scripted programming

business. … This is simply too much television.”

– John Landgraf, chairman, FX Networks & FX Productions, 2015

Content Consumption

In 2015, John Landgraf said that there was too much television. Little did he know it was only

the beginning of the content arms race. The end of mass media and the ascent of the consumer

as programmer of their own personal network-of-one has resulted in a heretofore unimaginable

fracturing of the viewing audience. In the first quarter of 2019 there were a whopping 308

different networks selected as “most watched” across Comcast households.48 Further, video-on-

demand (VOD) consumption in Comcast households has doubled since 2016.49

This explosion in content is liable to continue unabated as more companies launch direct-to-

consumer subscription VOD and advertising VOD offerings and use bespoke content offerings

to help grow their number of subscribers.

The good news for programmers and services alike is that it appears that the more services

consumers sign up for, the more content they watch.50

48 Comcast Spotlight, “The TV Viewership Report,” Q1, 2019, 7.

49 Ibid., 5. 50 Comscore Custom Survey, 44.

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What, Why, and How

Gen Z has never known a world without terrorism or global warming. The older members of the

cohort came of age after the economic crisis of 2008; even the youngest members are aware of

the threat of gun violence in their schools. As a result, they are more anxious than the

generations that came before them.51 According to YPulse, both Gen Z and Millennials are

managing their anxiety through their viewing habits. When presented with an open-ended

question about what they watch to alleviate their stress, the number one choice for respondents

ages 13–36 was comedy, followed by music content.52

51 “The Most Anxious Generation Goes to Work,” Wall Street Journal, May 9, 2019.

52 YPulse, “The Top 13 Media & Shows that Gen Z & Millennials Turn to When They’re Stressed,” July 23, 2019.

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YouTube is the only platform to appear in the top 10, and the other entrants provide evidence of

how that platform is changing the nature of content itself.

Generationally we see overlap between Gen Z and Millennials, with both groups leaning into

comedy, science fiction, and fantasy. But when their choices are examined more closely, some

differences in preferences emerge. Original shows are significantly more popular with 18–34-

year-olds than with people aged 35–64 (82% v. 66%).53 Gen Z more frequently tunes into

cartoons, esports, and vloger videos but appears to be less interested in news, sports news,

and sports than Millennials. This lack of interest in sports (coupled with a decline in youth sport

53 Hub Entertainment Research, “Decoding the Default,” June 2018, 92.

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participation)54 is a clear warning sign for outlets betting heavily on live sports and paying dearly

for the sports rights.55

Documentary and unscripted programming has experienced a renaissance as a result of

changes in digital production and distribution technology. Thirty-five percent of Netflix weekly

average users watch documentaries.56 There are 4.5 billion hours of “how-to” content viewed

each year.57 When taken in conjunction with the success of Masterclass, an online service that

sells subscriptions and a la carte access to videos featuring instruction from an expert (master)

in a given field (e.g., Shonda Rhimes teaches writing for television), educational content may be

an opportunity for differentiation and/or growth.

There is a relationship between original content and binge viewing. Consumers who binge-

watch content are more likely to view originals (85% v. 25%).58 Further, 40% of binge viewers

indicate that originals make them “a lot” more likely to default to a subscription VOD service,

whereas only 4% of those who don’t engage in binge-viewing feel that way.59 So should Netflix

pull back on binge releases of content? Probably not, especially if the experience of binge-

viewing is part of their consumer brand promise. In fact, research has found that consumers’

perceptions of a service are more closely linked to their experience with the service, rather than

what the service actually delivered.60 In other words, for people who enjoy being able to binge

content, the ability to binge a mediocre show is more important to them than being able to view

a premium show on weekly release.

54 The Aspen Institute, “Sport Participation and Physical Activity Rates,” 2019.

55 YPulse, “Are Gen Z & Millennials Watching the Same Kind of Content? Sort of,” November 7, 2017.

56 MIDiA, “Netflix After Q2 2019 | Post-Peak or Strategic Reset?” 7. 57 Meeker, “Internet Trends,” 251. 58 Hub Entertainment Research, “Decoding the Default,” June 2018, 91. 59 Ibid., 95. 60 Goldstein, S.M. Johnston, R., Duffy, KJ Rao, J (2002) The service concept: The missing link in service design research? Journal of Operations Management, 20,2, 121-134.

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“In the midst of chaos, there is also opportunity.”

– Sun-Tzu, The Art of War

Takeaways

● Consumers are at the center – The end of mass media has meant that the consumer

is at the center of their media experience. Their experience of the service is the best

predictor of their loyalty and satisfaction.

○ 80% feel that digital services are “a necessary part of my life.”

○ 62% are highly loyal to their services and report that they will not change

services — even if the new service offers more features.

○ 79% of consumers are “highly satisfied” with their video streaming service.

● Live TV – Is not dead.

○ Clear generational differences

■ 41% of smart TV owners aged 18–34 watch an average of 8 minutes live

each day.

■ 58% 18–24 pay for subscriptions without ads.

● Streaming

○ Motivations for subscribing

■ Wide selection of content

■ Value for money

■ Good streaming quality

■ Under 1/3 motivated by advertisement avoidance

■ 1/3 motivated by live programming

● 1/3 for those 18–25

● User acquisition strategies

○ Free trials – 42% will try if service is free.

■ Engages people

■ Enables nonpiracy usage

■ Facilitates social conversation and the network effect for awareness

○ Bundling

■ Money and efficiency are drivers.

○ Wide selection of content (both lean in and lean back)

○ Understanding why your audience likes your platform. The core viewing

audience of each streaming service seems to focus on and value different

benefits.

■ Service brand promise becomes reason consumers default to a service.

● Piracy

○ BitTorrent piracy still exists.

○ Attitudes: Young people (18–25) do not think password-sharing or pirating

streaming content is illegal.

■ 2/3 of 18–25-year-olds share account information.

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● Youth – Young consumers help us understand the future behavior of all consumers.

They are early adopters and are unlikely to adopt regressive technologies as they age.

○ Mobile – Young people view a significant amount of content on their

smartphones. Their phones mediate their relationship with entertainment.

■ Looking at phones ~150 times per day

■ 73% of 13–18-year-olds watch content on phones.

■ 28% of 13–18-year-olds say mobile is device of choice to watch content.

○ Social – Young people discover content through social platforms, and their

engagement with entertainment brands’ social platforms helps them associate an

entertainment brand with the content the brand creates.

■ Instagram is most popular app across genders among 13–37-year-olds.

■ YouTube has 94% penetration among 16–19-year-olds, and 35% of all

mobile traffic, globally.

○ Live TV – Young consumers are less interested in live sports than previous

generations.

● Content & content discovery

○ The more services, the more consumption.

○ Gen Z & Millennials are the anxious generations.

■ Manage moods with entertainment

● Nostalgia

● Comedy

● Superhero & Sci-Fi

○ Voice – Search is becoming more important.

○ Social/word-of-mouth

● Emerging tech

○ Smart TV

■ In 75% of homes

■ No longer used in the same manner as traditional TV

■ Just another glass surface via which people can consume content

○ Voice assistance

■ Anticipate growth in voice, build voice skills for content

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Background and Data Sources

Data sources referenced in this report include: ANATOMY, “Millennials at the Gate,” 2016. Branex, “7 Video Trends That Will Dominate in 2019 and Beyond,” infographic, May 2019. Comcast Spotlight, “The TV Viewership Report,” Q1 2019. Comscore Custom Survey, US 18+, “State of Digital Services,” March–April 2019. Comscore Media Metrix Multiplatform Key Measures, Total Digital, US 18+, May 2019, US. Conviva, Q2 2019 “State of Streaming TV,” 2019. Deloitte Center for Technology, Media & Telecommunications, “2019 Media & Entertainment Industry Outlook,” 2019. Goldstein, S.M., Johnston, R., Duffy, KJ. & Rao, J., “The Service Concept: The Missing Link in Service Design Research?” Journal of Operations Management 20, no 2 (April 2002). Hub Entertainment Research, “Decoding the Default,” August 2019. Hub Entertainment Research, “Decoding the Default,” June 2018. Hub Entertainment Research, “Evolution of the TV Set,” infographic release, July 2019. Hub Entertainment Research, “Monetization of Video,” June 2019. J.P. Morgan North America Equity Research, “Video Distribution and Media,” 22 October 2019. Klaus, Philipp, and Maklan, Stan, “Towards a Better Measure of Customer Experience,” International Journal of Market Research 55, no. 2 (2013). Meeker, Mary, “Internet Trends,” 2019. MIDiA, “Netflix After Q2 2019 | Post-Peak or Strategic Reset?” July 29, 2019. MIDiA Research, “Gen Z: Meet the Young Millennials,” June 2017. Pesce, Nicole Lyn. “You’re Spending More on Your Subscription Services Than You Think,” Marketwatch, July 25, 2018. Ray, Lily, “How Much Should We Care About Voice Search?” Search Engine Land, June 27, 2019. Rowe, Adam. “24% of Consumers Say They Have Too Many Streaming TV Subscriptions,” Forbes, May 29, 2019. Sandvine, “The Global Internet Phenomena Report,” October 2018. Sandvine, “The Mobile Internet Phenomena Report,” February 2019. The Aspen Institute, “Sport Participation and Physical Activity Rates,” 2019. The Center for Generational Kinetics, “The State of Gen Z 2018,” Fall 2018. “The Most Anxious Generation Goes to Work,” Wall Street Journal, May 9, 2019. YPulse, “Q4 YPulse Trend Report: Loyal-ish, The Post TV Gen, Teen Spotlight.” YPulse, “Are Gen Z & Millennials Watching the Same Kind of Content? Sort of,” November 7, 2017. YPulse, “Gen Z & Millennials’ Favorite Apps Right Now, “ August 12, 2019. YPulse, “How Gen Z is Watching TV & Video Right Now, In 5 Stats” August 5, 2019. YPulse, “The Top 13 Media & Shows that Gen Z & Millennials Turn to When They’re Stressed,” July 23, 2019.

Detailed Comscore Survey Methodology

● Comscore’s “State of Digital Services” combines various unique and proprietary data

sets, including behavioral and survey.

● Comscore has robust experience conducting large-scale surveys in order to represent

the attitudes and behavior of broad segments of populations. A survey instrument was

designed and implemented by Comscore.

○ Recruitment Methodology: Survey respondents were survey panel members who

were contacted via email and invited to participate. Panelists were recruited both

from Comscore’s own panel and from trusted third-party sample providers. The

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Comscore panel consists of approximately 1 million members who agreed to

have their online activities continuously and passively observed.

○ Screening Criteria: Survey respondents were required to be U.S. residents, aged

18+, who own (or regularly use) a computer or mobile device and had used at

least one digital service in the past month.

○ Total Respondents: n = 2,374.

○ Fielding Dates: March 22–April 2, 2019.

○ Balancing: Respondents were balanced on age, gender, income, employment

status, and usage of certain devices to reflect the U.S. online population, ages

18+.

About the Author:

Gabriella Mirabelli is the executive vp consumer insights and brand strategy at Valence Media, a voice

network contributor to Adweek and the host of the Up Next podcast. Valence Media is a diversified media

company comprised of Billboard-Hollywood Reporter Media Group, Dick Clark Productions, MRC media

and stakes in various other media ventures.