How media consumption habits are changing

Digital media strategies

Media consumption and supplier strategies

Douglas McCabe | [email protected] | 07966 015 469

4 March 2014

mailto:[email protected]

Three waves of tech disruption

Digital media strategies 2014

Web emerges - 1995 Penetration grows 75% penetrationOngoing evolution

and disruption

Smartphones emerge - 2007

50%+ penetrationGrowth to 75% in

UK by 2015

Tablets emerge 2010, 400m sold by

2013

Penetration grows to 50% of homes by

2015

2

Steadily increasing impact on newspapers and magazines, with circulation declining and consumption shifting away

Mass audience moves online

Systemic deflation of online ad revenues, waves of new entrants

Mass migration of time, attention and ad revenue

Further major disruption in user behaviour and competitive landscape

Mobile is becoming the predominant access platform

0

25

50

75

100

125

150

175

200

225

250

Global quarterly unit shipments (m)

PCs iPhone & Android smartphones Tablets

[Source: Gartner, Apple, Google, Enders Analysis]

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jun

-07

Dec

-07

Jun

-08

Dec

-08

Jun

-09

Dec

-09

Jun

-10

Dec

-10

Jun

-11

Dec

-11

Jun

-12

Dec

-12

Jun

-13

Global install base (m)

PCs iPhone & Android smartphones Tablets

[Source: Apple, Google, IDC, Enders Analysis]

Digital media strategies 2014 3

UK consumer is going ‘mobile’

1724

13

70

0

40

0

10

20

30

40

50

60

70

80

Mobile internet devices in use, UK (m)

Residential broadband lines Smartphone unitsTablet units [Source: Enders Analysis]

70%61%

51%44% 40% 37% 35% 34% 33%

16%

18%

20%

21%21%

22% 22% 22% 23%

14%21%

29%35% 39% 42% 43% 44% 44%

0%

20%

40%

60%

80%

100%

2012 2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f

Share of internet consumption (% of total)

PC Smartphone Tablet

Excludes TV-based and offline app usage [Source: Enders Analysis]


Mobile is transforming internet consumption


492 506 519 519 558489 479 483 533 519 521 535 504

244270

299358

417

397 408 410

476 475 442 435429

5253

5265

69

75 71 77

87 9084 86

90

787829

870

942

1,045

960 958 969

1,096 1,0841,047 1,056

1,023

0

250

500

750

1,000

1,250

Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13

PC Mobile app Mobile browser 2+ PC users, 18+ mobile device users; mobile includes tablets from Feb 2013 [Source: comScore]

US time spent online by device (bn minutes)

Audience and consumption shifting from browser to apps

0

10

20

30

40

50

60

70

Stated cumulative app store downloads (bn)

iOS Android

[Source: Apple, Google]

21%

48%

10%

10%

11%

Facebook

Facebook and other social apps

Other social apps, no Facebook

No social apps

No smartphone

Survey of UK 15-24s [Source: Enders Analysis/TNS-RI survey]


UK 15-24s’ use of social apps, May 2013 (% of mobile users)

Mobile internet provides many alternatives modes of interaction


Desktop internet Mobile internet

Website in web browser – unchanged since 1990s

Niche apps (email, IM, music)

Website in web browser, web search

Apps and app stores – no clarity on roadmap

In-app payments, hybrid apps, widgets, voice search, social messaging, barcodes, location, push notification etc

Over 50 social messaging apps have more than 1m downloads on Google Play

Search is no longer the dominant acquisition channel

Web is no longer the dominant interaction model

Atomisation and silos


Atomisation

• Existing trend on the desktop web to unbundle content

• Embedding within social networks detaches content from the original site

• Content is shared, tagged, pinned – spreading far away from the origination point

• Cards turn your content into packets that can go anywhere

Silos

• Apps generate far higher engagement than the web – if you can get an install

• Compelling model for browsing content in a specific vertical – and gaming, of course

• Google and Apple exploring ways to deep-link into apps from the web

Twitter building rich advertising inventory


[Source: Twitter]

Drive app installs

Link to app

Collect names and email addresses

Facebook revenue by source


0

500

1,000

1,500

2,000

2,500

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13

Revenue $m

Desktop ads Mobile ads Payments & Other

[Source: Facebook, Enders Analysis]

Changing nature of search: from web to Google Now


Text search

Type a search term in a box

Google gives you list of pages that it thinks contain the right answer, based on key words

Example

What’s the weather like in Bristol?

Result: a link to the BBC weather site page for Bristol

Answer

Type a search, or do a voice search with Google Voice or Siri

Google or Siri gives you what it thinks is the answer, plus links

Example

What’s the weather like in Bristol?

Result: “ the weather is terrible”, plus links

Predict

Google has seen your email and knows you’re going to Bristol, so it puts the weather on your home screen

Siri knows why you’re going

Example

Intelligently suggest info on weather, travel, restaurants, traffic in Bristol, London …and…

Activity and device usage: time of day analysis


Device use by time of day

Morning Transit Work Noon Work Transit Evening Night

Smartphone

Tablet

Desktop - -

Types of news contents by order of importance

Social interactions: Facebook, google+, twitter

[Source: Monday Note]

Smartphone DesktopTablet Smartphone Desktop

News stories Morning briefings News stories

Features Quick updates / alerts Data

Morning briefings News stories Infographics

Videos Videos Videos

Newspaper digital revenue starting to gather momentum


99% 98% 98%92% 92% 90%

76%68%

54%

1% 2% 2%8% 8% 10%

24%32%

46%

0%

20%

40%

60%

80%

100%

Express Sun Mirror Mail Times Telegraph Independent Guardian FT

UK national newspapers’ print versus digital revenue, 2013 (% of total)

Print Digital

Circulation and advertising revenue only; excludes Metro [Source: Enders Analysis]

By 2020, 15% of viewing will not be to the TV set, rising to 29% among 16-34s


97 94 92 90 88 86 84 83 82 81 81

22

22

2 3 3 4 4 4 4

1 4 6 8 10 12 13 13 14 15 15

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2019f 2020f

Connected viewing as a share of total viewing (%)

TV: Live linear/PVR time-shift TV: On demand/DVD Viewing to other screens

[Source: Enders Analysis, based on BARB/InfoSys+ and other sources]

Home video returns to growth: digital spend offsetting packaged media decline

16.218.2

20.021.1 21.0 20.6 20.1 19.4

17.3 16.314.6

12.911.8

0.7

0.7

0.70.7 0.8 1.0 1.3

1.6

2.12.3

3.45.2 6.5

16.9

18.9

20.721.8 21.8 21.6 21.4 21.0

19.418.6

18.0 18.1 18.2

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US digital home video expenditure ($bn)

Physical formats Digital/over-the-topIncludes all retail and rental spending on physical and digital f0rmats [Source: DEG]


Mobile monetisation is rising fast after slow start


34

38

3536

38

41

38 39 39

57 6 6

8

1112

1316

0

10

20

30

40

50

Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13

US internet advertising spend per device user ($)

PC Mobile/tablet [Source: Enders Analysis based on IAB/PwC, comScore]

Common challenge of adapting to multiple devices, screen sizes, platforms & use cases


Move to media consumption over mobile devices

Coherent content strategy over multiple platforms

Strong mobile apps/extensions

Significant ongoing investment & core competency in new technologies

Operating model challenges


Print

Digital

Browse at newsstand

Buy single copy

SubscribeEvents

and reader offers

Pinterest

Tumblr

Twitter

Follow link to website

Share on social media

iPhone app

Kindle edition

Visit website

homepage

iPad app

Android mobile

app

Android tablet app

Read article

Download or

subscribe to:

Comment on article

Read more

articles

Return visit

Google

Facebook

Multiplatform data


Consumer retail model

• Single customer view model, with multiple touch-points

• Older demographics are multimedia

• Parallel trials

• Relevant customisation and personalisation

Content structure

• Atomised consumption and very complex distribution

• Content structured in packets for the most flexible usage

Operating structure

• Control and dashboard

• Rapid decision-making

• Feedback loops

Brands are the key drivers


Documents

How media consumption habits are changing