Magid Media Futures:
Digital Video, OTT, SVOD, Messaging, Social Networks, Gaming, Esports and VR
CONFIDENTIAL AND PROPRIETARY © 2016 by Frank N. Magid Associates, Inc.
Any duplication, reproduction or usage of this document or any portion thereof without the written consent of the firm is prohibited.
1
About Magid
§  Magid is renowned for its work in the media and entertainment industry, with both traditional and emerging players. We help develop and launch
new products and services and work with clients to re-imagine their businesses, furthering content, marketing, distribution, advertising sales,
programming, promotion, and branding efforts.
Digital
Games
Print Media
Mobile
Cable MSOs
TV & Cable
Networks
2
Methodology
•  Nationally representative online survey of 2,400 consumers ages
8-64. The sample is matched to the US Census. The study
evaluates media attitudes and behaviors of consumers as it
relates to devices, video, TV, gaming, social networking and more.
•  This sample represents approximately 200 million Americans
•  Data was collected from July 21 – August 5, 2016
•  A high quality online research panel and data collection firm was
used for recruitment and data collection
3
DIGITAL AS PRIMARY
ENTERTAINTMENT SOURCE
4
Top Platform for Entertainment – Digital Options
Overtake TV
What is your primary medium for entertainment? Select only one.
2011
2012
2013
2014
2015
2016
46%
44%
39%40%39%
37%
32% 33%
29% 28%
24%25%
4%
Laptop or PC
Television
6%
14%
13%
10%
8%
Smartphone
Base: Total N=2400. Q1.2 What is your primary medium for entertainment? Select only one.
6% 5%
12%
10%
7% 7%
Video game console
8% 9% 8%
6%
2% 3%
Tablet
5
Digital Devices Exceed TV As Primary Entertainment
Source Among Younger Generations
What is your primary medium for entertainment? Select only one.
Total
Millennials
Plurals
37%
31%
25%
21%
20%
21%
20%
22%
18%
14%
16%
13%
12%
6%
Television
Laptop or PC
Smartphone
Base: Total N=2400. Q1.2 What is your primary medium for entertainment? Select only one.
Video game
console
5%
Tablet
6%
6%
5%
A connected TV
device
6
CORD CUTTING
7
Intent To Cord-Cut Continues To Rise
% of Pay TV Subscribers Extremely Likely To Cancel Pay TV Service in Next 12
Months, And Will Not Switch to Another Pay TV Service
(Among 18-64 Pay TV Subscribers)
2011
2012
2013
2014
2015
2016
5.7%
3.8%
1.9%
2.2%
2.7%
8.7% of 25-34 year-old Pay
TV Subscribers say they are
very likely to cut
9% of Millennial Pay TV
Subscribers say they are very
likely to cut
2.9%
Cord-Cutters (18-64)
Base: Total ages 18-64 with pay TV service, N=1636. Q10.4. How likely are you to cancel your pay TV service in the next 12 months? 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? Based on those ‘extremely likely’ to cancel pay TV N=170
8
OTT Remains Key Driver Of Cutting, Far More Than Cost
Reasons for Canceling Pay TV Service
(Among very likely cord-cutters)
75%
Combined OTT Reasons*
I am satisfied with what I can receive over-the-air
45%
39%
I have entertainment options on the Internet*
I can watch the TV shows and
movies I like on the Internet*
I am satisfied with online streaming options on my
TV from services like Netflix, Hulu*
Combined OTT reasons
2013: 54%
2014: 76%
2015: 77%
36%
32%
It's too expensive
29%
I can watch the TV shows and
movies I like on DVD
20%
I don't watch enough TV to make it worth it
20%
Cost reason:
2014: 40%
2015: 30%
Base: Those ‘very likely’ to cancel their pay TV service who will ‘go without pay TV service’ N=56. Q10.6 For which of the following reasons will you go without pay TV
service?
9
Are Skinny Bundles The Future?
“Skinny bundle” is defined as picking a cable/satellite package with a
smaller number of channels at a lower price than a typical cable bundle
52%
$48: Average fee willing to pay
for skinny bundle
Of consumers with a TV set are
interested in subscribing to a
‘skinny bundle’. 32% are very
interested.
Base: Among those with a TV in the HH – Total N=2258; Millennials N=837. Q12.1: How interested are you in subscribing to a skinny bundle or picking and choosing a cable/satellite package with a smaller number
of channels at a lower price than a typical cable bundle? Base: Among those interested in a skinny bundle (4-5) and who watch a major channel – Total N=1166; Millennials N=459. Q12.1B: How much would you be
willing to spend on this skinny bundle per month? *Skinny bundle defined as picking a cable/satellite package with a smaller number of channels at a lower price than a typical cable bundle.
10
OTT AND DIGITAL VIDEO
11
Daily Online Video Viewing Still On The Rise
Frequency of Viewing Any Type of Video Online on a
Computer, Tablet or Smartphone
2014
87%
92%
2015
2016
93%
32%
Ever
41%
44%
Daily+
Base: Total N=2400. Q34: About how often would you say you watch online video? This is any online video you view on a computer, smartphone, tablet, or TV connected to
the Internet.
12
Meanwhile, SVOD Subscriptions Have Been Rising
Steadily In All Major Demos
SVOD Subscriptions
2013
2014
2015
2016
84% 86%
70% 72%
53%
59%
64%
80% 83%
70%
64%
53%
37%
41% 43%
26%
Total
Millennials
Families with kids in HH
Base: Total N=2400. Q28: Do you, or does anyone in your household, subscribe to any of the following? Select all that apply.
Boomers
13
SVOD Market Growing Among Existing Users
# Of SVOD Services Subscribed In A HH
2015
30%
2016
2016: Among those who subscribe
to at least 1 SVOD service, 63%
subscribe to 2 or more
32%
28%
27%
22%
19%
None
1
2
Base: Total N=2400. Q28: Do you, or does anyone in your household, subscribe to any of the following? Select all that apply.
13%
11%
10%
8%
3
4+
14
Online Video Viewers Watch One-Third Of All Digital
Video On Mobile (Smartphone/Tablet)
Among Online Video Viewers
2.5X
More online video viewing is being done on
TVs connected to the Internet from 2014.
33%
Of ALL video viewing is done on smartphone
or tablet.
Online video on a
computer
20%
Video on a smartphone
46%
14%
Video on a tablet
19%
TV connected to the
Internet
Base: Online video viewers, N=2228. Q34.2: In a typical week what percentage of video you watch is viewed online on a computer, smartphone, tablet or a TV connected
to the Internet? Must add up to 100%.
15
Smartphones Increasingly Becoming TV Screens –
More Full-Length Content Viewed On Mobile Devices
27%
% of device owners who watch full-length
TV or movie content on their devices
(Among mobile device owners)
2014
2016
53%
of smartphone users agree “my
phone is my TV.”
46%
38%
40%
42%
28%
16%
of Millennial smartphone users agree
“my phone is my TV.”
Smartphone
Tablet
Mobile Devices
Mobile 2016 - Base: Smartphone users, N=2307. Tablet users, N=1843. Smartphone and tablet users, N=1740. Q11.2 Which of the following types of video do you watch
regularly (once per week or more) on your tablet? Select all that apply. Q30.2Which of the following types of video do you watch regularly (once per week or more) on your
16
Three Quarters Of Consumers Use A Connected TV –
Internet Streaming Devices Are Driving That Growth
Methods Used For Streaming Video To A TV
74%
Connect a TV to the
Internet for streaming
(+15% from 2015)
2016
2015
33%
30%
Video game console
Internet streaming device
Blu-ray player
Computer connected to TV
20%
31%
50% Millennials
37% Millennials
22%
18%
17%
22%
Video Entertainment 2016 – Base: Total N=1600. Q.20.1 Which of the following do you connect to a TV in order to watch TV shows and movies streaming from the
Internet on a TV screen? Select all that apply.
17
Smart TV Adoption Will Accelerate Streaming
In a typical week, what percentage of all your video
viewing is done using each of the following?
Live TV
Total
Smart TV owners
Streaming to any device*
40%
33%
VOD
24%
28%
DVR
DVD
10%
11%
Downloaded/rented online content
15%
16%
9% 3%
8% 4%
Among HHs with TVs –
Smart TV Ownership
2016: 39%
2015: 31%
2014: 21%
2013: 15%
*Streaming to a PC/laptop, mobile device or TV set.
Live TV = ‘live TV shows or movies as they air on broadcast, cable or satellite’
Video Entertainment 2016 - Base: Total, N=1600. Smart TV owners, N=670. Q12.3: Considering all of the following sources you may use to view any type of video content,
in a typical week, what percentage of all your video viewing is done using each of the following? MMF 2016 – Base: Those that have a TV in the HH. Q9B: Which of the
18
Traditional Live TV Is Still The Most Watched, But A
Variety Of Streaming Mediums Are Used As Well
On a typical 24-hour day, how many hours do you watch …
None
Watch this way, but not daily
Live cable or satellite TV
Stream through computer
Stream to connected TV
Stream through console
13%
7%
Less than one hour
12%
35%
One to two hours
26%
11%
44%
47%
Base: Total N=2400. Q8: On a typical 24-hour day, how many hours do you watch …
Three to four hours
Five+
20%
14%
7%
19%
12%
8%
22%
12%
16%
14%
11%
10%
11%
10%
9%
10%
19
And Livestreaming Is The Next Frontier
Sources Used To Watch Livestreaming Video
YouTube
45%
Facebook Live
24%
Livestream
11%
Twitch.tv
10%
Periscope
UStream
I don’t ever view livestreaming video
•  77% of 8-64 year olds
watch livestreaming video
•  85% of Millennials
9%
6%
23%
Base: Total N=2400. Q36: Which of the following do you ever use to watch livestreaming 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. – Top 7 shown
20
Currently 1 in 10 Report Having A 4K TV In Their Home;
Holiday Sales Will Likely Drive This Number Up
Which of the following do you have in your household?
68%
37%
HDTV
Smart TV
Base: Total N=2400. Q9B: Which of the following do you have in your household? Select all that apply.
11%
9%
4K/Ultra HD TV set
3D-TV set
21
GAMING
22
PC Most Widely Used Platform By Active Gamers, But
Smartphone Is Close Behind
Percentage of Population Playing Weekly+ On Each Platform
46%
PC
43%
Smartphone
Console
Tablet
Base: Total N=2400; Q117: How often do you play games on the following?
38%
37%
23
Gaming Is Cross-Platform Today; Majority Of Weekly+
Gamers Play Other Major Platforms
Cross Platform Play
Weekly+ PC Gamer
Weekly+
Smartphone Gamer
Weekly+ Console
Gamer
Weekly+ Tablet
Gamer
-
75%
76%
78%
Also Plays
Smartphone Wkly+
70%
-
77%
79%
Also Plays Console
Weekly+
63%
67%
-
72%
Also Plays Tablet
Weekly+
63%
67%
69%
-
Also Plays PC
Weekly+
Base: All gamers. N=1631. Base: Weekly+ Smartphone Gamers. N=1041. Weekly+ Tablet Gamers. N=889. Weekly+ PC Gamers. N=1102. Weekly+ Console Gamers. N=916. Q117:
How often do you play games on the following?
24
Among Gaming Devices, Consoles Have The Highest
Number Of Hours Played
How many hours per week do you spend playing games on the following?
(Among weekly+ gamers of each platform)
PC
Smartphone
45%
16%
20%
47% 45% 47%
20%
Console
Console: 41% game for 5+ hours each week
21%
13%
Less than 1 hour per week 1-5 hours per week
Tablet
18%
23%
20%
18%
19%
13%
12%
5-9 hours per week More than 10 hours per week
Base: Total N=2400. Q118: How many hours per week do you spend playing games on the following?
25
SMARTPHONE AND TABLET
26
Smartphone Penetration is Nearing Saturation;
Tablet Growth Is Stagnant
Smartphone Owners/Users
Tablet Owners/Users
(Among 8-64 year olds online)
(Among 8-64 year olds online)
61%
85%
82%
71%
67%
2015
2016
57%
44%
44%
29%
2012
2013
2014
12%
2014
Est.
2013
2012
2011
31%
2011
66%
2015
2016
2016: 97% Millennials
Base: Total N=2400. QI/QJ: Which of the following do you own/use regularly?
2011
2012
2013
2014
2016: 74% Millennials
27
On Their Respective Devices, Tablet Users Game and
Watch Video More Than Smartphone Users
Which of the following things do you do regularly (at least once per week) on your smartphone/tablet?
(Among smartphone and tablet owners/users)
Use social networks
56%
57%
Listen to music
55%
56%
50%
Play games
47%
Watch video
64%
42%
41%
Get weather information
31%
Get local news
29%
Get national news
Research products/services to buy online
63%
25%
38%
Smartphone Owners/Users
36%
Tablet Owners/Users
33%
Base: Among smartphone owners/users - Total N=2034; Among table owners/users N=1604. Q170: Which of the following things do you do regularly (at least once per week) on
your smartphone? Select all that apply. – Top 8 shown
28
Mobile Gamers Are Similar Overall – Tablet or
Smartphone
51%
53%
Male
7%
11%
15%
14%
12-17
18-24
13%
10%
23%
23%
25-34
19%
19%
35-44
13%
13%
45-54
55-64
Tablet Gamers
White
64%
64%
Hispanic
16%
16%
Black
11%
12%
College Graduate or
Higher Degree
53%
53%
Married
54%
62%
Child(ren) in
Household
(asked of adults only)
57%
53%
Income > $75K
44%
45%
49%
47%
Female
8-11
Smartphone
Gamers
9%
9%
Smartphone
Gamers
Tablet Gamers
Base: Smartphone Gamers N=1027; Tablet Gamers N=1009. Sc.B: What is your gender? Sc.C: How old are you? Sc.D: Who lives with you in your household? Please select all that
apply. Sc.H: Which of the following best describes your racial background? Cl.D: What was the last grade or level of school you completed? Cl.E: What is your approximate annual
household income before taxes? This includes the combined salary of all household members who work, income from pension, Social Security, etc. Cl.F: What is your marital status?
29
MOBILE PAYERS
30
Virtual Good Spending, Tablet Vs. Smartphone
Tablet and smartphone virtual goods market
(Among regular gamers on each device)
2014
2015
2016
2014
2015
2016
51%
43%
33%
32%
39%
19%
Tablet
Smartphone
MMF Base: Those who own/use a tablet and play games regularly 2016 N=1009; Q7.21 Have you ever bought digital or virtual goods in games on your tablet? Base: Those who own
a smartphone and play games regularly 2016 N=1027; Q184 Have you ever bought digital or virtual goods in games on your smartphone?
31
Virtual Good Spending, Mobile
Mobile virtual goods market ($mm)
2015
2016
$5.645B
$4.586B
Mobile
$80
Is the average digital/virtual good
smartphone spend among those who
buy in the past 12 months
$70
Is the average digital/virtual good
tablet spend among those who buy in
the past 12 months
MMF Base: Those who own/use a tablet and play games regularly 2016 N=1009; Q7.21 Have you ever bought digital or virtual goods in games on your tablet? Q7.22 About how much did you spend in total
on digital or virtual goods in games on your tablet in the last 12 months? N=481. Base: Those who own a smartphone and play games regularly 2016 N=1027; Q184 Have you ever bought digital or virtual
goods in games on your smartphone? Base: Those who bought digital or virtual goods on their smartphones, N=375; Q185 About how much did you spend in total on digital or virtual goods in games on your
smartphone in the last 12 months
32
ESPORTS
33
Over 40% Have Heard Of Esports; Viewership On The
Rise, Reaching 26% This Year
Have you ever heard of esports?
Esports is also known as competitive gaming or professional gaming.
7%
Yes
No
Not sure
41%
53%
Those that have watched an
esports event or programming:
2016: 26%
2015: 18%
2014: 12%
2013: 9%
Base: Total N=2400. Q123: Have you ever heard of esports? Esports is also known as competitive gaming or professional gaming. Q123.2: Do you ever watch esports, full matches
or clips, in the following ways? Select all that apply.
34
Those Aware Of Esports Skew Male, 18-44, And Having
Children In HH
50%
Male
Female
8-11
12-17
18-24
35%
7%
5%
65%
13%
17%
25-34
18%
26%
35-44
17%
20%
45-54
18%
12%
55-64
17%
8%
Heard of
Esports
White
62%
64%
Hispanic
17%
17%
Black
13%
12%
College Graduate or
Higher Degree
51%
55%
Married
50%
54%
Child(ren) in
Household
(asked of adults only)
47%
56%
Income > $75K
39%
43%
50%
Total
10%
12%
Total
Heard of Esports
Base: Total N=2400; Heard of Esports, N=972. Sc.B: What is your gender? Sc.C: How old are you? Sc.D: Who lives with you in your household? Please select all that apply. Sc.H:
Which of the following best describes your racial background? Cl.D: What was the last grade or level of school you completed? Cl.E: What is your approximate annual household
income before taxes? This includes the combined salary of all household members who work, income from pension, Social Security, etc. Cl.F: What is your marital status?
35
Esports Viewers Skew Male, 25-44, Having Children In
HH, And Higher Income
Male
50%
Female
50%
8-11
12-17
28%
7%
5%
10%
13%
13%
14%
18-24
25-34
18%
35-44
17%
25%
45-54
18%
55-64
33%
7%
4%
17%
72%
Total
Esports Viewers
White
62%
65%
Total
Hispanic
17%
17%
Esports Viewers
Black
13%
12%
College Graduate or
Higher Degree
51%
65%
Married
50%
65%
Child(ren) in
Household
(asked of adults only)
47%
68%
Income > $75K
39%
56%
Base: Total N=2400; Esports Viewers N=621. Sc.B: What is your gender? Sc.C: How old are you? Sc.D: Who lives with you in your household? Please select all that apply. Sc.H:
Which of the following best describes your racial background? Cl.D: What was the last grade or level of school you completed? Cl.E: What is your approximate annual household
income before taxes? This includes the combined salary of all household members who work, income from pension, Social Security, etc. Cl.F: What is your marital status?
36
Majority Of Those Aware Of Esports Have Watched It;
Streaming Online Is Top Format
Do you ever watch esports, full matches or clips, in the following ways?
(Among those that have heard of esports)
Streaming online through an internet site or app
which is not from a publisher (e.g. Twitch.tv)
34%
On a TV channel provided by a paid television
service (e.g. ESPN, TNT, etc.)
Streaming online through an internet site or app
from a publisher (e.g. LoLEsports.com)
Streaming within the app/game itself
No, I never watch esports
64% of
those
aware
watch
esports
28%
Live, in person
21%
19%
18%
36%
Base: Among those that have heard of esports before N=972. Q123.2: Do you ever watch esports, full matches or clips, in the following ways? Select all that apply.
37
Considering Overall Content Consumption, YouTube
Dominates Esports Video Content
Which of the following websites/apps have you used to watch Esports?
(Among those that watch Esports content)
YouTube
74%
Twitch
34%
Major League Gaming (MLG)
23%
Dailymotion
23%
Ustream
22%
ESL Gaming
22%
LoLesports
18%
Hitbox.tv
GosuGamers
Azubu.tv
Note: “Content” can
include live streams,
recaps, highlights, etc.
17%
13%
13%
Base: Among those that watch esports content – Total N=621. Q123.6: Which of the following websites/apps have you used to watch esports? Select all that apply.
38
VIRTUAL REALITY
39
VR’s Potential For Success Is High, Nearly A Quarter
Showing Strong Interest
Interest in a virtual reality experience
23%
19%
22%
13%
24%
Very interested-5
4
3
2
Not at all
interested-1
Total
Base: Total N=2400. Q152: How interested are you in virtual reality?
40
Samsung and PlayStation Lead VR Device Awareness
Which of the following virtual reality products have you heard of?
Samsung VR Gear
34%
PlayStation VR
31%
Oculus Rift
27%
Google Cardboard
21%
Microsoft HoloLens
17%
Valve/HTC Vive
10%
Razer OSVR
MergeVR
8%
5%
None of the above
Base: Total N=2400. Q151.1: Which of the following virtual reality products have you heard of? Select all that apply.
38%
41
Various Brands Have The Potential To Succeed In The VR
Space
If you were to buy a virtual reality viewing device, which of the following brands would you prefer it
come from?
(Among those that are at least somewhat interested in VR, select up to two)
Microsoft
40%
Sony
37%
Apple
35%
GoPro
Nikon
None of the above
24%
9%
10%
Base: Among those that are at least somewhat interested in a VR experience N=1531. Q152.2: If you were to buy a virtual reality viewing device, which of the following brands would
you prefer it come from? Select up to two of the following.
42
Other Than GoPro, The Big Consumer Electronic Brands
Will Be The Winners With 360 Cameras
If you were to buy a virtual reality capture device (360 camera), which of the following brands would
you prefer it come from?
(Among those that are at least somewhat interested in VR, select up to two)
GoPro
36%
Sony
31%
Microsoft
27%
Apple
25%
Nikon
21%
Xiaomi
3%
DJI
2%
Drift
2%
None of the above
11%
Base: Among those that are at least somewhat interested in a VR experience N=1531. Q152.3: If you were to buy a virtual reality capture device (360 camera), which of the
following brands would you prefer it come from? Select up to two of the following.
43
Traditional Media, Games, and Virtual Travel Lead
Primary Use Cases For VR
What kind of content would you be interested in experiencing through virtual reality?
(Among those that are at least somewhat interested in VR)
Movies
49%
Console/PC games
38%
Virtual Travel
35%
TV Shows
33%
Music videos
32%
Sports
Smartphone/tablet
games
Live Events
31%
28%
27%
Base: Among those that are at least somewhat interested in a VR experience N=1531. Q153: What kind of content would you be interested in experiencing through virtual reality?
Select all that apply.
44
Secondary VR Use Cases
What kind of content would you be interested in experiencing through virtual reality?
(Among those that are at least somewhat interested in VR)
Social Networking
24%
Video calls
23%
Vehicular / Adventure
Simulations
Live / recorded video
games
21%
20%
Board games
18%
News
17%
Short-form video clips
15%
Esports
15%
Training for jobs and other
activities
Event Replays
15%
11%
Base: Among those that are at least somewhat interested in a VR experience N=1531. Q153: What kind of content would you be interested in experiencing through virtual reality?
Select all that apply.
45
Thank You For Your Attention
Contact Us!
Mike Vorhaus
President, Magid Advisors
818-231-9110
[email protected]
Paul Silverman
Director of Research
212-515-4490
[email protected]
Andrew Hare
Director, Research and Strategy
212-515-4538
[email protected]
Thomas Schankler
Analyst
212-515-4526
[email protected]
46