August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 1

August Trends Tracker Summary of Findings

• Fitbit Inc. (FIT) will continue to dominate Apple Inc.’s (AAPL) Apple Watch. Five times as many respondents had

purchased a Fitbit fitness band as those who had purchased an Apple watch. Twice as many respondents are likely

to purchase a Fitbit than an Apple Watch in the next three months. More specifically, 50% more respondents are

very or extremely likely to make a Fitbit purchase rather than an Apple Watch in that time frame.

• Skechers USA Inc. (SKX) continues to grow. It now is the third most popular performance/athletic shoe brand

among respondents, overtaking Adidas AG (ADDYY). Twice as many 18- to 29-year-olds as in Blueshift’s July Trends

Tracker plan to buy Skechers in the next six months. Also, Under Armour Inc. (UA) is gaining traction; 50% more

respondents are likely to purchase its shoes during the next six months, the biggest jump of any brand in our

survey.

• McDonald’s Corp.’s (MCD) struggles continue as it is losing customers younger than 44. It also was viewed as on

par with or worse than other fast-food/quick-serve restaurants. A quarter of our respondents do not eat at

McDonald’s at all. Chipotle Mexican Grill Inc. (CMG), Restaurant Brands International’s (TSE:QSR) Burger King, and

Wendy’s Co. (WEN) have gained the most millennial traffic since July.

• Facebook Inc. (FB) is ahead of all other social media platforms in having its ads lead to a purchase. Respondents

have made an ad-related purchase through Facebook at a 5-to-1 ratio compared with its nearest competitor,

Pinterest. Overall, purchases through social media platforms have increased in frequency and dollar amounts, with

purchases of $100 or more doubling compared with six months ago.

• More respondents now use Spotify’s premium service over Pandora’s premium offering, a change from six months

ago, and Pandora is losing ground with 18- to 29-year-olds.

• Of all forms of video gaming, use of consoles has increased the most compared with last year, showing the effects

of Microsoft Corp.’s (MSFT) and Sony Corp.’s (TYO:6758) next-generation systems. Eight out of 10 console gamers

favor physical discs to digital downloads, potentially limiting damage to GameStop Corp. (GME). However,

smartphones now are the No. 1 way respondents play video games.

• Michael Kors Holdings Ltd. (KORS) and Kate Spade & Co. (KATE) are gaining traction in the handbag market,

especially among millennials. They have cut into Coach Inc.’s (COH) lead, which is driven by older respondents.

Introduction

Welcome to Blueshift Research’s 14th edition of the Trends Tracker. This monthly research survey tracks the most

pressing topics affecting U.S. consumers as well as business and investment theses. We monitor trends to see how

respondents’ opinions evolve and frequently update survey questions with new issues that emerge from our research

and observations.

The August Trends Tracker comprises 1,107 respondents who represent a general sample of the U.S. public and who

answered questions on Aug. 13 and 14. Blueshift utilized SurveyMonkey’s Census data to balance respondents by

gender and age so that the sample aligns with the U.S. population.

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 2

Location of Topics

Wearable tech/Fitbit/Apple Watch (Page 2)

Performance/athletic shoes (Page 6)

Fast-food/quick-serve restaurants (Page 8)

Social media ads (Page 12)

Streaming music services (Page 14)

Gaming (Page 18)

$200 to $700 handbag market (Page 20)

Rental car alternatives (Page 23)

Pay-TV/OTT/cord cutting (Page 24)

Personal account hacks/national cybersecurity (Page 29)

Residential solar adoption (Page 32)

Tobacco/e-cigarettes (Page 33)

Legalization of marijuana (Page 35)

Vaccinating children (Page 38)

Companies Covered

AAPL, ADDYY, AMZN, BBRY, CAR, CHTR, COH, CMG, CSIQ, DIS, DISH, DTV, FB, FIT, FSLR, GME, GOOG/GOOGL, HTZ,

IHRT, KATE, KORS, MCD, MO, MSFT, NFLX, NKE, P, PNRA, SKX, SUNE, TSE:QSR, TWC, TWTR, TWX, TYO:6758,

TYO:7936, TYO:7974, UA, VIA/VIAB, WEN, WRC

Topics

1) Respondents were five times more likely to purchase a Fitbit than an Apple Watch. Overall

wearable technology adoption has increased compared with last year.

Wearable technology adoption has increased 3.5 percentage points year to year in all age groups, led by 30- to 44-year-

olds. Five times the number of respondents bought a Fitbit fitness band compared with those who bought an Apple

Watch. Fitbit will continue to dominate Apple Watch sales, as twice as many respondents are likely to make a Fitbit

purchase than an Apple Watch. 3.7% of respondents are very or extremely likely to buy a Fitbit in the next three months,

compared with 2.2% of respondents who are very or extremely likely to buy an Apple Watch. Fitbit has been benefiting

from the wellness trends as well as its multiple price tiers. However, the company faces even more competition. Sony

announced its Smartband 2, which will be available in September for $130 and with all the same features as the Fitbit

Charge HR. Also in September, Misfit and Warnaco Group’s (WRC) Speedo will launch the Speedo Shine fitness tracker

for $79.99, which sets itself apart by being able to track swimmers’ strokes. To become more widely available to

consumers, Apple has expanded its distribution of the Apple Watch to Best Buy on Aug. 7.

How likely are you to adopt wearable technology in the next three months?

• 8% already have adopted wearable technology, a 3.5 percentage-point increase compared with a year ago.

o All age groups, led by 30- to 44-year-olds, have increased their wearable technology adoption.

• 33.8% are likely to adopt wearable technology in the next three months, a 0.9 percentage-point increase year to

year.

o 30- to 44-year-olds are the most likely to adopt wearable technology, followed by 18- to 29-year-olds; 30-

to 60-year-olds reported a greater likelihood while 18- to 29-year-olds and those above the age of 60

reported a lower likelihood year to year.

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 3

How likely are you to buy an Apple Watch in the next three months?

• 85.7% are not at all likely to buy an Apple Watch in the next three months.

• 1.3% have bought an Apple Watch.

o 18- to 29-year-olds and/or those with higher household incomes are the most likely to have an Apple

Watch.

• 2.2% are very or extremely likely to buy an Apple Watch in the next three months.

o Younger respondents and/or those with low-income households are the most very or extremely likely to

adopt an Apple Watch in the next three months.

62.6%

18.0%

7.0%5.0%

2.9% 4.5%

58.2%

19.1%

8.6%

3.5% 2.6%

8.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Not at all likely Slightly likely Moderatelylikely

Very likely Extremely likely I already have

August '14 August '15

48.7%

50.0%

43.1%

27.5%

51.6%

42.4%

28.8%

30.2%

18-29

30-44

45-60

60+

Age: Likely to adopt wearable tech

August '14 August '15

8.1%

10.4%

8.0%

6.1%

4.2%

5.7%

3.9%

4.2%

18-29

30-44

45-60

60+

Age: Have adopted wearable tech

August '14 August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 4

How likely are you to buy a Fitbit in the next three months?

85.7%

8.4%2.3% 0.9% 1.3% 1.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Not at all likely Slightly likely Moderately likely Very likely Extremely likely I already have anApple Watch

August '15

2.3%

1.2%

0.7%

1.2%

18-29

30-44

45-60

60+

Age: Already have an Apple Watch

August '15

3.6%

3.5%

1.0%

1.0%

18-29

30-44

45-60

60+

Age: Very/extremely likely to buy an Apple Watch

August '15

0.7%

0.6%

1.3%

1.2%

2.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Already have an Apple Watch

July

5.9%

1.3%

1.0%

2.4%

0.00%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Very/extremely likely to buy an Apple Watch

August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 5

• 65.2% are not at all likely to buy a Fitbit in the next three months.

• 6.6% of respondents have bought a Fitbit.

o Respondents older than 45 and/or with higher-income households are the most likely to already have

purchased a Fitbit.

• 3.7% are very or extremely likely to buy a Fitbit in the next three months.

o 30- to 44-year-olds, followed by 18- to 29-year-olds, and/or those with household income of $100,000 to

$149,999 are the most very or extremely likely to purchase a Fitbit in the next three months.

65.2%

17.7%

6.7%2.5% 1.2%

6.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Not at all likely Slightly likely Moderately likely Very likely Extremely likely I already have a Fitbit

August '15

5.9%

5.8%

8.0%

6.9%

18-29

30-44

45-60

60+

Age: I already have a Fitbit

August '15

4.1%

5.8%

3.8%

1.1%

18-29

30-44

45-60

60+

Age: Very/extremely likely to buy a Fitbit

August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 6

2) Skechers takes third spot from Adidas for top performance/athletic shoes.

The top performance/athletic shoe brands that respondents plan to buy in the next six months are Nike Inc. (NKE), New

Balance, Skechers, Adidas and Asics Corp. (TYO:7936). Skechers took third place from Adidas, with all age groups

except those 30 to 44 moving the brand up in importance. The drop among 30- to 44-year-olds could be a warning sign

for Skechers. Under Armour is coming on strong; 50% more respondents now are more likely than a month ago to

purchase Under Armour shoes in the next six months.

Blueshift’s May 20 report forecast strong growth for Skechers throughout 2015. The NPD Group also found that

Skechers was becoming more popular and was overtaking Adidas as the No. 2 shoe brand overall, not just in the

performance/athletic market. NPD Group related Skechers’ success to its GOwalk “athleisure” walking shoe and its

price tags. In addition, Skechers has added Demi Lovato, Brooke Burke-Charvet, Mariano Rivera and Ringo Starr as

brand endorsers. Adidas is try to gain some star power as well and has signed NBA player James Harden to a $200

million shoe deal. Under Armour and Nike are fighting for younger consumers with special events.

Which performance/athletic shoe brand do you plan to buy in the next six months? Select all that

apply.

• 25.9% plan to buy Nike shoes in the next six months, a 3.7 percentage-point increase compared with in July.

o The three age groups that comprise 18- to 60-year-olds are more likely to buy Nike shoes than they were in

July. The likelihood increased most among 45- to 60-year-olds.

• 18.7% plan to buy New Balance shoes in the next six months, a 3.3 percentage-point increase.

o All age groups are more likely to buy New Balance shoes compared with last month. The likelihood

increased most among 30- to 44-year-olds.

• 9.3% plan to buy Skechers shoes in the next six months, a 1.5 percentage-point increase compared with July.

o All age groups except 30- to 44-year-olds are more likely to buy Skechers shoes than in July. The likelihood

increased most among respondents over the age of 60, followed by 18- to 29-year-olds.

0.7%

3.9%

6.7%

10.9%

10.2%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: I already have a Fitbit

August '15

4.4%

2.6%

4.2%

6.5%

4.1%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Very/extremely likelyto buy a Fitbit

August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 7

• 8.9% plan to buy Adidas shoes in the next six months, a 0.6 percentage-point decrease compared with last month.

o 18- to 29-year-olds and 45- to 60-year-olds are more likely to buy Adidas shoes than they were in July. 30-

to 44-year-olds are the most likely to purchase Adidas shoes while those older than 60 are the least likely.

• 7.8% plan to buy Asics shoes in the next six months, a 0.5 percentage-point increase compared with last month.

• 4.5% plan to buy Under Armour shoes in the next six months, a 1.5 percentage-point increase.

o All age groups except 30- to 44-year-olds are more likely to purchase Under Armour shoes compared with a

month ago; 30- to 44-year-olds have the same likelihood as last month. The likelihood increased most

among 45- to 60-year-olds.

22

.2%

15

.4%

7.8

%

9.5

%

7.3

%

5.5

%

5.1

%

3.1

%

3.0

%

4.6

%

2.2

%

3.2

%

1.5

%

1.8

%

0.0

% 5.7

%

39

.1%

25

.9%

18

.7%

9.3

%

8.9

%

7.8

%

6.9

%

5.3

%

4.6

%

4.5

%

3.7

%

3.4

%

2.9

%

1.5

%

1.4

%

0.4

% 5.5

%

35

.1%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%

July August

37.8%

29.2%

27.1%

9.9%

36.8%

28.1%

16.4%

10.0%

18-29

30-44

45-60

60+

Age: Nike

July August

9.0%

17.3%

22.9%

22.9%

5.9%

13.9%

20.8%

20.5%

18-29

30-44

45-60

60+

Age: New Balance

July August

13.1%

13.9%

6.9%

1.5%

12.7%

14.2%

5.8%

6.2%

18-29

30-44

45-60

60+

Age: Adidas

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 8

3) McDonald’s remains the top fast-food/quick-serve restaurant, but still is losing younger

consumers, specifically millennials.

Respondents have increased the number of fast-food/quick-serve restaurants they have eaten at in the past month,

with McDonald’s continuing to lead the pack. Millennials have eaten at McDonald’s less often than in July, and are

more likely to think McDonalds’s is worse than most other fast-food/quick-serve restaurants. 30- to 44-year-olds still

eat at the most fast-food/quick-serve restaurants. 18- to 29-year-olds remain the primary age group to eat at Chipotle

and have increased their frequency to this chain by 5.6 percentage points compared with last month. Burger King and

Wendy’s are making strides ahead of McDonald’s, which mirrors Blueshift’s July 15 report.

We added a new question to see how McDonald’s compared with other fast-food/quick-serve restaurants and found

that a quarter of our respondents do not eat at McDonald’s. Roughly 45% find McDonald’s on par with other fast-

food/quick-serve restaurants, 19% find McDonald’s to be worse than other fast-food/quick-serve restaurants, while

13.2%—the smallest group—find McDonald’s to be better than other fast-food/quick-serve restaurants.

McDonald’s has been testing all-day breakfasts in various markets and believes the entire rollout could increase sales

by 2.5%. Meanwhile, the Cleveland Clinic’s cafeteria is not renewing its contract with McDonald’s. Also, McDonald’s is

out of touch with millennials and issued an apology for its recent ad campaign. Chipotle continues to gain traction with

millennials, not only through its healthier, non-GMO foods but also through sponsoring its second annual free music

and food fest. Panera Bread Co. (PNRA) is seeing gains from its Panera 2.0 rollout, as discussed in Blueshift’s April 2

report.

Which fast-food/quick-serve restaurants have you eaten at in the past month? Select all that apply.

• 42% have eaten at McDonald’s in the past month, a 2.5 percentage-point increase compared with July.

o Respondents under the age of 44 have eaten at McDonald’s less often than in July, while older

respondents have eaten at McDonalds’s more often than a month ago.

5.4%

8.5%

10.4%

11.8%

2.7%

10.4%

9.1%

8.5%

18-29

30-44

45-60

60+

Age: Skechers

July August

5.4%

5.0%

5.6%

2.3%

4.1%

5.0%

2.2%

0.4%

18-29

30-44

45-60

60+

Age: Under Armour

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 9

• 32.4% have eaten at Doctor’s Associates Inc.’s Subway in the past month, a 1.8 percentage-point increase.

o Respondents over the age of 29, led by 45- to 60-year-olds, have eaten at Subway more often than in July.

• 25.6% have eaten at Taco Bell in the past month, a 1.6 percentage-point increase compared with July.

o All age groups except 30- to 44-year-olds have eaten at Taco Bell more often than in July, but still were led

by 30- to 44-year-olds.

• 23.6% have eaten at Wendy’s in the past month, a 3.4 percentage-point increase compared with July.

o All age groups, led by 18- to 29-year-olds, have eaten at Wendy’s more compared with July.

• 22.4% have eaten at Burger King in the past month, a 4.3 percentage-point increase compared with July.

o All age groups, led by 30- to 44-year-olds, have eaten at Burger King more often than in July.

• 18.3% have eaten at Chipotle in the past month, a 0.9 percentage-point increase compared with July.

o All age groups except 45- to 60-year-olds and led by 18- to 29-year-olds have eaten at Chipotle more often

than in July.

o 31.5% of 18- to 29-year-olds have eaten at Chipotle, a 5.6 percentage-point increase compared with July.

• 17.4% have eaten at Panera in the past month, a 0.3 percentage-point increase compared with July.

o All age groups except 30- to 44-year-olds and led by respondents over the age of 60 have eaten at Panera

more often than in July.

• 14.4% have not eaten at any fast-food/quick-serve restaurants in the past month, a 0.8 percentage-point decrease

compared with July.

• All age groups have increased their average number of visits to fast-food/quick-serve restaurants in the past

month; 30- to 44-year-olds remain the primary age group to eat at fast-food/quick-serve restaurants.

39

.5%

30

.6%

24

.0%

20

.2%

18

.1%

14

.9%

17

.4%

17

.1%

10

.1%

11

.5%

13

.5%

12

.7%

12

.3%

9.2

%

8.8

%

6.7

%

7.3

%

9.8

%

6.9

%

5.7

%

7.8

%

3.9

%

1.7

%

3.3

%

2.2

%

10

.8%

15

.2%

42

.0%

32

.4%

25

.6%

23

.6%

22

.4%

19

.9%

18

.3%

17

.4%

16

.5%

16

.4%

13

.8%

13

.4%

13

.1%

10

.4%

9.9

%

8.1

%

7.9

%

7.7

%

7.7

%

7.2

%

6.7

%

3.3

%

2.5

%

2.0

%

1.9

% 9.3

% 14

.4%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 10

41.0%

43.9%

44.1%

37.8%

44.6%

46.2%

37.6%

29.7%

18-29

30-44

45-60

60+

Age: McDonald's

July August

21.6%

25.8%

20.1%

21.8%

16.8%

19.6%

18.6%

15.4%

18-29

30-44

45-60

60+

Age: Burger King

July August

26.6%

26.2%

25.4%

16.0%

25.0%

23.5%

20.4%

13.1%

18-29

30-44

45-60

60+

Age: Wendy's

July August

31.5%

18.9%

14.9%

9.9%

25.9%

18.5%

17.2%

8.5%

18-29

30-44

45-60

60+

Age: Chipotle

July August

29.7%

33.5%

34.4%

29.0%

38.6%

31.5%

31.0%

22.4%

18-29

30-44

45-60

60+

Age: Subway

July August

15.3%

14.2%

18.1%

22.1%

15.0%

18.5%

13.5%

20.9%

18-29

30-44

45-60

60+

Age: Panera

July August

26.6%

31.5%

27.1%

17.6%

25.9%

31.9%

24.8%

14.3%

18-29

30-44

45-60

60+

Age:Taco Bell

July August

12.2%

15.8%

10.4%

19.9%

11.4%

8.9%

15.7%

24.7%

18-29

30-44

45-60

60+

Age: None

July August

3.97

4.04

3.78

3.13

3.69

3.85

3.24

2.31

18-29

30-44

45-60

60+

Age: Average number of fast-food chains in past month

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 11

How does McDonald’s compare to all other fast-food/quick-serve restaurants?

• 43.4% find McDonald’s to be on par with other fast-food/quick-serve restaurants.

• 19% find McDonald’s to be worse than others or to be the worst fast-food/quick-serve restaurant.

o Younger respondents, specifically 18- to 29-year-olds, are the most likely to find McDonald’s worse than

other fast-food/quick-serve restaurants.

• 13.2% consider McDonald’s to better than others or to be the best fast-food/quick-serve restaurant.

o 45- to 60-year-olds are the most likely to find McDonald’s better than others.

• 24.4% do not eat at McDonald’s.

o Respondents over the age of 60 or 18- to 29-year-olds are the most likely to not eat at McDonald’s.

o Those with household incomes of $100,000 to $149,999 are the most likely to not eat at McDonald’s.

24.4%

4.7%

14.3%

43.4%

10.1%

3.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 12

.

4) Facebook’s advertisements continue to dominate purchases made through social media.

Purchases through social media ads overall have grown compared with six months ago, and Facebook continues to

dominate all other social media platforms in having its ads lead to purchases. 30- to 44-year-olds have overtaken

millennials and now are the most likely to purchase a product through a social media ad. Respondents are making ad-

related purchases through Facebook at a 5-to-1 ratio compared with its nearest competitor, Pinterest. Forrester

Research reported that Facebook’s ads perform better than other social networks’, which dovetails with our findings.

Our respondents’ purchases through Twitter Inc. (TWTR) have increased compared with six months ago while

Facebook’s Instagram saw a slight slip. Overall, dollar amounts for purchases through social media ads have increased;

the most common amount remains below $40, but we noted a jump in respondents paying $100 or more per

purchase.

Twitter may garner some more attention as it now allows advertisers to share promoted tweets or videos to the 700

million-strong MoPub network—more than twice the size of Twitter—which pushes these promoted items to apps that

10.8%

10.8%

17.0%

13.4%

18-29

30-44

45-60

60+

Age: Better

August

26.6%

23.5%

17.7%

9.6%

18-29

30-44

45-60

60+

Age: Worse

August

27.0%

26.5%

16.3%

28.6%

18-29

30-44

45-60

60+

Age: I don't eat at McDonald's

August

19.9%

23.1%

24.7%

27.3%

21.4%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: I don't eat at McDonald's

August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 13

include Candy Crush and Slack video. Instagram also may start to see ad gains as Facebook opened up Instagram’s ad

API to third parties. Facebook did the same thing to its own platform in 2011, in turn boosting its advertising four-fold

during the past four years.

Have you bought any products through a social media ad?

• 13.8% have bought a product through a social media ad, a 1.2 percentage-point increase compared with February.

o 30- to 44-year-olds are now the most likely to buy a product through a social media ad. All age groups

except 18- to 29-year-olds have increased their purchases through social media ads since February.

o All income levels are buying more products through social media ads compared with six months ago.

• 9.1% have bought a product through a Facebook ad, a 1 percentage-point increase compared with six months ago.

• 1.8% have bought a product through a Pinterest ad, a 0.1 percentage-point decrease compared with six months

ago.

• 1.1% have bought a product through an Instagram ad, a 0.2 percentage-point decrease.

• 0.9% have bought a product through a Twitter ad, a 0.3 percentage-point increase compared with six months ago.

8.1%1.9% 1.3% 0.6% 0.5% 0.2%

76.1%

11.4%9.1%

1.8% 1.1% 0.9% 0.1% 0.8%

74.6%

11.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Yes, throughFacebook

Yes, throughPinterest

Yes, throughInstagram

Yes, throughTwitter

Yes, throughTumblr

Yes, other No I do not usesocial media

February August

13.5%

18.1%

14.2%

9.5%

15.4%

13.8%

12.4%

8.0%

18-29

30-44

45-60

60+

Age: Have bought products through social media ads

February August

13.2%

18.0%

12.8%

14.6%

17.3%

11.9%

14.8%

11.8%

13.9%

15.2%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Have bought products through social media ads

February August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 14

How much did you spend on the product you bought through the social media ad?

• 63.7% spent $40 or less on a product bought through a social media ad, 0.6 percentage-point increase compared

with six months ago.

• 12.3% spent $100 or more on a product brought through a social media ad, a 6.5 percentage point (and more

than 100%) increase compared with six months ago.

5) More respondents now use Spotify’s premium service rather than Pandora’s premium offering.

Pandora Media Inc.’s (P) free service remains the most used streaming music option compared with six months ago.

However, use of Pandora’s free and subscription services has slowed among 18- to 29-year-olds. Also, more

respondents reported using Spotify’s premium service than Pandora’s premium offering. Spotify premium experienced

53% growth over the last six months while Pandora premium posted a 26% increase. Use of both Spotify’s free service

and premium offerings has increased compared with six months ago in all age groups, specifically 18- to 29-year-olds.

iHeartMedia Inc.’s (IHRT) iHeartRadio posted the most growth compared with six months ago, thanks to use among

respondents under the age of 61. Apple Music, which currently is being offered as a free trial, has become more

popular among respondents under the age of 61, particularly those 18 to 29 years old; this may be due to family plan

sign-ups. 18- to 29-year-olds are using Spotify, iHeartRadio and Apple Music more than in February, but have

decreased their use of Pandora.

Our respondents favor radio-style streaming to whole albums or specific songs, and have increased their use of such

streaming compared with six months ago, which benefits Pandora and iHeartRadio. 18- to 29-year-olds are still the top

age group for streaming whole albums or specific songs, which benefits Spotify. Pandora recently beat second-quarter

earnings. Apple Music’s success in this industry is still in question as the service just came online two months ago and

remains a free service for another month. A recent MarketWatch survey suggests that 48% of Apple Music trial users

have left, while Apple has stated that 79% of consumers who have signed up for the service still are using it.

29.0%

34.1%

21.0%

5.8%4.3%

5.8%

32.2% 31.5%

14.4%

5.5%4.1%

12.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

$0 - $20 $21 - $40 $41 - $60 $61 - $80 $81 - $100 $100+

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 15

MarketWatch also reported that 61% of Apple Music users already have turned off the auto-renewal option, but 64% of

current users said they are very likely or extremely likely to subscribe.

What streaming music services do you use?

• 39.7% use Pandora’s free service, a 3.5 percentage-point increase compared with six months ago.

o 18- to 29-year-olds are the only age group to decrease their use of Pandora’s free service, but still are the

leading user group of this option.

• 4.3% use Pandora One premium, a 0.9 percentage-point increase compared with six months ago.

o 30- to 44-year-olds are the most likely to use Pandora One premium, a shift from six months ago when 18-

to 29-year-olds were the primary user group of the service.

• 15.3% use Spotify’s free service, a 1.8 percentage-point increase compared with six months ago.

o Respondents under the age of 61 are increasing their use of Spotify’s free service. 18- to 29-year-olds are

the primary users of the service and posted an increase compared with February.

• 4.6% use Spotify premium, a 1.6 percentage-point increase compared with six months ago.

o All age groups have increased their use of Spotify premium; 18- to 29-year-olds remain the primary users.

• 13.2% use iHeartRadio, a 4.3 percentage-point increase compared with six months ago.

o Respondents younger than 61 are increasing their use of iHeartRadio; 30- to 60-year-olds are primary

users.

• 9.3% use iTunes Radio for free, a 2.3 percentage-point decrease compared with six months ago.

o All age groups except 30- to 44-year-olds are decreasing their use of iTunes Radio.

• 9.3% use Apple Music (free trial, then $9.99 a month for a single user and $14.99 for a family plan), a 0.4

percentage-point increase compared with last month.

o All age groups except those over the age of 60 are increasing their use of Apple Music; 18- to 29-year-olds

are the primary users.

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 16

36

.2%

25

.9%

13

.5%

8.9

%

5.4

%

11

.6%

8.9

%

3.0

%

3.4

%

2.5

%

1.5

%

2.0

%

1.6

%

1.2

%

1.1

%

8.4

%

32

.8%

39

.7%

36

.1%

15

.3%

13

.2%

10

.8%

9.3

%

9.3

%

4.6

%

4.3

%

3.1

%

2.0

%

1.8

%

1.2

%

1.2

%

1.0

%

8.2

%

28

.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

February Aug-15

51.4%

47.7%

38.2%

22.9%

53.6%

37.6%

36.7%

20.2%

18-29

30-44

45-60

60+

Age: Pandora (free)

February August

4.1%

5.4%

4.9%

3.1%

5.5%

2.7%

3.2%

2.7%

18-29

30-44

45-60

60+

Age: Pandora One

February August

14.4%

16.2%

16.0%

6.1%

9.5%

8.6%

11.3%

6.5%

18-29

30-44

45-60

60+

Age: iHeartRadio

February August

July

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 17

How do you primarily consume streaming music?

• 60.4% primarily consume radio-style streaming music, a 2.9 percentage-point increase quarter to quarter.

• 45- to 60-year-olds are the only age group to listen to more whole albums or specific songs via streaming quarter to

quarter, but 18- to 29-year-olds remain the most likely to prefer this type of streaming music.

26.1%

21.5%

11.8%

5.3%

25.5%

14.5%

10.6%

5.7%

18-29

30-44

45-60

60+

Age: Spotify (free)

February August

10.4%

5.4%

2.1%

1.9%

8.2%

2.7%

1.4%

0.8%

18-29

30-44

45-60

60+

Age: Spotify Premium

February August

9.5%

10.4%

9.7%

7.6%

13.2%

9.8%

15.2%

8.4%

18-29

30-44

45-60

60+

Age: iTunes Radio (free)

February August

16.2%

9.2%

8.3%

3.8%

12.3%

8.5%

8.0%

7.0%

18-29

30-44

45-60

60+

Age: Apple Music

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 18

6) Smartphone use is now the most popular way consumers play video games. Console gaming

posted the most gains compared with last year, driven by next-gen systems.

Smartphone use is now the No. 1 way respondents play most of their video games. The U.S. smartphone gaming

industry is projected to grow 16.5% to more than $3 billion this year, according to eMarketer. Smartphone and console

gaming grew year to year while computer gaming has declined among our respondents.

Console gaming grew across all age groups and all income levels except $100,000 to $149,999, while smartphone

gaming grew among those 18 to 29 or 45 to 60 years old and/or household incomes below $24,999 or above

$100,000. Overall, respondents prefer digital downloads to physical disc purchases, but among console gamers only,

roughly 80% prefer physical discs to digital downloads. The increase in console gaming can be related to purchases of

Microsoft’s Xbox One and Sony’s PS4, which sold 1.4 and 3 million consoles, respectively, up 10% and 0.3 million sales

year to year. PS4 sales led all console sales for July, making it the third consecutive month for highest U.S. sales. Such

developments bode well for GameStop, for which analysts are awaiting earnings on Aug. 27. A recent patent filed by

Nintendo Co. Ltd. (TYO:7974) suggests that its new platform, NX, may not have a disk drive.

How do you play most of your video games?

• 14.8% play most video games through a console, a 3.1 percentage-point increase compared with a year ago.

o All age groups, still led by 18- to 29-year-olds, increased their use of consoles year to year.

o Households with incomes of $100,000 to $149,999 reported a decrease in console use, while lower-

income households remained the most likely to use consoles for gaming.

• 15.9% play most video games through a smartphone, a 1.8 percentage-point increase.

o Smartphone gaming rose among those ages 18 to 29 and 45 to 60, but still is led by those ages 30 to 44.

o Smartphone gaming is up for low-income and high-income households alike. Those with household

incomes of $0 to $24,999 saw the greatest year-to-year increase in smartphone gaming.

42.5%

57.5%

39.6%

60.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Whole album or specific songs (on demand) Radio-style (where songs are selected for you)

May August

42.4%

35.6%

41.2%

38.2%

51.3%

36.9%

35.2%

47.1%

18-29

30-44

45-60

60+

Age: Whole album or specific songs

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 19

• 15.7% play most video games through a computer, a 0.3 percentage-point decrease compared with a year ago.

• 9.1% play most video games through a tablet, a 0.1 percentage-point increase.

o Tablet gaming grew among those 45 and older and declined among those younger than 45 year to year.

14.1%16.0%

11.7%9.0%

1.1%

48.0%

15.9% 15.7% 14.8%

9.1%

0.8%

43.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Smartphone Computer Console Tablet Handheld console I do not play videogames

August '14 August '15

26.6%

23.1%

9.0%

3.4%

24.7%

17.2%

7.4%

1.1%

18-29

30-44

45-60

60+

Age: Console

Aug '14 Aug '15

18.9%

22.7%

17.4%

5.3%

14.9%

23.7%

11.2%

7.2%

18-29

30-44

45-60

60+

Age: Smartphone

Aug '14 Aug '15

4.1%

5.8%

12.2%

12.6%

7.0%

8.0%

12.0%

9.0%

18-29

30-44

45-60

60+

Age: Tablet

Aug '14 Aug '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 20

How do you prefer to purchase most of your video games?

• Overall, 63.9% of gamers prefer digital downloads to physical discs.

• 79.9% of console gamers, on the other hand, prefer physical discs to digital downloads (filtered by console

gamers).

• Older respondents are the most likely to prefer digital downloads to physical discs.

7) Coach remains the top handbag brand in the $200 to $700 range, but Michael Kors and Kate

Spade are gaining traction among millennials.

Coach remains the trendiest handbag brand and the most likely to be chosen by respondents planning to buy a new

handbag, but it is losing momentum to Michael Kors and Kate Spade except among older respondents. 18- to 29-year-

22.1%

18.0%

12.8%

8.5%

13.3%

16.4%

14.1%

12.2%

9.8%

7.6%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Console

Aug '14 Aug '15

19.9%

16.7%

15.1%

17.0%

16.3%

6.9%

20.4%

15.9%

13.0%

13.3%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Smartphone

Aug '14 Aug '15

63.9%

36.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Digital downloads Physical discs

August

55.3%

63.8%

66.7%

71.2%

18-29

30-44

45-60

60+

Age: Digital downloads

August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 21

olds find Michael Kors the trendiest handbag brand and will purchase its handbags next, followed by Coach, Kate

Spade and Dooney & Bourke Inc. Michael Kors and Kate Spade are both becoming trendier and are more likely to be

purchased compared with the previous quarter, while Dooney & Bourke is declining in trendiness and respondents’

future purchases. Blueshift’s April 23 Coach report continues to holds weight in our survey as we still see Michael Kors

as Coach’s main threat; one supplier source said both brands were losing share to Kate Spade. Our findings of growing

purchases of Coach, Michael Kors, and Kate Spade align with all three companies’ recent earnings calls exceeding

expectations.

Which handbag brand do you consider to be the trendiest in the $200 to $700 range?

• 13.1% consider Coach the trendiest handbag brand in the $200 to $700 range, a 0.7 percentage-point decrease

quarter to quarter.

o 45- to 60-year-olds remain the primary age group to find Coach handbags the trendiest; they are joined by

respondents ages 18 to 29 in finding Coach to be trendier than in the previous quarter.

• 8.9% consider Michael Kors the trendiest brand in the $200 to $700 range, a 1.2 percentage-point increase.

o 30- to 44-year-olds are the primary age group to find Michael Kors handbags the trendiest, but all age

groups found the brand to be trendier than in the previous quarter.

• 5.3% consider Kate Spade the trendiest brand in the $200 to $700 range, a 0.8 percentage-point increase.

o All age groups except those above the age of 60 and led by 30- to 44-year-olds find Kate Spade more

trendy compared with the previous quarter.

• 3.2% consider Dooney & Bourke the trendiest brand in the $200 to $700 range, a 0.3 percentage-point decrease.

o Respondents 61 and older were more likely than other age groups to find Dooney & Bourke to be more

trendy, and was the only age group to find Dooney & Bourke trendier than in the previous quarter.

13

.8%

7.7

%

4.5

%

3.5

%

1.6

%

1.6

%

1.6

%

1.1

%

0.7

%

0.8

%

0.5

%

0.6

%

0.6

%

0.7

% 5.9

%

55

.2%

13

.1%

8.9

%

5.3

%

3.2

%

1.9

%

1.8

%

1.5

%

1.4

%

1.0

%

0.8

%

0.8

%

0.6

%

0.6

%

0.1

%

4.4

%

54

.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 22

Which handbag brand in the $200 to $700 range will you most likely purchase next?

• 18.7% of respondents who buy handbags most likely will purchase a Coach bag, a 2.9 percentage-point increase

compared with the previous quarter.

o Older respondents are the most likely to purchase a Coach handbag. Those 45 and older are more likely

than in the previous quarter to make a Coach purchase.

• 10.1% said they most likely will purchase a Michael Kors handbag, a 3.2 percentage-point increase.

o 18- to 29-year-old respondents are the most likely to purchase a Michael Kors handbag. Those younger

than 61 are more likely than in the previous quarter to make a Kors purchase.

• 4.8% will most likely purchase a Kate Spade handbag next, a 1.5 percentage-point increase.

o Those younger than 61, led by 18- to 29-year-olds, are more likely to purchase a Kate Spade handbag.

• 4.8% will most likely purchase a Dooney & Bourke handbag, a 1.5 percentage-point decrease.

o Respondents younger than 61 are less likely to purchase a Dooney & Bourke handbag, while those 61 and

older are the most likely to purchase the brand.

8.6%

13.5%

16.3%

13.7%

7.9%

14.7%

16.1%

14.6%

18-29

30-44

45-60

60+

Age: Coach

May Aug

9.9%

11.2%

8.3%

6.5%

9.7%

8.5%

8.2%

4.2%

18-29

30-44

45-60

60+

Age: Michael Kors

May Aug

5.0%

6.9%

5.6%

3.4%

2.3%

5.0%

5.4%

5.0%

18-29

30-44

45-60

60+

Age: Kate Spade

May Aug

2.3%

1.9%

3.8%

4.6%

3.2%

3.5%

4.3%

3.1%

18-29

30-44

45-60

60+

Age: Dooney & Bourke

May Aug

15

.8%

6.9

%

3.3

% 6.3

%

2.8

%

1.7

%

2.2

%

0.9

%

1.5

%

1.3

%

2.2

%

0.7

%

0.7

%

1.3

%

36

.0%

16

.5%

18

.7%

10

.1%

4.8

%

4.8

%

3.6

%

1.9

%

1.7

%

1.7

%

1.1

%

0.8

%

0.8

%

0.6

%

0.6

%

0.6

%

37

.3%

10

.7%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 23

8) Rental car use rises with end-of-summer travel, most alternatives take a hit since last month.

Respondents were more likely to report using rental cars only than to say they used alternatives in the last three

months. Their use of rental cars increased compared with July, which likely benefited Hertz Global Holdings Inc. (HTZ)

and Avis Budget Group Inc. (CAR). Uber is the most frequently used alternative, followed by taxis and Lyft, all of which

have decreased in popularity among respondents since July. Younger respondents are the primary users of Uber and

Lyft, while older respondents are most likely to use rental cars. 18- to 29-year-olds were the only age group to increase

their use of Uber since July. According to a leaked document, Uber will have $2 billion in revenue this year; it plans to

triple that next year and have an IPO within 18 to 24 months. The slight increase in respondents using only rental cars

was first spotted in Blueshift’s June 12 report, in which sources said Uber and Lyft were more of a threat to taxi

services.

Which of these services have you used instead of a car rental in the last three months? Select all

that apply.

• 18.9% only use rental cars, a 0.9 percentage-point increase compared with July.

o 18- to 44-year-olds have increased their use of rental cars since July, but respondents older than 60 still

are the most likely to use rental cars only.

• 13.9% have used Uber instead of a car rental in the last three months, a 2.7 percentage-point decrease.

o 18- to 29-year-olds still are the primary users of Uber, and were the only age group to increase their use of

the company compared with last month.

• 13.6% have used a taxi instead of a car rental in the last three months, a 2.8 percentage-point decrease since July.

• 3.1% have used Lyft instead of a car rental in the last three months, a 0.3 percentage-point decrease.

o All age groups except 45- to 60-year-olds decreased their use of Lyft compared with July.

11.9%

20.0%

20.0%

21.2%

12.2%

22.8%

15.6%

10.8%

18-29

30-44

45-60

60+

Age: Coach

May August

17.8%

8.3%

12.9%

1.9%

14.6%

5.3%

7.4%

3.3%

18-29

30-44

45-60

60+

Age: Michael Kors

May Aug

8.9%

4.2%

5.0%

1.9%

4.9%

1.8%

4.4%

2.5%

18-29

30-44

45-60

60+

Age: Kate Spade

May August

3.0%

3.3%

5.7%

7.7%

3.7%

7.9%

7.4%

5.8%

18-29

30-44

45-60

60+

Age: Dooney & Bourke

May Aug

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 24

9) Pay-TV service use has increased compared with six months ago; most online streaming services

continue to grow in usage, particularly HBO Now.

For the first time in months, the number of respondents with pay-TV services has increased. We also saw a decrease in

respondents who have never had a pay-TV service, a slight drop in respondents who canceled their pay-TV service more

than a month ago, and a consistent 1% of respondents who canceled their service in the last month. The increase in

those with add-on services could be reflected in pay-TV subscribers upgrading their services. DirecTV (DTV), Charter

Communications Inc. (CHTR), Dish Network Corp. (DISH), and Time Warner Cable Inc. (TWC) noted increases in revenue

per average customer.

18

.0%

16

.6%

16

.4%

3.4

%

3.2

%

1.5

%

1.5

%

0.4

%

0.7

%

1.0

%

2.2

%

51

.5%

18

.9%

13

.9%

13

.6%

3.1

%

2.3

%

1.5

%

0.9

%

0.5

%

0.4

%

0.1

%

2.6

%

55

.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

July August

27.9%

16.9%

9.0%

5.3%

25.0%

18.5%

14.2%

10.8%

18-29

30-44

45-60

60+

Age: Uber

July August

7.2%

3.9%

1.7%

0.0%

7.7%

5.0%

0.7%

0.8%

18-29

30-44

45-60

60+

Age: Lyft

July August

8.1%

16.9%

23.6%

25.2%

4.6%

13.9%

25.6%

26.6%

18-29

30-44

45-60

60+

Age: None, I only use rental cars

July August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 25

Overall pay-TV subscribers are more likely to cancel their service than they were in February, but the number of those

very or extremely likely to do so has decreased over that time. 18- to 29-year-olds are twice as likely to cancel their pay-

TV service in the next six months than they were in February.

Netflix Inc. (NFLX) continues to lead all adoption of online streaming services, followed by Google Inc.’s (GOOG/GOOGL)

YouTube, which experienced the most growth during the last six months. Dish’s Sling TV continues to see minimal

adoption, as discussed in Blueshift’s March 26 report. All online streaming services have increased in use except for

ESPN3 (Walt Disney Co./DIS and Hearst Corp.), for which use has stayed the same, and Viacom Inc.’s (VIA/VIAB)

Nickelodeon Noggin, which received fewer mentions than in May. Time Warner Inc.’s (TWX) HBO Now has doubled in

use compared with the previous quarter, and just became more attractive to families because of a new deal with the

Sesame Workshop for the exclusive rights to episodes for nine months before they air on PBS. HBO Now is now

available on Amazon.com Inc.’s (AMZN) Fire TV and Fire TV Stick, as well as on Chromecast and on Android and iOS

devices.

Do you use pay-TV in your household?

• 69.9% have a pay-TV service, a 1.5 percentage-point increase compared with six months ago.

• Of those, 32.9% have pay-TV with add-on services, a 1.5 percentage-point increase.

o 18- to 29-year-olds and those above the age of 61 have increased their subscriptions to pay-TV with add-

on services, while 30- to 59-year-olds have decreased such subscriptions.

• 17.7% have never had a pay-TV service, a 1 percentage-point decrease compared with six months ago.

o 18- to 29-year-olds are still the most likely to have never had a pay-TV subscription, but this percentage

has fallen compared with six months ago.

• 11.4% canceled their pay-TV subscription more than a month ago, a 0.4 percentage-point decrease.

o 30- to 44-year-olds and those above the age of 61 have increased in their cancellations of pay-TV

subscriptions more than a month ago.

• 1% of respondents canceled their pay-TV subscription in the past month, the same as six months ago.

31.4%

37.0%

18.7%

1.0%

11.8%

32.9%

37.0%

17.7%

1.0%

11.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Yes, including add-onservices like HBO

Yes, just basic service No, I have never hadpay-TV

No, I canceled my pay-TV subscription in past

month

No, I canceled my pay-TV subscription more

than a month ago

February August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 26

.

How likely are you to cancel your pay-TV subscription and use online-only streaming services in the

next six months?

• 40.5% of pay-TV users are likely to cancel their subscription in the next six months, a 0.8 percentage-point increase

compared with two months ago.

o 18- to 29-year-olds and lower-income households are the most likely to cancel their pay-TV service in the

next six months. Such responses have increased compared with two months.

• 7.5% of pay-TV users are very or extremely likely to cancel their pay-TV subscriptions in the next six months, a 2.7

percentage-point decrease compared with two months ago.

33.8%

19.6%

9.0%

10.3%

40.0%

18.4%

9.9%

10.3%

18-29

30-44

45-60

60+

Age: Have never had pay-TV

February August

22.1%

26.2%

36.8%

43.9%

14.5%

26.7%

41.3%

39.5%

18-29

30-44

45-60

60+

Age: Have add-on services

February August

10.8%

18.9%

9.7%

6.1%

17.7%

15.3%

11.0%

4.2%

18-29

30-44

45-60

60+

Age: Canceled more than 1 month ago

February August

60.3%

18.6%

10.9%6.2%

4.0%

59.5%

20.3%

12.8%

4.3% 3.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Not at all likely Slightly likely Moderately likely Very likely Extremely likely

June August

16.4%

9.6%

3.5%

6.0%

7.0%

14.0%

10.2%

8.4%

18-29

30-44

45-60

60+

Age: Very/extremely likely

June August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 27

Which online streaming TV services do you use?

• 54.6% use Netflix, a 5.1 percentage-point increase compared with six months ago.

o Netflix is used the most by 18- to 29-year-olds; all other age groups posted increases in the number of pay-

TV subscriptions compared with six months ago.

• 41.9% use YouTube, an 11.3 percentage-point increase compared with six months ago.

• 24.8% use Amazon Instant Video, a 4 percentage-point increase compared with six months ago.

o All age groups, led by 30- to 44-year-olds, increased their adoption of Amazon Instant Video.

• 11.5% of respondents use Hulu Plus, a 2.8 percentage-point increase compared with six months ago.

o All age groups increased their adoption of Hulu Plus. 18- to 29-year-olds still are the primary users, but

usage increased the most among those ages 30 to 44 compared with six months ago.

• 14.6% of respondents use Hulu, a 3.7 percentage-point increase compared with six months ago.

o Adoption of Hulu is still led by 18- to 29-year-olds, but this number has slightly decreased compared with

six months ago. All other age groups posted increases.

• 11.1% of respondents use HBO Go, a 2.1 percentage-point increase compared with six months ago.

o All age groups, still led by 18- to 29-year-olds, increased their adoption of HBO Go.

• 6% of respondents use HBO Now, a 3.5 percentage-point increase compared with a quarter ago.

o All age groups, still lead by 18- to 29-year-olds, increased their adoption of HBO Now.

• 1.6% of respondents use Sling TV, a 0.6 percentage-point increase compared with last quarter.

o 18- to 29-year-olds were the only age group to decrease their adoption compared with last quarter.

• 25.9% do not use any online streaming TV services, a 5.3 percentage-point decrease.

o Those with incomes above $150,000 were the only level to post an increase in the number of respondents

without online streaming services. All other income levels saw a decline compared with six months ago.

17.1%

11.5%

6.4%

3.0%

2.3%

14.9%

13.3%

8.1%

8.5%

9.3%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Very/extremely likely

June August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 28

49

.5%

30

.6%

20

.8%

10

.9%

8.7

%

9.0

%

4.9

%

4.8

%

2.5

%

3.4

%

3.2

%

3.3

%

0.9

%

1.0

%

0.6

%

0.7

% 3.3

%

31

.2%

54

.6%

41

.9%

24

.8%

14

.6%

11

.5%

11

.1%

8.0

%

6.3

%

6.0

%

5.1

%

5.0

%

3.3

%

3.2

%

1.6

%

1.3

%

0.6

%

5.6

%

25

.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

February August

69.4%

64.6%

51.7%

36.6%

70.0%

52.2%

46.6%

31.9%

18-29

30-44

45-60

60+

Age: Netflix

February August

31.1%

31.5%

21.9%

17.9%

27.3%

23.9%

18.4%

15.6%

18-29

30-44

45-60

60+

Age: Amazon Instant Video

February August

23.9%

14.2%

14.9%

7.3%

24.1%

8.6%

8.8%

4.6%

18-29

30-44

45-60

60+

Age: Hulu

February August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 29

10) Concerns have decreased regarding personal accounts being hacked and national

cybersecurity.

Four in 10 respondents are very or extremely concerned about personal accounts or devices being hacked, a decrease

compared with the previous quarter. All age groups and income levels are less concerned about their personal

accounts or devices being hacked, with 18- to 29-year-olds being the least concerned. The decline is surprising in light

of recent developments such as the Ashley Madison data hack, Android’s text hack and car hacks.

Roughly half of respondents are still very or extremely concerned about national cybersecurity, but such responses

have decreased compared with the previous quarter. All age groups and household income levels are less concerned

compared with the previous quarter, led by 18- to 29-year-olds and/or those with households incomes of $24,999 or

18.5%

15.0%

9.4%

5.3%

17.3%

7.5%

7.8%

3.4%

18-29

30-44

45-60

60+

Age: Hulu Plus

February August

16.2%

15.0%

8.3%

6.1%

14.1%

12.5%

6.0%

4.6%

18-29

30-44

45-60

60+

Age: HBO Go

February August

8.6%

7.3%

5.2%

2.7%

2.3%

3.9%

2.5%

1.2%

18-29

30-44

45-60

60+

Age: HBO Now

May August

1.8%

2.7%

1.4%

0.8%

1.9%

1.2%

0.7%

0.0%

18-29

30-44

45-60

60+

Age: Sling TV

May August

17.7%

22.4%

27.9%

24.9%

27.6%

33.6%

34.8%

30.8%

29.9%

20.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: No online streaming

February August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 30

less. Stopping national cybersecurity hacks has increasingly been emphasized by the National Cyber Security Alliance,

which BlackBerry Ltd (BBRY) just joined.

How concerned are you that any of your personal accounts or devices could be hacked?

• 39.3% are very or extremely concerned about their personal accounts or devices being hacked, a 9.9 percentage-

point decrease quarter to quarter.

o All age groups are less concerned about their personal accounts or devices being hacked, but 45- to 60-

year-olds remain the most concerned about being hacked.

o All income levels are less concerned about their personal accounts or devices being hacked, but those

making more than $150,000 or between $25,000 and $49,999 remain the most concerned about their

personal accounts or devices being hacked.

• 7.1% are not at all concerned about their personal accounts or devices being hacked, a 0.3 percentage-point

increase quarter to quarter.

o 18- to 29-year-olds remain the least concerned about their personal accounts being hacked. 30- to 44-

year-olds and those above the age of 61 have become less concerned.

6.8%

14.4%

29.6%

23.8%25.4%

7.1%

18.6%

35.0%

20.3% 19.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Not at all concerned Slightly concerned Moderately concerned Very concerned Extremely concerned

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 31

How would you describe your level of concern about national cybersecurity?

• 51.5% are very or extremely concerned about national cybersecurity, a 6.2 percentage-point decrease quarter to

quarter.

o Older respondents remain the most concerned about national cybersecurity, but all age groups have

become less concerned regarding the matter quarter to quarter.

o Households with incomes above $150,000 are the most concerned about national cybersecurity, but all

income levels have become less concerned regarding the matter quarter to quarter.

• 6.9% of respondents are not at all concerned about national cybersecurity, a 1.2 percentage-point increase.

o Younger respondents remain the least concerned about national cybersecurity. 45- to 60-year-olds were

the only age group to become more concerned quarter to quarter.

o Lower-income households are the least concerned about national cybersecurity. Those with incomes lower

than $99,999 have become less concerned quarter to quarter.

13.5%

8.5%

3.8%

3.8%

13.9%

7.8%

3.9%

3.1%

18-29

30-44

45-60

60+

Age: Not at all concerned

May Aug

27.0%

37.7%

46.5%

43.9%

32.4%

50.0%

55.9%

55.8%

18-29

30-44

45-60

60+

Age: Extremely or very concerned

May Aug

11.0%

8.3%

7.4%

4.9%

1.0%

12.7%

6.6%

5.2%

3.9%

5.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Not at all concerned

May Aug

39.7%

43.0%

36.2%

32.1%

43.9%

46.4%

51.5%

45.3%

50.0%

50.5%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Extremely or very concerned

May Aug

5.7%

10.2%

26.3%

30.5%

27.2%

6.9%

12.3%

29.3%26.3% 25.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Not at all concerned Slightly concerned Moderately concerned Very concerned Extremely concerned

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 32

11) Solar adoption grows, but the number of those likely to adopt solar drops.

Solar power adoption in homes has grown compared with last year, but those likely to make the switch going forward

have declined. The 0.9 year-to-year percentage-point growth in respondents who already have adopted solar power in

their homes represents a 53% increase over that time period. Higher-income households, specifically those making

$150,000 or more a year, are the most likely to adopt or already have adopted solar panels in their homes.

Companies are building out solar fields to sell power to electric companies. Texas is starting to experience a boom in

this sector. OCI Solar Power LLC, First Solar Inc. (FSLR), SunEdison Inc. (SUNE) and Recurrent Energy (a subsidiary of

Canadian Solar Inc./CSIQ) are all trying to start their very own solar fields in the state, which does not offer incentives to

utilities to buy or build solar panels. The Electric Reliability Council of Texas, the power grid operator for most of the

state, expects 10,000 to 12,500 megawatts of solar electricity capacity or the equivalent of all the solar farms currently

operating in the United States to be installed by 2029. New York is seeing residential solar adoption rise as prices for

installations drop; a New York resident can install solar panels for an average $15,000, but will spend around $8,000

total after rebates and tax incentives. Google has launched a beta version of Project Sunroof, which allows consumers

to see how much sun falls on their roof and where the solar panels will fit best. It also includes a price calculator and

contact information on installers. However, utility companies are placing fees on residential solar installers.

How likely are you to adopt solar power for your home during the next six months?

• 2.6% already have solar panels for their homes, a 0.9 percentage-point increase compared with a year ago.

o All income levels posted increases in solar panel adoption compared with a year ago, but respondents with

higher incomes had the top adoption level.

o 45- to 60-year-olds have been the primary adopters of solar panels for homes.

• 24.3% are likely to adopt solar panels for their homes in the next six months, a 4.9 percentage-point decrease.

o 45- to 60-year-olds are now the most likely to adopt solar panels for their homes.

o All household income levels have decreased their likelihood of adopting solar panels year to year.

14.0%

9.6%

2.1%

3.1%

13.9%

6.2%

2.9%

1.2%

18-29

30-44

45-60

60+

Age: Not at all concerned

May Aug

30.6%

48.5%

59.7%

63.4%

38.0%

55.0%

63.1%

71.5%

18-29

30-44

45-60

60+

Age: Extremely or very concerned

May Aug

12.5%

10.3%

5.8%

3.0%

1.0%

10.5%

4.8%

4.1%

4.6%

4.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Not at all concerned

May Aug

45.6%

50.0%

51.6%

48.5%

56.1%

51.9%

59.9%

55.8%

65.4%

60.4%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Extremely or very concerned

May Aug

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 33

12) Fewer respondents smoke tobacco compared with a year ago, but e-cigarette use has

increased.

Almost 83% of respondents do not smoke tobacco compared with a year ago, but those who do smoke prefer

manufactured cigarettes. Electronic cigarettes were the only type of tobacco to post higher usage, particularly among

1.7% 2.5% 3.8%7.2%

15.7%

69.2%

2.6% 1.2% 2.8%5.6%

14.7%

73.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

I already have solarpanels

Extremely likely Very likely Moderately likely Slightly likely Not at all likely

August '14 August '15

1.8%

1.2%

3.8%

3.1%

1.4%

1.5%

0.7%

2.6%

18-29

30-44

45-60

60+

Age: Have adopted solar

August '14 August '15

24.8%

26.9%

30.2%

26.0%

32.6%

35.5%

25.3%

30.6%

18-29

30-44

45-60

60+

Age: Likely to adopt solarin six months

August '14 August '15

1.5%

0.6%

2.9%

2.4%

6.1%

1.4%

0.0%

1.5%

1.6%

1.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Have adopted solar

August '14 August '15

27.9%

21.8%

26.9%

29.7%

31.6%

28.8%

26.8%

27.8%

31.0%

41.9%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Likely to adopt solar in six months

August '14 August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 34

those 18 to 29 years old. A recent study by Public Health England suggests that e-cigarettes are 95% safer compared

with cigarettes, and that the National Health Service should consider recommending e-cigarettes to consumers who

want to quit smoking. U.S. smokable product sales have declined 3% to 6% each year since 2009, and are anticipated

to fall 3% this year. At the same time, e-cigarette sales have doubled each year, from $20 million in 2008 to around

$1.5 billion in 2014, and are projected to continue to grow 20% year to year going forward. Altria Group Inc. (MO) is one

tobacco company trying to offset declining tobacco sales with e-cigarettes.

How do you smoke most of your tobacco?

• 82.8% do not smoke tobacco, a 0.9 percentage-point increase year to year.

• 17.3% smoke tobacco, a 0.9 percentage-point decrease compared with a year ago.

o 30- to 44-year-olds were the only age group to post an increase in smoking compared with a year ago,

while 18- to 29-year-olds remain the most likely to smoke tobacco.

o Respondents with household incomes $24,999 or less have increased the amount they smoke and

remain primary users of tobacco.

• 61.6% of tobacco users choose manufactured cigarettes, a 5.3 percentage-point decrease year to year.

• 1.7% use e-cigarettes or vaporizers, a 0.1 percentage-point increase compared with a year ago.

o 9.9% of tobacco users specifically choose e-cigarettes or vaporizers, a 1.1 percentage-point increase

compared with a year ago

o 18- to 29-year-olds use e-cigarettes the most out of all the age groups, up 0.9 percentage points compared

with a year ago. Those 61 and older also have increased their use of e-cigarettes.

o Lower-income households remain the most likely to use e-cigarettes, but have posted a year-to-year

decline.

12.1%

3.3% 1.6% 1.2% 1.1% 0.4%

81.9%

10.6%

2.6% 1.7% 1.2% 0.8% 0.4%

82.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Cigarettes Cigars Electroniccigarette or

vaporizer

Hookah Hand-rolledcigarettes

Pipe I do not smoketobacco

August '14 August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 35

13) Half of respondents support legalization of marijuana, an increase from a year ago.

Support for marijuana legalization has grown in all age groups and in households with incomes above $25,000, and

now represents almost half of our respondents. The number of marijuana users among respondents has decreased

compared with the previous month, while responses have increased from those who have used marijuana in the past.

In Oregon, consumers 21 and older will be able to purchase recreational marijuana in participating medical marijuana

stores in October; a 25% tax on the product will not start until January. Other states are gearing up for the 2015 or

2016 ballots to include propositions to legalize marijuana.

What should the current law be regarding marijuana?

• 48.4% support the legalization of marijuana, a 6.7 percentage-point increase compared with a year ago.

o All age groups and those with household incomes of $25,000 or higher reported more support for the

legalization of marijuana.

• 14.6% want to keep marijuana illegal, a 4.1 percentage-point increase compared with a year ago.

66.9%

18.2%

8.8% 6.6% 7.2%2.6%

61.6%

15.1%9.9% 7.0% 4.7% 2.3%

Cigarettes Cigars E-cig or vaporizer Hookah Hand-rolledcigarettes

Pipe

Percentage among Tobacco Smokers

August '14 August '15

22.5%

21.9%

16.3%

9.2%

23.3%

19.9%

19.0%

11.3%

18-29

30-44

45-60

60+

Age: Smoke tobacco

Aug '14 Aug '15

3.2%

1.9%

1.0%

1.2%

2.3%

1.9%

1.4%

0.8%

18-29

30-44

45-60

60+

Age: E-cig/vapor

Aug '14 Aug '15

34.6%

21.2%

18.3%

9.1%

15.3%

27.4%

26.1%

19.3%

17.9%

10.5%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Smoke tobacco

Aug '14 Aug '15

4.4%

1.3%

1.3%

1.2%

1.0%

5.5%

0.0%

1.5%

2.7%

0.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: E-cig/vapor

Aug '14 Aug '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 36

(Optional) Do you smoke, vaporize or ingest marijuana? Your answers are kept strictly confidential.

• 18.6% currently do not use marijuana but have in the past, a 1.5 percentage-point increase from May.

o Younger respondents remain the most likely to have used marijuana in the past.

o Those with higher household incomes now are the most likely to have used marijuana in the past, a

reversal from our results in the last quarter.

• 5.7% of respondents use marijuana, a 2 percentage-point decrease compared with the previous quarter.

o Younger respondents still are the most likely to use marijuana.

o Respondents with household incomes of $100,000 to $149,999 now are the most likely to use marijuana.

• 1.5% use marijuana for medical purposes, a 0.2 percentage-point decrease compared with the previous quarter.

41.7%

23.3% 24.5%

5.8% 4.7%

48.4%

19.6%17.5%

7.8% 6.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Completely legal Medical use only Controlled on a state-by-state basis

Illegal with lowpunishments

Illegal with highpunishments

August '14 August '15

51.4%

49.2%

46.9%

47.3%

51.2%

46.2%

37.2%

36.6%

18-29

30-44

45-60

60+

Age: Legalization

August '14 August '15

47.8%

53.2%

47.1%

53.9%

56.1%

49.3%

45.8%

40.6%

45.7%

48.6%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Legalization

August '14 August '15

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 37

7.7%

1.7%

71.1%

17.1%

2.4%5.7%

1.5%

71.0%

18.6%

3.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Yes Yes, for medical purposes No Not currently, but I have inthe past

Decline to answer

May August

9.3%

8.9%

4.2%

1.2%

15.3%

7.0%

6.8%

3.1%

18-29

30-44

45-60

60+

Age: Currently uses marijuana

May August

6.6%

7.8%

5.5%

8.5%

1.0%

11.6%

10.2%

5.6%

6.9%

5.9%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Currently uses marijuana

May August

20.8%

20.1%

17.4%

16.6%

18.1%

23.3%

16.1%

11.5%

18-29

30-44

45-60

60+

Age: Have used marijuana in the past

May August

19.1%

17.0%

20.5%

20.1%

24.5%

21.0%

22.2%

16.5%

12.3%

17.8%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Have used marijuana in the past

May August

August 28, 2015

301 Battery Street, 2nd Floor, San Francisco, CA 94111 | www.blueshiftideas.com 38

14) Support is growing for not vaccinating children.

Opposition to childhood vaccinations is growing among respondents under the age of 60, specifically those 18 to 29

years old. Still, those in support of vaccinating children largely outnumber those in opposition. In June, California

became the largest state to require most public school children to get vaccinations. The law eliminates personal and

religious exemptions, and may be creating backlash. As a result, the Department of Health has created a “Don’t Wait.

Vaccinate.” campaign.

Should children be vaccinated?

• 5.8% believe children should not be vaccinated, a 1.3 percentage-point increase year to year.

o Respondents under the age of 61, led by 18- to 29-year-olds, are becoming more opposed to vaccinating

children.

The Author(s) of this research report certify that all of the views expressed in the report accurately reflect their personal views about any and all of the subject securities

and that no part of the Author(s) compensation was, is or will be, directly or indirectly, related to the specific recommendations or views in this report. The Author does not

own securities in any of the aforementioned companies.

OTA Financial Group LP has a membership interest in Blueshift Research LLC. OTA LLC, an SEC registered broker dealer subsidiary of OTA Financial Group LP, has both

market making and proprietary trading operations on several exchanges and alternative trading systems. The affiliated companies of the OTA Financial Group LP, including

OTA LLC, its principals, employees or clients may have an interest in the securities discussed herein, in securities of other issuers in other industries, may provide bids and

offers of the subject companies and may act as principal in connection with such transactions. Craig Gordon, the founder of Blueshift, has an investment in OTA Financial

Group LP.

© 2015 Blueshift Research LLC. All rights reserved. This transmission was produced for the exclusive use of Blueshift Research LLC, and may not be reproduced or relied

upon, in whole or in part, without Blueshift’s written consent. The information herein is not intended to be a complete analysis of every material fact in respect to any

company or industry discussed. Blueshift Research is a trademark owned by Blueshift Research LLC.

95.5%

4.5%

94.2%

5.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Yes No

August '14 August '15

9.9%

8.1%

4.2%

1.9%

6.0%

6.0%

3.0%

3.0%

18-29

30-44

45-60

60+

Age: Opposed to vaccinations

August '14 August '15