future of tv - distribution version - mar09 - final 2.0

8/8/2019 Future of TV - Distribution Version - MAR09 - Final 2.0

1/17

Dr. Seth GeigerPresident SmithGeiger, LLC

Digital Media Trends andDigital Media Trends and

the Future of Televisionthe Future of Television


2/17

11The Current LandscapeThe Current Landscape

TV Still Matters!

Viewership remains high Strongest and most effective promotional

platform

Significant driver of web consumptionThe Fundamental Disconnect

TV Viewers have never been happier The industry has never been more challenged

Whats Next What are the emerging trends in the TVmarketplace?

How can we assert leadership and build thenext generation of TV around these shifts?

The Future of TV is Now


3/17

225 New Truths5 New Truths

Online video has become ubiquitous, digital

media consumption has become the norm.

1. Media consumers are dictating the pace of

change.

2. Digital media are now playing afundamental role in the TV experience.

3. The maturation of the web from a signpost

to an entertainment experience is being

driven by branded television content.

4. Viewers are heavily engaged with digital

media less so with linear television.

5. Television still matters, but it can no

longer succeed as a stand alone platform.



4/17


Online video consumption has becomeubiquitous 82% are watching online video,30% watch daily (49% of 16 to 34 males).

Adoption rates for online video viewing offull episodes of television programs

represent the fastest take rate in history ofany form of media distribution. Half of 16 to 54 year olds are now watching

full episodes of TV programs online, 28%weekly (VCR, 7 years; Color TV, 12years;Web, 11years)

Aggregate weekly viewing of online videohas grown to 5.3 hours a week among onlinevideo users, an increase of 51% in the pastyear.

Share of linear TV as a percentage of all rich

media consumed has shrunk from 59%

to54% in the past 12months.

1. Consumers are Dictating the Pace of Change


5/17

44

Average Weekly Hours

Among Age by Gender

Males 16-

24

Females

16-24

Males 25-

34

Females

25-34

Males 35-

44

Females

35-44

Males 45-

54

Females

45-54Live on TV 13.4 17.3 17.5 18.7 25.3 21.4 26.4 24.7On a DVD 6.6 4.9 8.2 7.6 7.7 5.9 4.4 3.6Watching video online on

a computer9.1 3.4 7.1 4.5 5.4 2.3 2.7 0.9

With a DVR or TiVo 3.1 2.5 4.9 5.5 3.2 4.1 4.7 4.6VOD 3.0 0.6 2.1 2.1 1.0 0.5 0.9 0.9

36.7

20.8

6.1 4.3 4.11.4

57%

17% 12%

4%

11%

0

5

10

15

20

25

30

35

40

45

50

55

60

Total Live on TV On a DVD Watching video

online on a

computer

With a DVR or

TiVo

With Video on-

demand -VOD

-5%

5%

15%

25%

35%

45%

55%

65%

% of Total Ric Media

Hours Spent Watching TV or Video - WeeklyTV and Rich Media ViewersTV and Rich Media Viewers

Average Weekly Hours Spen Watching

TV or Rich Media in the Following Ways

Weekly Average Among

Platform Users / OwnersTotal % Users

Live on TV 20.8 90%With a DVR or TiVo 11.1 37%

On a DVD 6.1 68%

With Video on demand -VOD 5.7 24%

Watching video online on a computer 4.3 82%

M 16-24 W 16-24 M 25-34 W 25-34 M 35-44 W 35-44 M 45-54 W 45-54


6/17


Web usage is now intrinsically woven into the TVviewing experience as a utility to help planviewing, an enhancement, and a socialexperience.

The majority of TV viewers are now turning tothe web to find out more about their favoriteTV shows

Three-in-ten are online to see what other fansare saying about TV programs

One-in-four are actively using social networkingsites to comment on TV shows

Digital convenience has changed the wayviewers approach linear television in a hierarchyof needs: Shows I watch as soon as they are available (live)

Shows I am willing to wait for and time shift

Social experience Nearly one-third are weekly

viewers of online videos sent via email

2. Digital Media is Fundamental to the TV Experience


7/17

66

Agree With StatementsOnline Video UserOnline Video User

Agree With Internet and nlineVideo sage State ents

Youngerde os are uch ore likely to use the web as a TVenhance ent lder wo en are ore likely than older en.

s ales s ales s ales s ales

Agree A ong Gender by Age

Based on 82% of RespondentsWho watch video online

51%

41%

29%

28%

25%

You often use the inte net to find out

morea out some of your favorite TV

shows

The internet he ps you to get more

enjoyment from te evision

You use the internet to he pp an your

te evisionviewing inadvance

You go on ine to find out what other

fansaresaying a out TVshows

You like to comment onvideos you

have watched online

M 16-24 W 16-24 M 25-34 W 25-34 M 35-44 W 35-44 M 45-54 W 45-54


8/17


For the vast majority of viewers, the web isenhancing their TV experience, not supplanting

it

Fans of shows are watching online if theymissed the original airing

Incremental viewing is a significant part of thelandscape one-in-four are watching scenes of

the entire show again

The web is an effective acquisition tool,

allowing new viewers to become familiar with ashow and/or catch up on earlier episodes

The heaviest consumers of online video are themost frequent viewers of TV overall.

Between 4% and 6% of viewers of a specificprogram have replaced on-air with online

2. Digital Media is Fundamental to the TV Experience


9/17

88

15%

11%

10%

8%

9%

8%

23%

20%

15%

17%

13%

13%

37%

31%

25%

24%

21%

21%

Watch anentireepisode ofanexistin

televisionprogra thatsalready aired

Searched forspecificcontent a out a TVshow

or ovie

Watch apreview ofanew TVshow before it has

aired

Used the web to decide which TVprogra s to

watch

Uploadavideo to any website

Co ent on TVshowsat asocial networkin

site

Onceaday or ore

t least oncea week

Frequency of Doing ActivityOnline Video UserOnline Video User

Do Each nline Activity Weekly

Weekly viewership o episodes that have already aired reaches 37 ,driven

by younger wo en.

10%do allvideo

a tivitiesweekly

Based on 82% of Respondents Who Watch Video Online

M 16-24 W 16-24 M 25-34 W 25-34 M 35-44 W 35-44 M 45-54 W 45-54

nline TV

riginal Media Source

Top2De os


10/17


Linear TVs domain is now compartmentalized,even as TV content drives the web.

TV captures broad entertainment andsocial companionship.

News is migrating to a digital environment.

The gap between the web as an informationresource and an entertainment destination isclosing, driven by the availability of full TVepisodes and clips.

The Web is now the preferred choice forlaughter and humor, for the latest trends, and

for learning new and interesting things. Supporting a multi-platform position and

maintaining the flow between web and TV iscritical to survival.

There is an emerging core replacing TVwith web (driven by younger males).

3. TV drives the web


11/17

1010

57%52% 48% 45% 42%

35% 35% 32%

21% 21% 15% 19%7%

23%21%20%

3%9% 8% 8% 7% 3% 6% 2%0

10

20

30

40

50

60

70

80

90

100

To ave

somet i

on in t e

back round

while oudo

other things

To learnnew

and

interesting

things

To eelmore

connected to

theworld

around ou

Tostayup-

to-dateon

the latest

trends

henyou

have ust a

fewfree

minutes

henyou

havean

entire

evening to

spend

Todo

something

that is

exciting

To relaxand

unwind

%

of

espondents

Winner Wat ing TV programsat t eirschedued timeson TV Watching ideoson theinternet

Media Trends & BehaviorMedia Trends & BehaviorMedia Most Likely to Turn to Web video captures the highest levels of interest for core information items:

Learning new and interesting things Feel more connected to the world around you Stay up-to-date on the latest trends

Media Most Likely to Turn WhenLooking to do the Following (1 of2)Media Most Likely to Turn WhenLooking to do the Following (1 of2)

- Surfing the internetw out watching video

- Listening to usic

None

- Watching videosorDVDs


12/17

1111

- Watching videosorDVDs

- Surfing the internetw out watching video

- Watching TV progra s at theirscheduled ti es on TV

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Tohavefun To laugh Tobe

entertained

or omething

to dowhile

ouarewith

friend

To passthe

time

To eep ou

compan

Tohavesome

timeto

ourself

ofRespondents

Winner Wat ing rograms at t eirs eduled times on Wat ing ideos on t einternet

Media Trends & BehaviorMedia Trends & BehaviorMedia Most Likely to Turn to

Media Most Likely to Turn WhenLooking to do the Following (2 of2)Media Most Likely to Turn WhenLooking to do the Following (2 of2)

TV is still seen as the primary source for entertainment and to keep you company.

TV, Web, and DVD are comparable on laughter, Gaming is the most fun activity.

- Listening to usic - Playing video ga es


13/17


TV still matters, capturing 57% of total screen time. Younger demos are migrating fastest to the digital

arena less than half of all rich media consumed

among 16 to 34 year olds is spent with live TV (just

38% among 16 to 24 year old males)

Weekly viewers of full episodes are the heaviestconsumers of TV across all platforms (45.1 hours)

Social networking is a force among younger demosbut is rapidly expanding across all age groups.

Four-in-five (ages 14 to 29) have a personal web

page on at least one social networking site

22% of all web time is spent on a socialnetworking site (ages 14 to 29).

80% of 18-to-21 year olds are weekly visitors

25% of daytime TV viewers ages 25 to 54 have a

personal web page

20% of all web users are watching full episodes

at social networking sites

4. The Audience Is Engaged But Not With Linear TV


14/17

1313

- Watching TV progra s at theirscheduled ti es on TV

0%

10%

20%30%

40%

50%

60%

70%

80%

90%

100%

A local news

program

urrent

episodesof

situation

comedies

urrent

episodesof

primetime

dramas

urrent

episodesof

crimeand

police

dramas

urrent

episodesof

comedieson

cable

urrent

episodesof

dramason

cable

urrent

episodesof

realit show

competitions

urrent

episodesof

adventure

realit

programs

ofRespondents

Winner Recordedona iVoor VRamong VR HH treamingat a ebsiteonline it commercials forfree

TV Viewing Trends & BehaviorTV Viewing Trends & BehaviorPreferred Way of Watching Types of Programs

Media Most Likely to Turn WhenLooking to do the FollowingMedia Most Likely to Turn WhenLooking to do the Following

Watching programs at their regularly schedules times live on television is still the preferred method towatch all types of shows. Slightly more viewers are watching current episodes of cable comedies onlinethan other types of shows.

ther options: V D,DVR,DVD, iPod


15/17


Branded TV sites have a competitive advantagetoday over aggregators for branded content, but

the gap is closing.

TV is perceived as primarily a medium forentertainment and laughter, secondarily as a

source for news and information Two thirds have TV shows they almost

never miss

Half use TV as a social currency to discuss

with friends

Nearly half say TV is their primary source ofentertainment

Four-in-ten say TV is their primary source of

information

Linear TV (and front door web traffic) are being

replaced with a broad distribution model.

5. TV Still Matters, Reinforced byOnline Allegiances


16/17

1515The Current LandscapeThe Current Landscape

Addressing the fundamental disconnect:1. Embrace the viewer as an active participant

Linear TV Community of TV viewers

Access to content delivers reach (bydefinition) and reinforces on-air and

online platforms2. The TV show is the catalyst but not the

endgame

Packaged content Web applications toshare, comment, and enhance content

Convenience + Engagement = Loyalty3. The easy stuff is over

Mass sales targeted long tail

Consumer interest opens the door toconsumer-focused selling



17/17

Dr. Seth GeigerPresident SmithGeiger, LLC

Digital Media Trends andDigital Media Trends and

the Future of Televisionthe Future of Television

future of tv - distribution version - mar09 - final 2.0

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