These are key findings from Altman Vilandrie & Co's 2013 Consumer Video Research showcasing online video viewing adoption, attitudes toward pay-TV and cord-cutting, and millennials' use of broadcast TV.

1. 2013 Consumer Video Research
Excerpts for VideoNuze
21 November 2013

2. Altman Vilandrie & Company
AV&Co. is the leading strategy firm focused on the Telecom, Media, and Tech sectors
Background
Locations
 Founded in 2002 in Boston
 Led by 8 Directors and 8 Principals
San
Francisco
 80+ consultants in North America
New York
City
Boston
London
Munich
Budapest
 Additional 40 consultants in Europe operating
as Solon Management Consulting
Value Proposition
 Telecom, Media, & Technology (TMT) focus
results in better advice and speed
 Fact-based, highly analytical, and
economics-based approach
 Serve corporate and private equity clients
Confidential – Do Not Reproduce
Countries where AV&Co./Solon
has assisted clients
21 November 2013
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3. 2013 AV&Co./Research Now Video Survey – Methodology and Approach
AV&Co.’s 2013 Video Survey explores the transformation of consumer behavior in TV
show and movie watching
Sample Areas Explored
Survey Background
• Web survey conducted in
July, 2013—similar to
surveys done in summers
of 2010-2012
• Conducted in partnership
with Research Now, an
online panel provider
• Sample of 2,548
respondents (~500 in each
of 5 age bands) who are
video-decision makers for
their household
• Paid-TV subscribership – cord-cutters, cord-nevers,
cord shavers
• Online video usage – paid, ad-based, pirated
• Devices used to control and watch video
• Mobile viewing – location, devices, and rationale
• Interest in a la carte channel offers
• Attitudes toward live viewing, prerecorded shows, and
genres
• Multitasking and binge-watching
• TV Everywhere – awareness, usage, preferences
• Interest in an “add-on” service depending on brand,
price, content, live channels, and device availability
• Impact of Netflix offer and pricing scenarios
Confidential – Do Not Reproduce
21 November 2013
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4. Online Viewing Adoption
Internet TV show/movie viewing is growing across all ages; younger consumers watch
online video more frequently, but older consumers had a large increase in 2013
How often do you watch TV shows/movies on the internet?
(% responding at least weekly)
81%
80%
75%
2011
2012
2013
72%
68%
62%
60%
54%
51%
45%
37%
36%
33%
24% 26%
18-24
25-34
35-44
45-54
55+
Age
Base: All respondents
Source: 2011, 2012 and 2013 AV&Co./Research Now Surveys; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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5. Drivers of Paid Online Video Adoption
Viewing flexibility is a main driver of internet video service subscriptions, but almost
40% of online video subscribers report saving money as a motivating factor
Why do you use a paid internet video service?
(% selecting each option)
53%
I can watch on my own timetable
43%
I can easily get TV shows I want to watch
39%
It saves me money overall
34%
I can watch everywhere I go
I can get TV shows and movies I can't get anywhere
else
30%
It lets me watch TV in rooms different from where the
primary household TV is located
28%
It is easier to use than Pay-Per-View or Video-onDemand services from a cable provider
24%
It has a better recommendation system
15%
The user interface is better than the cable TV
14%
Base: Respondents who use at least one paid internet video service
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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6. Paid Internet Viewing by Source
Netflix dominates online video-watching among consumers who watch online video at
least weekly
Do you watch TV shows and/or movies on these paid online video services
on a weekly basis?
(% of respondents who watch online video at least weekly)
76%
35%
Netflix Instant
33%
32%
32%
HBO GO
Hulu Plus
Amazon Prime
Paid on demand
video services
Paid Online Video Service
Base: Respondents who watch online video at least weekly
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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7. Multichannel TV Subscribers
Growth in multichannel video subscribers has not kept pace with TV household growth;
~4% of households are “new” non-subscribers who have emerged in the past 5 years
• Historically, 90% of
occupied TV
households
subscribed to
multichannel TV
Occupied TV Households
(millions)
118.0
110.0
11.1
10%
4.4
11.9
4%
10%
“New” Non-Subscribers
“Traditional” Non-Subscribers
(held at 10%)
Use antenna, watch DVDs only,
don’t care about video, etc.
• Subscribers are now
at 86%— incremental
4% are “new” nonsubscribers
98.9
90%
101.7
86% Multichannel TV
Subscribers
Cable, Satellite, or Telco TV
2008
2013
Source: SNL Kagan, AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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8. Multichannel TV Subscribers
Of non-subscribing households who “care about video,” the majority use online video at
least weekly
Composition of Multichannel TV Non-Subscribers Who “Care About Video”
(% of occupied TV households)
4.9%
1.7%
4.7% of occupied
TV households are
non-subscribers
who watch online
video at least
weekly
3.4%
1.7%
1.3%
4.9%
1.5%
0.4%
Other cord-cutters and
cord-nevers don’t watch
online video weekly (1.9%
of occupied TV households)
"True" Cord-Nevers "True" Cord-Cutter
(never subscribed, (former subscribers who
but care about video)
care about video)
 5.6-7.6%* of TV households are true cord-cutters or cord-nevers (care about video but who watch
video through other means); ~4-5% are driven at least partially by emergence of internet video
 The number of cord-cutters and cord-nevers was approximately the same as in last year’s survey
* Range based on margin of error of survey
Source: 2012 and 2013 AV&Co./Research Now Surveys; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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9. Cord-Cutters’ Reasons for Unsubscribing
Price and value are the main reasons cord-cutters cancelled their subscriptions;
availability of internet video is the third largest driver
To what extent were each of the following important in your decision to
"cut the cord", i.e., stop subscribing to a cable service?
(% of cord-cutters responding “important” and “very important”)
I could no longer afford Cable TV
66%
Cable TV was a poor value
53%
Internet Video was enough for my needs
50%
It was difficult to find good programs and/or
movies on cable TV
42%
Basic Antenna Cable was enough for my needs
35%
I didn't care about live TV (e.g., sports and news)
I didn't care about seeing TV shows as soon as
they were released
My cable TV Provider had poor service
I didn’t have enough time to watch shows or
movies
31%
29%
27%
25%
Base: Cord-cutters who watch video through other means
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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10. Reasons for Maintaining a Cable TV Subscription
Current cable subscribers value access to live news and sports, as well as the ability to
watch new television shows as soon as they are available
Why do you choose to subscribe to cable TV instead of relying only on internet
video for shows, movies, and other television programs?
(% of cable subscribers who agree with statements)
Live news is important to me
74%
I want to watch TV shows as soon as
they are available
66%
Live sports are important to me
I'm open to cancelling cable, but others
in my household want it
59%
28%
Watching TV shows
when they become
available is especially
55+
important to younger
cable subscribers
Age
Under 35
My internet connection is too slow for
video
76%
19%
35+
62%
Base: Current cable TV subscribers
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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11. Broadcast TV Watching
Even with growing online alternatives, the level of TV watching during normal broadcast
time is roughly the same as in 2010
How often do you watch shows on TV during their normal broadcast time?
(% viewing at least weekly)
2010
89%
2013
80%
73%
80%
84%
85%
87%
72%
65%
60%
18-24
25-34
35-44
Age
45-54
55+
Base: All Respondents
Source: 2010 and 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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12. Non-Subscriber Future Plans
36% of non-subscribers expect to subscribe to cable within 5 years, including almost
half of subscribers under 35
What is the likelihood that you or your household will subscribe to cable TV
service five years from now?
(% of non-subscribers that responded “likely” or “very likely”)
53%
46%
32%
33%
27%
18-24
25-34
35-44
Age
45-54
55+
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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13. TV Show/Movie Viewing on Tablets
Tablet video consumption has more than doubled since 2011, driven by increased tablet
ownership; increased usage, especially among older consumers, has also contributed
How often do you watch TV shows and movies on a tablet?
(% viewing at least weekly)
Tablet
Ownership
2013
2011
51%
51%
43%
36%
32%
Watch TV shows
and movies on
tablet weekly
2013
2011
22%
18%
16%
29%
24%
9%
18-24
12%
25-34
26%
7%
35-44
11%
2%
8%
14%
45-54
1%
9%
55+
Age
Base: All Respondents
Source: 2011 & 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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14. TV Show/Movie Viewing on Smartphones
Smartphone TV show and movie watching nearly tripled from 2011 to 2013, driven
primarily by increased usage but also from growth in ownership
How often do you watch TV shows and movies on a smartphone?
(% viewing at least weekly)
73%
68%
66%
Smartphone
Ownership
2013
2011
56%
48%
47%
41%
43%
40%
30%
Watch TV shows
and movies on
smartphone weekly
2013
2011
32%
28%
11%
18-24
20%
13%
5%
25-34
35-44
3%
9%
45-54
0%
4%
55+
Age
Base: All Respondents
Source: 2011 and 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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15. TV Everywhere Awareness by Age
TV Everywhere awareness has increased slightly over the past year, but younger
consumers are still more aware than older consumers
Does your cable TV subscription include access to TV Everywhere?
(% of subscribers with access to TV Everywhere)
No
32%
32%
Don’t
Know
19%
31%
21%
37%
29%
Yes
50%
36%
42%
2012
Yes
47%
35%
18-24
34%
25-34
35-44
33%
45-54
24%
55+
Age
Base: Cable TV subscribers with access to TV Everywhere
Source: 2012 and 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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16. TV Everywhere App Preferences
82% of consumers prefer a single TV Everywhere app over separate apps for each
channel; younger consumers are more open to separate apps than older consumers
If you were using TV Everywhere on your devices, which of these options would be
better for you?
(% of all cable subscribers)
A separate app for
each channel you
subscribe to, each
giving you access to
TV shows from that
specific channel
A single app from
your cable TV
provider that gives
you access to all the
shows from channels
you subscribe to
32%
30%
68%
70%
18-24
25-34
21%
79%
35-44
Age
15%
11%
85%
89%
45-54
55+
Base: Cable TV subscribers
Source: 2013 AV&Co./Research Now Survey; AV&Co. Analysis
Confidential – Do Not Reproduce
21 November 2013
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