Savvy users have been cord-cutting or cord-shaving for many years. New data shows why they stream and what they stream -- TV shows and movies. This is not good news for pay-tv or premium cable companies.

1. Augustine Fou- 1 -
Cord-Cutters are
Digital Video Power
Users Dr. Augustine Fou
http://linkd.in/augustinefou
acfou @mktsci .com
May 2014

2. Augustine Fou- 2 -
Author’s Commentary
“The data in slide 3 shows cable companies
losing 3% of their subscribers, most of whom
went to ‘telephone companies.’ It is somewhat
misleading to quote the 0.1% change. While
users have not cut the cord, their consumption is
entirely different when they stream video content
rather than watch linear TV on broadcast or
cable.”

3. Augustine Fou- 3 -
Cord-cutting is Moving Slowly
-3% +14%

4. Augustine Fou- 4 -
Cord-Cutter Streaming Usage
• Cord-cutters stream 10x more than typical cable
subscribers (153GB vs 13GB)
• Cord-cutters stream 10x more hours (100 hrs vs 9 hrs)
Sandvine: Global Internet Phenomenon Report Q1 2014

5. Augustine Fou- 5 -
Why People Stream Video
I can’t find what
I’m looking for
on a licensed site
Source: BusinessInsider Poll April 2014

6. Augustine Fou- 6 -
What People Stream
I stream TV
series and
movies
Source: BusinessInsider Poll April 2014

7. Augustine Fou- 7 -
Reasons for Streaming
Source: IAB May 1, 2013

8. Augustine Fou- 8 -
Streamers Are Picky/Savvy
Source: Harris Interactive via MarketingCharts August 2013

9. Augustine Fou- 9 -
Streamers Watch Less Pay-TV
Source: GfK July 2013 via Marketing Charts

10. Augustine Fou- 10 -
DVR Owners Watch 23m
Source: Nielsen Dec 18, 2013 Source: Netflix
DVR owners watch exactly 23
mins (i.e. skip exactly ALL ads)

11. Augustine Fou- 11 -
Younger Demographics
Watch More TV Over-The-Top

12. Augustine Fou- 12 -
Millennials Watching TV On..
Source: Deloitte via Engadget March 2014

13. Augustine Fou- 13 -
Live Broadcast vs Online TV
Source: Diffusion Group March 2014 via MarketingCharts

14. Augustine Fou- 14 -
http://www.marketingcharts.com/wp/tel
evision/streaming-and-cord-cutting-is-
there-a-link-42101/
Streamers Are Cord-Cutters

15. Augustine Fou- 15 -
http://www.marketingcharts.com/wp/tel
evision/streaming-and-cord-cutting-is-
there-a-link-42101/
Use Netflix vs Pay-TV

16. Augustine Fou- 16 -
YouTube and Facebook
Video is Getting Large Enough

17. Augustine Fou- 17 -
It turns out that cord-cutting isn’t the only threat facing cable channels.
Several of the big ad-supported online video outlets, including Google Inc’s
YouTube, AOL and others, plan this upfront season to target some of the ad
dollars that currently flow to cable channels, industry executives say.
The web video outlets see a vulnerability in second tier cable networks, and to a
lesser extend in the local TV-station market, executives say.
According to multiple media buyers and ad sellers in the Web video industry,
digital media companies are looking to draw direct comparisons between their
audiences and cable TV networks, a match-up Web video outlets think they can
win.
Buyers say Google is likely to be the most aggressive on this front, given
YouTube’s massive size and its young demographics that don’t necessarily
watch a lot of TV. The company has been selling directly against cable
networks, with pitches like “X YouTube net reaches more women than E! or
Awesomeness TV reaches more tweens than ABC Family.”
In one pitch, for instance, YouTube cited Nielsen data from November showing
that it reached 49% of all 18 to 34 year olds, versus 45% for FX, 44% for TBS’
comedies, 41% for Comedy Central and 40% for AMC.
YouTube also thinks it can capture more local broadcast and cable ad dollars
from national advertisers looking to boost spending in certain markets. The
company is targeting automotive and wireless advertisers in particularly, said
executives with direct knowledge of YouTube’s plans.
Loss of Ad Dollars to YouTube
Source: WSJ
March 2014
Don’t forget about
Facebook video ads
which debut at $1 -
$2.5 million a day.
Source: Business
Insider, March 2014

18. Augustine Fou- 18 -
Dr. Augustine Fou – Digital Consigliere
“I advise clients on optimizing
advertising across all channels. When
users are moving away from traditional
TV viewing, advertisers need to find new
ways of reaching them and attracting
their attention.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: https://www.linkedin.com/today/author/84444-augustinefou

19. Augustine Fou- 19 -
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