State of OTT An in-depth look at today s over-the-top content consumption and device usage Mike Rich VP of Emergent Products Andrew Lipsman SVP of Marketing & Insights For info about the proprietary technology used in comscore products, refer to http://comscore.com/patents comscore, Inc. Proprietary. 1
Agenda OTT Market Overview The Connected Living Room Household Viewing Segments OTT Content Providers Key Takeaways Q & A comscore, Inc. Proprietary. 2
comscore Total Home Panel Behaviorally measuring all internet connected devices in a household comscore, Inc. Proprietary. 3
About this Analysis OTT (over-the-top) is defined as using apps to stream video content via the internet to a television set. This presentation leverages two data sources unique to comscore: comscore OTT Intelligence measures over-the-top streaming content consumption across TV-connected devices. comscore Connected Home delivers insight into the usage of all internet- or router-connected devices in the home including IoT. The foundation of these two data sources is the comscore Total Home Panel, a true single-source research platform designed to measure the realities of cross-platform media consumption today. Total Home Panel methodology and information: Single-Source Behavioral Measures 12,500 Homes and 150,000+ Devices Geographically Distributed in the U.S. Weighted to U.S. homes with Wi-Fi (93M homes) Measures consumption across 52 OTT services which account for the overwhelming majority of OTT usage Key Contributors to Webinar: Brandon Burr Director of Emergent Products Susan Engleson Sr. Sales Director of Emergent Products Farani Haynes Manager, Digital Media Insights Adam Lella Sr. Analyst, Marketing Insights Autum Molay Product Marketing Manager of TV/Cross-Platform Products comscore, Inc. Proprietary. 4
OTT Market Overview comscore, Inc. Proprietary. 5
OTT viewing has become a mainstream media behavior in the U.S. 51 MM Homes used OTT in April 54% Reach Amongst homes with Wi-Fi The average home viewed 49 Hours of OTT content across the month this was spread across 15 average viewing days Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 6
Total Households (MM) The OTT market is steadily growing, with millions of more OTT viewing households coming online over the past several months Total OTT Household Penetration Trend 55 50 49 49 48 51 51 45 44 46 40 35 30 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 Source: comscore OTT Intelligence, U.S., October 2016 April 2017 comscore, Inc. Proprietary. 7
Household Share of Daily TV Viewing OTT has the same primetime as Live TV with viewing peaking in the evening hours between 8-11pm Household Share of TV Viewing Type by Daypart 9% 8% Live TV Over-the-Top (OTT) 7% 6% 5% 4% 3% 2% 1% 0% Source: comscore TV Essentials & Total Home Custom Reporting, U.S., December 2016 comscore, Inc. Proprietary. 8
Daily Hours per Household OTT viewing spikes on weekends as viewers spend more time binge-watching their favorite content 5.0 Over-the-Top Viewing Hours by Day 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 OTT Viewing An additional 25 minutes of average daily viewing per household on weekends 0.5 0.0 Weekend Weekend Weekend Weekend Weekend Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 9
Index OTT streaming is not a smaller household phenomenon it s actually more prevalent in larger households 150 Household Size Index of OTT Streaming HHs vs. Wi-Fi HHs 140 130 120 110 100 111 123 128 90 80 70 60 81 85 50 HH Size: 1 HH Size: 2 HH Size: 3 HH Size: 4 HH Size: 5+ Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 10
Index When isolated to homes without a pay-tv subscription, OTT viewing skews towards smaller households 150 Household Size Index of Cordless OTT HHs vs. Total OTT Streaming HHs 140 130 139 120 110 100 90 80 70 99 96 85 82 60 50 HH Size: 1 HH Size: 2 HH Size: 3 HH Size: 4 HH Size: 5+ Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 11
The Connected Living Room comscore, Inc. Proprietary. 12
The modern living room experience features an expanding universe of connected devices, from Digital to OTT to the Internet of Things 90% 89% Connected Home Device Penetration Among U.S. Wi-Fi Households Media Devices 64% 40% 30% 28% 25% 7% 7% 7% 3% Computer Smartphone Tablet Streaming Box/Stick Smart TV Game Console DVR / Set Top Box* Internet Blu- Ray Player Smart Speaker Wearables Home Energy DIGITAL OTT IoT Source: comscore Connected Home, U.S., April 2017 * DVR / Set Top Boxes only include those that are internet-enabled comscore, Inc. Proprietary. 13
Streaming sticks/boxes and smart TVs are the two most popular OTT streaming devices Streaming Sticks/Boxes 38 MM U.S. HHs with this device 73% of these HHs used their streaming stick/box to stream OTT Smart TVs 28 MM U.S. HHs with this device 63% of these HHs used their smart TV to stream OTT Source: comscore Connected Home and OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 14
Streaming box and stick devices are propelling the OTT category forward, with Roku leading Amazon, Google and Apple in device penetration TV Streaming Boxes/Sticks: Penetration of U.S. Wi-Fi Households 16% 14% 8% 6% Source: comscore Connected Home, U.S., April 2017 comscore, Inc. Proprietary. 15
The smart TV market is led by Samsung and Vizio, each accounting for approximately 1/3 rd of the market share Share (%) of Smart TVs by OEM in U.S. Wi-Fi Households 3% 8% 5% 4% 33% 7% 10% 30% Source: comscore Connected Home, U.S. April 2017 comscore, Inc. Proprietary. 16
Household Viewing Segments comscore, Inc. Proprietary. 17
More than 1/3 rd of the OTT audience is cordless and doesn t subscribe to pay-tv, with half of those being streaming-only households Over-the-Top (OTT) Households by TV Service Type Cordless 34% Streaming-Only 18% Streaming + Cordless Antenna 16% Cable 44% Satellite 22% Source: comscore OTT Intelligence, U.S., April 2017 * Households that use an antenna in addition to their cable or satellite services are included in those respective shares. comscore, Inc. Proprietary. 18
Streaming-only households are more likely to use streaming boxes/sticks and less likely to use Smart TVs Device Penetration among OTT Streaming Households 66% Total Streaming HHs Streaming-Only HHs 54% 33% 34% 35% 28% 7% 6% 4% 1% Streaming Box/Stick Game Console Smart TV Internet Blu-ray Player DVR / Set Top Box Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 19
Streaming-only households are more intense viewers of all four major OTT content services Viewing Hours per Month 35.6 Total Streaming HHs Streaming-Only HHs 36.8 26.9 28.9 16.9 18.8 10.7 13.5 Netflix YouTube Amazon Video Hulu Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 20
Cordless viewers can be pay-tv cord-cutters or cord-nevers and have different viewing behaviors Cordless Cord-Cutter Cord-Never Streaming + Cordless Antenna Streaming-Only Streaming + Cordless Antenna Streaming-Only comscore, Inc. Proprietary. 21
Index Single-person households are the most likely to be both cord-cutters and cord-nevers 150 140 130 148 Household Size Index of Cordless HHs vs. Total OTT Streaming HHs Cord-Never HHs Cord-Cutter HHs 120 124 110 100 111 90 80 94 96 90 88 85 86 87 70 60 50 HH Size: 1 HH Size: 2 HH Size: 3 HH Size: 4 HH Size: 5+ Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 22
Index Income is a key determinant of cordless behavior, and especially significant among cord-never households 200 180 Household Income Index of Cordless HHs vs. Total OTT Streaming HHs Cord-Never HHs Cord-Cutter HHs 160 171 140 120 100 80 60 40 119 115 106 111 80 84 87 63 96 20 - Under $40K $40K - $59,999 $60K - $74,999 $75K - $99,999 $100K+ Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 23
Cordless households naturally stream more content than the average OTT household, but cord-cutters stream significantly more than cord-nevers OTT Viewing Hours per Month by Viewing Segment 81 49 61 Total OTT HHs Cord-Never HHs Cord-Cutter HHs Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 24
Cord-cutters are more intense viewers across most major streaming services OTT Viewing Hours per Month Total OTT HHs Cord-Never HHs Cord-Cutter HHs 27 35 38 29 32 36 23 17 18 11 14 12 Netflix YouTube Amazon Video Hulu Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 25
OTT Content Providers comscore, Inc. Proprietary. 26
The four major OTT streaming services account for nearly 80% of viewing time for OTT households Share (%) of Total OTT Viewing Hours Other 21% 40% 7% 14% 18% Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 27
Avg. Monthly Viewing Hrs. per HH Netflix leads the major over-the-top streaming services in household penetration, but trails Hulu for the most streaming hours per household 35.0 Selected Over-the-Top (OTT) Streaming Services by Wi-Fi Household Penetration & Engagement 30.0 25.0 20.0 15.0 10.0 5.0 0.0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Wi-Fi Household Penetration Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 28
All four major OTT streaming services average 2+ hours of usage per viewing day, while Netflix viewers use the service on the most regular basis Key Engagement Metrics for Selected Over-the-Top (OTT) Streaming Services Monthly Viewing Days per Household Hours per HH per Viewing Day 12.3 9.9 8.1 5.5 2.9 2.2 2.1 2.0 Netflix Hulu YouTube Amazon Video Hulu Netflix YouTube Amazon Video Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 29
3 out of every 4 OTT households watch three or fewer OTT content services per month, with Netflix the overwhelming choice among single-app households 30% 74% 26% 18% Number of OTT Apps Viewed per Household Half of single-app HHs watch 1 out of 4 watch 11% 6% 3% 2% 2% 1% 1% 1 2 3 4 5 6 7 8 9 10+ Source: comscore OTT Intelligence (custom), U.S., April 2017 comscore, Inc. Proprietary. 30
Netflix is viewed in 3 out of every 4 OTT households Homes that view OTT content 74% of OTT homes watch Netflix 26% of OTT homes do not watch Netflix Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 31
Some services are doing better than others at attracting a Netflix free audience 26% 31% % of OTT Audience NOT Watching Netflix OTT 26% 25% 15% 15% Total OTT Households Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 32
While Netflix has significant overlaps with most other OTT streaming services, Amazon and YouTube have modest household audience duplication with each other 27.4M 18.3M 9.1M 7.6M 16.7M Total YouTube OTT Households YouTube-Only Households Cross-Over Households Amazon-Only Households Total Amazon OTT Households Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 33
Netflix drives the majority of OTT viewing on Blu-rays and smart TVs, while viewers on streaming sticks/boxes are more likely to spread their attention across multiple apps Netflix Share (%) of OTT Viewing Hours by Device 63% 57% 40% 43% 38% 26% 26% Total OTT Internet Blu-ray Player Smart TV Amazon Fire Devices Apple TV Roku Google Chromecast Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 34
OTT Household Reach Index There are clear brand affinities between OTT content providers and streaming devices in OTT households Streaming Service OTT Household Reach Index by Streaming Box/Stick 250 Netflix YouTube Amazon Video Hulu 200 213 150 178 154 100 50 110 93 128 123 101 92 95 129 55 121 109 111 78 0 Source: comscore OTT Intelligence, U.S., April 2017 * Data represents streaming in households with each respective device, not streaming directly from that device. comscore, Inc. Proprietary. 35
Skinny Bundles are beginning to gain traction in U.S. households 3.1 MM U.S. Skinny Bundle HHs Skinny Bundle HHs Watch 5.3 Hours of Skinny Bundle Content per Viewing Day 91% of Skinny Bundle Homes Use a Streaming Stick/Box is the Most Popular Skinny Bundle in More Than 2 Million Homes Source: comscore OTT Intelligence, U.S., April 2017 * Skinny Bundle HHs defined as viewing Sling, Playstation Vue or DirecTV Now. comscore, Inc. Proprietary. 36
Skinny Bundles account for more than half of OTT viewing time in Skinny Bundle households Skinny Bundle Households: Share (%) of Total OTT Viewing Time Other 3.2% 9.0% 7.1% Skinny Bundles 9.0% 54.6% 17.0% Skinny Bundles Netflix Hulu YouTube Amazon Video Other Source: comscore OTT Intelligence, U.S., April 2017 * Skinny Bundle HHs defined as viewing Sling, Playstation Vue or DirecTV Now. comscore, Inc. Proprietary. 37
As replacements for traditional pay-tv, Sling, Playstation Vue and DirecTV Now boast extremely high engagement on a per household basis Monthly OTT Hours Viewed per Household 57 69 81 27 29 11 17 Amazon Video YouTube Netflix Hulu Playstation Vue Sling DirecTV Now Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 38
Skinny Bundle households are more likely to watch content on the major OTT content services, especially Amazon Video and Hulu OTT Service Penetration Among U.S. Wi-Fi Households 75% 74% Skinny Bundle HHs Total OTT HHs 57% 54% 43% 33% 40% 23% Netflix YouTube Amazon Video Hulu Source: comscore OTT Intelligence, U.S., April 2017 * Skinny Bundle HHs defined as viewing Sling, Playstation Vue or DirecTV Now. comscore, Inc. Proprietary. 39
More than 10 million households watch over-the-top network TV apps, but those apps account for a modest share of viewing time 10.1 MM HHs That View Network TV Apps via OTT TV Network App Households: Share (%) of Total OTT Viewing Time 7% 14% 19% 14% 29% Network TV Apps Netflix Hulu YouTube Amazon Video All Other 16% Source: comscore OTT Intelligence, U.S., April 2017 * Network TV App definition excludes premium networks such as HBO and Showtime and Skinny Bundles such as Sling comscore, Inc. Proprietary. 40
Cordless and streaming-only households are more reliant on premium channel content than the average OTT home Household Reach of Premium Channel Apps by Segment 10.8% 12.0% 8.0% All OTT HHs Cordless HHs Streaming-Only HHs Source: comscore OTT Intelligence, U.S., April 2017 comscore, Inc. Proprietary. 41
Key Takeaways comscore, Inc. Proprietary. 42
KEY TAKEAWAYS 1 OTT has become a mainstream behavior, led by well-known content services 2 OTT consumption patterns depend significantly on household profile 3 The next wave of content options will shape the landscape for years to come 51 million homes More than half of U.S. homes with a Wi-Fi connection Households stream an hour and 40 minutes per day Netflix is the leader in penetration and total engagement YouTube, Amazon and Hulu all comprise a strong second tier 1/3 rd of OTT households are cordless and 52% of those are streaming-only Cord-cutter HHs are the most intense viewers of OTT content at 81 hours per month Cord-never HHs view an above average 61 hours per month OTT viewing skews to 3+ person HHs overall, but to 1 person HHs when cordless Skinny bundle services such as Sling have incredibly high engagement per household If these services expand their reach, they can become major platforms for audience attention Network TV apps are beginning to penetrate OTT households How they transition to the medium might determine the future of TV comscore, Inc. Proprietary. 43
comscore Total Home Panel : Capture device usage and content consumption across the connected home. OTT Intelligence Connected Home Custom Reports & Raw Data Feed Measures over-the-top streaming content consumption across TVconnected devices. Delivers insight into the usage of all internet- or router-connected devices in the home including IoT. Provides unparalleled access to the complete Total Home Panel dataset for custom analyses. To learn more, visit: comscore.com/totalhome comscore, Inc. Proprietary. 44