Devices, Consumption, and the Digital Landscape 2012...ages 18-22; Leading Millennials, 23-29; Gen X, 30-46; Boomers, 47-65; Matures 66-75) • Fielded online by The Harrison Group

Devices, Consumption, and the Digital Landscape 2012Research Study Overview &Executive Highlights

Survey fielded January/February 2012

Copyright © 2012 Deloitte Development LLC. All rights reserved.1

• Co-produced, co-sponsored, co-owned research by Deloitte and theHarrison Group

• Looks at media consumption across device types, with a particular focuson tablets

• Explores some themes unearthed by Deloitte’s annual State of the Media Democracy Study as well as revisits some trends The Harrison Group examined in a previous 2010 study on the topic of device usage and media consumption

• Spans four generations and five distinct age groups — same as those in Deloitte’s State of the Media Democracy Study (Trailing Millennials, ages 18-22; Leading Millennials, 23-29; Gen X, 30-46; Boomers, 47-65;Matures 66-75)

• Fielded online by The Harrison Group from late January to mid February 2012

About our “Devices, Consumption, and the Digital Landscape” Study


• Consumer: 1,890 U.S. Consumers– 1,042 tablet owners; 1,114 Smart Phone owners– Mean age 41; Median age 40

• The survey was fielded to produce a census-representative sample of U.S. consumers, ages 18+.

• Survey oversampled tablet owners for sake of in-depth analysis; all data was weighted to bring device ownership into U.S. population representative proportions

• Business: 1,252 U.S. Businesspeople– Looks at tablet and other device use “at work” — enterprise, SMB, and SOHO,

across industries– 519 tablet owners/users– 322 IT leadership and staff– 620 people in the content creation, content distribution and publishing

industries

Our research is based on a survey of both US consumers and US business people

Representative Findings


Among All Respondents Total

Trailing Millennials

(%)

Leading Millennials

(%)Xers(%)

Boomers (%)

Matures (%)

Desktop computer 49 58 79 82 89

Laptop/Netbook 82 85 76 67 66

Multimedia smartphone 46 65 58 39 29

Multimedia handheld device 48 37 33 19 12

Tablet device 19 28 30 27 20

Dedicated e-reader 29 20 28 22 25

Flat-panel high-definition TV 62 69 68 72 80

Digital video recorder 41 49 50 50 59

27% of the US population own tablets and about half (49%) own smartphones

Which of the following devices do you currently own or use?

75%

74%

49%

29%

27%

25%

70%

50%

49%

Minimum Value

Maximum ValueMidpoint Value =

50 Percentile

27%


Preference for tablets over laptops increases across generations

Q. You said you own both a laptop and tablet device. Which device is more important to you — that is, which device could you least do without?(Among respondents who own both a laptop and a tablet)

TotalTrailing

Millennials (%)Leading

Millennials (%) Xers (%) Boomers (%) Matures (%)

Laptop 68 92 75 67 65 60

Tablet 32 8 25 33 35 40

825 33 35 40

9275 67 65 60

TrailingMillennials

LeadingMillennials

Xers Boomers Matures

Tablet Laptop

Average6832


In head-to-head ratings of importance, tablets rank well below both smartphones and laptops

Which device is more important to you overall?

26%74%

68%32%

Tablet vs. Laptop(Own both Tablet/Laptop)

LaptopTablet48% 52%

Laptop vs. Smartphone(Own both Laptop/Smartphone)

SmartphoneLaptop

Smartphone vs. Tablet(Own both Smartphone/Tablet)

TabletSmartphone


About half (49%) of all consumers intend to own a tablet by 2013

• Intent to acquire mobile devices outpaces laptops

• Tablets remain the fastest growing tech device

• Two-thirds of all consumers will likely own a smartphone by 2013

• eReaders appear poised to become more a niche device25%

49%

27%

74%

13%

16%

22%

9%

62%

35%

51%

17%

eReader

Smartphone

Tablet Device

Laptop Computer

OwnersPlan to purchase (next 12 months)No interest in purchasing

Device Ownership and Intent to Purchase


32%

8%

25%

33%

36%

68%

92%

75%

67%

64%

Total

Trailing Millennials

Leading Millennials

Xers

Boomers/Matures

Tablet Laptop

74%

87%

69%

78%

68%

26%

13%

31%

22%

32%

Smartphone Tablet

Trailing Millennials are particularly driven by capabilities of the laptop relative to tablets

Which device is more important to you overall?

Tablet vs. Laptop(Own both Tablet/Laptop)

Smartphone vs. Tablet(Own both Smartphone/Tablet)


Q. You mentioned you currently own a tablet device, where did you purchase your tablet from?

Our research provides further evidence of the “showrooming” effect in retail channels

Tablet owners that reported purchasingtablets in Brick and Mortar stores153

percent

16% of intending tablet purchasers will likely research tablets at brick and mortar stores, but

will likely purchase a tablet through an

online channel

There is a disconnect between where consumers are likely to research tablets and where they will ultimately buy them

Portion of customers who intend to purchase a tablet that will likely research at a Brick and Mortar store163

percent

Portion of customers who intend to purchase a tablet at a Brick and Mortar store147

percent

1 Includes manufacturer’s store, national chain electronics retailers, regional chain electronics retailers, local independent electronics retailer, a telecom carrier's stores, and other types of retailer


Tablets are considered primarily consumption, not creation, devices, regardless of demographic.

Tablets for consumption, not creation…at least not yet

This trend appears consistently across most generations, with matures least interested in content creation

Only 24% of 1890 respondents are extremely interested or very interested in using a tablet for creation of content — the lowest ranked of all tablet activities

Only 17% of 1890 respondents are extremely interested or very interested in using a smartphone for creation of content — the third lowest ranked of all smartphone activities; Interest in each consumption activity consistently ranked higher on tablets than on smartphones

But even the consumption desire begins to diminish with screen size

The primary use of a tablet continues to be consumption — not creation —of content

No generation has more than 21% interest (net “extremely” / “very”) in using tablets for content creation; Millenials have highest interest


• The vast majority of consumers view the complete transition to digital formats as inevitable

• Attitudes, expectations and behavior are continuing to shift

Consumers habits and attitudes towards digital content are changing rapidly

80%

69%

59%

59%

85%

83%

64%

49%

“If I pay for a print newspaper or magazine, I should be able to read it

digitally for free”

“It seems inevitable that all forms of publications will eventually be

produced almost exclusively in a digital format”

“If I could select my own television content and have it streamed to a

digital device for viewing either on the device or on my home TV, I would

give up my cable or satellite subscription”

“When travelling, I typically bring several different magazines

with me to read”

% Agree Strongly/SomewhatIn just 2 years, the

number of respondents who believe that all

publications will eventually be produced almost exclusively in a digital format increased

by 14 percentage points.

20122010

Key


The “Digital Elite” (owners of a laptop, smartphone and tablet) has grown from 4% to 20% in the last 2 years

Device Ownership(as % of population)

Laptop74%

Smartphone49%

Tablet27%

The “Digital Elite”

Laptop

Smartphone

Tablet

“Digital Elite”• 73% of all tablet owners• 40% of smartphone owners• 39% of eReader owners

(meaning they own 4 devices)


Tablet Use While Watching TV

10%

23%

20%

31%

14%2%

More than half (53%) use their tablets while watching TV at least half the time they watch

All of the time

(100%)

Most of the time (>75% of the

hours I spend watching

television)

Occasionally (less than 50%

of my TV viewing time)

I never watch TV

Greater than half of the

time 50-75% of the time

I never use my tablet

while watching TV)

• Tablets are nearly universally viewed as entertainment devices, and 43% consider them more important than their television

“I use my tabletas an entertainment device”

90%“My Tablet has become a

more important entertainment device to me than

my television at home”

43%


Tablets are predominantly communication and media “grazing” devices

83%

50%

45%

43%

42%

37%

31%

10%

3%

Email / Internet

Social Networking

Games

Newspapers /Magazines

Digital Books

Shopping / Ads

Movies / TV

Children's Books

Creating DigitalPublications

Browsing the Internet: 75%

Using email: 68%

Digital newspapers: 31%

Digital magazines: 27%

Digital newsletter: 18%

Buying products throughthe Internet: 31%

Looking at advertising: 12%

Watching TV shows: 24%

Watching movies: 22%

Children reading: 8%

Reading to children: 5%

Activities Engage in Regularly on Tablet


Consumers appear to expect to be spending more next year for only smart phone voice/data plans

Cellular/wireless phone/data service for smartphone

Wireless data plan for tablet device

Broadband Internet

Paid streaming video (e.g., Hulu Plus, Netflix)

Cable TV (via cable company)

Cellular/wireless phone for basic cell phone

Satellite TV service

DVD/Blu-ray discs by mail service

Home phone

Cable TV through telephone company 6%

6%

7%

7%

7%

8%

10%

11%

12%

15%

65%

74%

67%

67%

74%

69%

66%

79%

67%

76%

30%

20%

26%

26%

19%

23%

24%

10%

21%

9%

Expect to spend more Same Expect to

spend lessCurrently

UseDon’t Use, Plan to Next 12 mos.

54% 12%

16% 15%

83% 4%

31% 12%

49% 4%

62% 4%

30% 6%

28% 10%

62% 2%

18% 5%


Tablets: Personal / Work Overlap:Total Tablet Usage:

Q. TABLETS: Respondents using the tablet device for personal use, for work, or for both?

Half of tablet owners are currently employing theirdevice in the work place, but few use it solely for work

Personal Use: 93%

Work Use: 54%

PersonalOnly: 46% Work Only:

7%

Both Personal& Work: 47%


Use of tablet at work lags well behind desktops, laptops, and smartphones

Personal vs. Work Use(Among owners of each device)

6% 4% 4% 7% 6% 7%

32% 38% 41%

15% 24%11%

62% 58% 55%

78%70%

82%

38% 42% 45%

22%30%

18%

Both work and personal use Only use for workPersonal use only

Desktop Computer

Laptop Smartphone Multimedia HH Device

TabletDevice

Dedicated eReader


Among business respondents with intent to acquire a tablet innext 12 months (Among Tablet Non-Owners)

TotalCompany

size — under $50M

Company size $50–$99MM



Company size over

$1B

I plan to purchase a tablet device instead of a buying new desktop or laptop computer next year

14 13 15 22 18 14

I plan to purchase a tablet device and plan to purchase a new desktop or laptop computer next year

19 20 18 11 12 22

I plan to purchase a tablet device next year but that has no bearing on my decisions regarding laptop/desktop purchases

61 62 65 63 65 51

I plan to acquire a tablet device within the next year when my company issues me one

6 5 3 4 6 12

Few business users who intend to use tablets at work (but don’t currently) plan to wait for their company to provide one for them

Q. You mentioned that you are planning to acquire a tablet device within the next year. Which of the following statements best describes your intentions regarding tablet and desktop/laptop purchases?

Minimum Value

Maximum ValueMidpoint Value =

50 Percentile


Publishers’ perspectives are especially misaligned with customer expectations for digital reading

• Consumers, publishers, and marketers believe that more content will be read digitally… but, consumer expectations outpace publisher/marketers by 14-17%

% of respondents that believe more of each content type will be read digitally than are read in traditional printed paper form within two years

67%Newspapers

Books

Magazines

Tablet OwnersPublishers / Marketers

50%

35% 54%

43% 57%


Contact infoEric Openshaw

Vice ChairmanU.S. Technology, Media, and Telecommunications Industry LeaderDeloitte Consulting LLP+1 714 913 [email protected]@eopenshaw

Phil Asmundson

Vice ChairmanU.S. Media and Telecommunications Sector Leader+1 203 708 [email protected]@pasmundson

Jim McDonnell

PrincipalU.S. Consulting Media & Entertainment Sector LeaderDeloitte Consulting LLP+1 917 940 [email protected]


Contact info (continued)Rob Underwood

Senior Sector Specialist — Media & EntertainmentDeloitte Consulting LLP+1 917 754 [email protected]@brooklynrob

Nicole Gallagher

Senior Manager - Media & Entertainment Deloitte Consulting, LLP+1 215 740 [email protected]

Greg Merchant

Senior Manager - Media & Entertainment Deloitte Consulting, LLP+1 847 638 [email protected]

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Devices, Consumption, and the Digital Landscape 2012...ages 18-22; Leading Millennials, 23-29; Gen X, 30-46; Boomers, 47-65; Matures 66-75) • Fielded online by The Harrison Group

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