GfK Briefing to BASE SVOD Content Consumption Tracking© GfK 2015 | 1 GfK Briefing to BASE SVOD Content Consumption Tracking March 17th 2016

© GfK 2015 | 1

GfK Briefing to BASE

SVOD Content Consumption Tracking

March 17th 2016

© GfK 2015 | 2

Typically, 72% of the population watches something live or as

scheduled on the average day

72%

Source: BARB Daily reach, Live TV, All channels, 18yrs+, Q4, 2015

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A third of us will also watch something timeshifted/ recorded or from

some catch up options on their TV set (eg via Sky/Virgin set top box)

33%

Source: BARB Daily reach, Any timeshifted TV, All channels, 18yrs+, Q4, 2015

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14%

And 14% will watch something using an OTT SVOD service on

the average day

Source: GfK SVOD Content Consumption Tracker, Active Users, All SVOD services, UK, Q4, 2015, Average day

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Our viewing behaviours have changed

• There is so much choice we can’t remember

what’s on, when and on what channel

• We’ve the choice of live/scheduled programmes

and a multitude of options on demand

• We don’t even have to watch on the TV set any

longer

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The media industry is experiencing a revolution

6

TV audience figures are declining, and the sharpest drop is amongst

consumers aged between 4-15 and 16-34. It doesn't mean, though, that video

is dying. In fact, online video is growing: digital viewing already represents 10

per cent of total TV viewing in the UK and that is thanks to young consumers:

"Everyone is migrating from live TV in some degree: video subscriptions has

reached almost 5 million in the UK, with the dominance of Netflix".

Douglas McCabe, CEO, Enders Analysis

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What does this mean for TV

broadcasters, producers, platforms

and distributors?

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• What is the impact of new OTT subscription

video-on-demand services?

• Why do users sign up?

• What are viewers watching and how?

• Is this viewing cannibalising or adding to

traditional TV viewing?

• How are audiences using these services?

• How are these services impacting traditional

business models?

This presents a number of fundamental questions

‘a major milestone in the evolution of video

and home entertainment –

#NetflixEverywhere is as bold as it gets’ Tony Gunarsson, Ovum

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• A continuous measure of audience consumption on SVOD platforms in the UK and USA

• To track what audiences are watching at title level

• To provide additional measures of audience reaction, customer satisfaction and loyalty

• To plug the gap in understanding new ways in which audiences are consuming content

GfK’s SVOD content consumption tracking

study aims to answer some of these questions

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SVOD services in the UK have moved

from niche to mainstream

Source: SVOD – Universe Profiling for OTT Services 2015: 2015 online population – UK total (1,000), 16-34 (283); 2014 online population

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Netflix leads the way in the number of

continuous users

Source: SVOD – Universe Profiling for OTT Services 2015: 2015 online population – UK total (1,000), 16-34 (283); 2014 online population

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Access to more than one service is not

uncommon

Source: SVOD – Universe Profiling for OTT Services 2015: 2015 online population – UK total (1,000), 16-34 (283); 2014 online population

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Measuring audience consumption is not a

simple process!

Recruitment Survey

Profiling questions

Daily diary surveys

Programme/Platform

Codeframe

Coding

Platform validation

Universe profiling End of week

Survey data

Hierarchical dataset

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And this produces a big, hierarchical dataset

In the first 8 months in the UK…….

8,124 56,868 43,139 3,142,728 respondents Diaries completed Programme assets Total minutes

viewed

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Which also delivers some simple numbers

In the first 8 months…….

8,124 56,868 43,139 3,142,728 respondents Diaries completed Programme assets Total minutes

viewed

6:26

Average weekly viewing

per respondent

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What attracts people to SVOD services?

Question: EW1b – Main reason for signing up/using service

Base: SVOD users – Netflix (2,454), Amazon Prime (1,336), NOW TV (619)

To access back catalogue

of TV programmes

To watch original series

made by provider

To access back catalogue

of movies

To obtain free shipping

To access back catalogue

of movies

To access back catalogue

of TV programmes

To access catalogue of

new movie releases

Access provided via 3rd

party

Cheaper than Pay TV

subscription

Each service has a different ‘selling point’ – though access to content is

important for all

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How active are users?

81%

7.5

6:15hrs

64%

6.1

5:25hrs

63%

6.1

5:20hrs

Proportion of Active

Users (i.e. those who

use the service at least

once a week)

Average time spent

viewing service

content (per week)

Average number of

streams (per week)

Question: RS2 – SVOD services used, D1 – Whether any SVOD service used, D4a – SVOD service used; Programme stream information attributed from programme viewing

Base: SVOD users – Total Market (3,259), Netflix (2,454), Amazon Prime (1,336), NOW TV (619) (Q3 figures shown in brackets)

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If Netflix was a channel, how big would it be?

Source: GfK SVOD Tracker, Q4 2015: BARB Weekly reach amongst online adults aged 18yrs+, Q4, 2015

19%

In Quarter 4, 2015

Weekly reach of the UK

online population

6:15 Average minutes watched

per week

29% 18%

1:39 1:34

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What do they view?

69% 63% 56%

29% 35% 41%

2% 2% 3%

TV other

Movies

TV series

% of minutes

viewed

Base: Viewing events – Total market (12,185), Netflix (7,940), Amazon Prime (2,827), NOW TV (1,418) (Q3 figures shown in brackets)

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Title Rights Holder

Service Unique Viewers

(% of active user respondent base) % of Total Streams

Overall Content

Rating

Making a Murderer Netflix 6% 2.9% 9.1

Jessica Jones Netflix 5% 2.6% 9.0

Breaking Bad Sony 4% 2.2% 9.0

Orange is the New Black Netflix 4% 2.1% 8.7

The Man in the High Castle Amazon 5% 2.0% 8.3

Prison Break Fox 2% 1.5% 9.0

Sons of Anarchy Fox 2% 1.4% 8.8

House of Cards (US) Netflix 3% 1.3% 9.2

Marvel's Daredevil Netflix 2% 1.2% 8.6

Luther BBC Worldwide 2% 1.2% 9.1

24 Fox 2% 1.2% 8.9

How I Met Your Mother Fox 1% 1.1% 8.9

Pretty Little Liars Warner Bros 3% 1.1% 9.0

Once Upon a Time ABC Studios 2% 1.1% 9.1

Narcos Netflix 3% 1.1% 8.7

Buffy the Vampire Slayer Fox 1% 1.0% 8.5

The Walking Dead Fox 2% 0.9% 8.7

The Vampire Diaries Warner Bros 1% 0.9% 9.3

American Horror Story Fox 2% 0.9% 9.2

Criminal Minds ABC Studios 1% 0.9% 9.3

Base: SVOD active users – Total market (1,231); UK streams (10,224); UK minutes (525,882)

Top 20 Titles UK – All services

January 2016

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What do users think?

All adults 62% are satisfied with

the service (8-10

aggregate scores where 10

is very satisfied) 63% 72%

Question: EW5c – Using a scale of 1 to 10 where 10 means very satisfied and 1 means not at all satisfied, how satisfied are you with [SERVICE] as a video streaming service provider?

Base: SVOD users – Netflix (2,454), Amazon Prime (1,336), NOW TV (619)

Provides

good value

for money

Good range

& variety of

content

Adds new

titles

frequently

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What is the impact of OTT SVOD on

viewing behaviour?

16% 17% 16% 18% 24% 24%

30% 39%

15%

31% 28% 22% 22% 17% 16% 17% 12%

27%

Recordedcontent

Free catch upprovided bybroadcaster

On-Demandoffered as partof your Pay TV

package

Other contentviewed online

PPVmovies/events

Paid fordownloaded

contents

Live content DVD/Blu-raydisc

owned/rented

Total timewatching TV

Watchingmore

Watchingless

Question: EW10 – To what extent are you viewing/using any of the following now, compared to before you had access to a subscription video streaming service?

Base: SVOD users – Total market (3,259)

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What is the impact on purchase

behaviour?

16% 12% 23% 22% 27%

47% 51%

36%

18% 30%

21% 20% 18% 20%

36%

14%

11%

9% 11% 6% 5%

Buy fewerDVDs

blu-rays

Cancelsubscription topostal rental

service

Purchase lessDTO content

Remove add-onpackages

from pay-TVsubscription

Cancelsubscriptionto premiumchannels

Cancel Pay TVservice

Changebroadband

internet provider

Have done

Definitely/probably will

Won't do

Question: EW12 – Which of the following have you done, or are likely to do in the future, as a result of your use of subscription video streaming services?

Base: SVOD users – Total market (3,259)

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4 key takeaways

Size matters – users sign up for flexible access to the libraries

of content, which they like to be updated frequently. Original

content is also a driver of sign up for Netflix

TV series are the overwhelming choice of viewers – recent

series with multiple episodes drive viewing and value more than

archive

Users are satisfied and churn is low, they are likely to reduce

their spending on other forms of paid for content as a result

SVOD content consumption is now a mainstream activity,

competing for a share of viewing but also adding to the total

time we spend viewing

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Thank You!

March 2016