Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

7 predictions about the future of media

8,414 views

Published on

Business Insider research

Published in: Internet

7 predictions about the future of media

  1. 1. Providing in-depth insight, data, and analysis of everything digital. BI Intelligence 7 PREDICTIONS ABOUT THE FUTURE OF MEDIA
  2. 2. 1. DIGITAL WILL INHERIT THE EARTH
  3. 3. DIGITAL MEDIA CONSUMPTION IS GROWING, EVERYTHING ELSE IS SHRINKING US Consumer Media Consumption Share Source: eMarketer 43.2% 40.9% 14.0% 6.6% 5.8% 35.2% 12.0% 2.9% 3.3% TV Radio Print Other 2011 2012 2013 2014 2015 Desktop/laptop Digital 30.0% Mobile
  4. 4. And averages do not tell the whole story…
  5. 5. THE SHIFT IS GENERATIONAL Top 5 Media Mentions Among All Adults, 2013 Source: Ofcom 0 20 40 60 80 100 Total Aged 16-24 Aged 25-34 Aged 35-44 Aged 45-54 Aged 55-64 Aged 65-74 Aged 75+ Watch TV Read newspapers/ magazines Listen to the radio Go online on a computer/ laptop/netbook/tablet Use a smartphone
  6. 6. GENERATIONS HAVE A PREDICTABLE LIFE CYCLE… Source: Goldman Sachs
  7. 7. •  First digital native generation(s) •  Already 45% of population and largest share of earners •  Profoundly different media habits MILLENNIALS AND GEN Z
  8. 8. 26 16 0 5 10 15 20 25 30 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Hours spent 18-24 TV VIEWING DOWN ~30% IN 4 YEARS Traditional TV* Viewing Trends Among 18-24 Year-Olds Weekly time spent in hours, based on total 18-24 population *Traditional TV refers to all live + DVR/time-shifted TV viewing during the quarter. Source: Nielsen
  9. 9. Meanwhile…
  10. 10. DIGITAL MEDIA CONSUMPTION GROWING EVERY YEAR, ESPECIALLY MOBILE Source: comScore Media Metrix Multi-Platform & Mobile Metrix; US, Total Audience 476,553 480,967 550,522 409,847 621,410 778,954 77,081 97,440 118,299 Jan-13 Jan-14 Jan-15 Total minutes (MM) Desktop Mobile App Mobile Browser MOBILE TIME SPENT Growth In US Digital Media Time Spent
  11. 11. MILLENNIALS CHECK THEIR PHONES EVERY 10 MINUTES Source: Kana Software
  12. 12. Source: Zogby Analytics, cited by KPCB (Mary Meeker – LinkedIn slideshare) THEY KEEP THEM IN REACH 24 HOURS A DAY My smartphone never leaves my side, night or day 87.0% 12.0% 2.0% Agree Disagree Not sure
  13. 13. Source: Zogby Analytics, cited by KPCB (Mary Meeker – LinkedIn slideshare) THEY CHECK THEM FIRST THING IN THE MORNING When I wake up, the first thing I do is reach for my smartphone 80.0% 18.0% 2.0% Agree Disagree Not sure
  14. 14. So here’s a glimpse at the past, present, and future of media…
  15. 15. THE PAST (~2000): 3% DIGITAL Source: Ofcom 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Smartphone Computer/laptop/tablet Radio Print TV
  16. 16. THE PRESENT (~2015): 40% DIGITAL Source: Ofcom 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Smartphone Computer/laptop/tablet Radio Print TV
  17. 17. THE FUTURE (~2030): 80%+ DIGITAL Source: Ofcom 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Smartphone Computer/laptop/tablet Radio Print TV
  18. 18. 2. SUBSCRIPTIONS FOR THE WIN!
  19. 19. Remember when pundits said digital content had to be free because no one would ever pay?
  20. 20. Oops.
  21. 21. 4.0 4.8 5.8 7.3 9.2 11.5 2014 2015E 2016E 2017E 2018E 2019E Billions USD STREAMING VIDEO SUBS CLIMBING FAST Streaming Video Subscription Revenue US Note: Includes video services that stream long-form TV and movie length content (e.g. Netflix and Hulu). Does not include short-form video content services (e.g. YouTube).
  22. 22. 8.7 11.4 14.0 16.5 18.7 20.6 2014E 2015E 2016E 2017E 2018E 2019E Billions MUSIC SUBS ARE CLIMBING FAST Streaming Music Paid Subscribers US Source: BI Intelligence estimates based on historical data from the RIAA
  23. 23. AdverZsing SubscripZons $- $20 $40 $60 $80 $100 $120 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Millions EVEN “PRINT” SUBS ARE CLIMBING FAST New York Times Digital Revenue Global Source: The New York Times
  24. 24. The new pundit story is that there’s one right model — subs or ads
  25. 25. The truth is that both work, as do a la carte sales.
  26. 26. Most media companies have dual revenue streams.
  27. 27. “FREEMIUM” IS OFTEN THE BEST APPROACH Paid Digital Subscribers As % Of Total Digital Users Source: BI Intelligence estimates 25% 22% 21% 5% 5% 3% 2% 0% 5% 10% 15% 20% 25% 30% SpoZfy Hulu WhatsApp Pandora Match Group NYT LinkedIn
  28. 28. 3. (NATIVE) DIGITAL ADVERTISING WILL CONTINUE TO THRIVE
  29. 29. The best definition of “native ads”…
  30. 30. Ads that fit the way content and stories in the medium are consumed. “NATIVE ADS”
  31. 31. In digital, “search” and “scroll” are the dominant ways content is consumed.
  32. 32. BEHOLD THE POWER OF NATIVE DIGITAL ADS Note: Based on GAAP revenue. Source: Company Filings, BI Intelligence estimates Google Facebook Yahoo AOL Twiber $0 $5 $10 $15 $20 $25 Billions Digital Advertising Revenues Global
  33. 33. “Read, watch, and listen” are also digital formats.
  34. 34. But the experience is different than in legacy media.
  35. 35. Native digital brand ads will increasingly take advantage of the digital difference.
  36. 36. 4. THE EXISTENTIAL CRISIS OF AD BLOCKING WILL RESOLVE ITSELF — BUT CAREFUL WHAT YOU WISH FOR
  37. 37. AD BLOCK USAGE IS RISING Source: Adobe, PageFair 21 30 39 54 121 144 181 198 Jan 10 Jun 10 Jan 11 Jun 11 Jan 12 Jun 12 Jan 13 Jun 13 Jan 14 Jun 14 Jan 15 Jun 15 Adblock Monthly Active Users In Millions
  38. 38. ESPECIALLY AMONG MILLENNIALS… Share Of Global Internet Users Who Have Blocked Ads In The Past Month, By Age Source: GlobalWebIndex 35% 31% 24% 22% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 16-24 25-34 35-44 45-54 55-64 urce: GlobalWebIndex
  39. 39. AND TECHIES Note: Estimated to nearest 5% increment Source: PageFair 30% 25% 25% 20% 20% 20% 15% 15% 10% 10% 10% 5% Games Technology Comics Adult Entertainment Sports News Business Lifestyle Local Finance Travel Ad-Block Usage Rates, By Vertical Global
  40. 40. There is a lot of self-interested finger-pointing, moralizing, and rationalizing going on — from all parties.
  41. 41. If all ads are blocked, most free content will cease to exist. ONE THING IS CLEAR…
  42. 42. So what will happen?
  43. 43. Quality will improve!
  44. 44. Publishers, platforms, and advertisers will focus more on user experience and choice.
  45. 45. People will choose to view ads from, and/or subscribe to, publishers and platforms they like.
  46. 46. These decisions will not all be voluntary.
  47. 47. 5. THE NEXT BIG PLATFORM IS…
  48. 48. As smartphones get boring, everyone is hunting for the next big platform.
  49. 49. Many candidates have been suggested — glasses, watches, cars, virtual reality…
  50. 50. None of these will be the next big platform.
  51. 51. Smart glasses flopped.
  52. 52. Smartwatches haven’t entirely flopped, but no one will be reading, watching, or listening to media on them anytime soon.
  53. 53. Cars won’t become media and communications platforms — other platforms will be used inside them.
  54. 54. VR is promising, but it’s still too early.
  55. 55. VR INSTALLED BASE STILL SMALL Estimated Global Virtual Reality Headset Shipments Source: BI Intelligence estimates, 2015 - 5 10 15 20 25 30 2015E 2016E 2017E 2018E 2019E 2020E Shipments (Millions)
  56. 56. •  Complicated to use •  Screen resolution low •  Display often nausea-inducing •  Prices steep AND EXPERIENCE STILL LEAVES MUCH TO BE DESIRED
  57. 57. Messaging apps! SO THE NEXT BIG PLATFORM WILL BE…
  58. 58. Source: Salesforce MESSAGING IS AT THE HEART OF THE MOBILE EXPERIENCE Smartphone Activities Performed At Least Once Each Day 24% 30% 43% 46% 57% 62% 75% 76% 90% 91% Gecng direcZons Watching videos or movies Reading Listening to music Playing games Gecng news alerts Social networking Searching on the internet Text messaging Accessing email
  59. 59. SOCIAL NETWORKS ARE BIG… Source: Companies, BI Intelligence estimates Monthly Active Users Global 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Millions Top 4 Social Networking Apps
  60. 60. BUT MESSAGING APPS ARE ALREADY BIGGER Source: Companies, BI Intelligence estimates 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Millions Top 4 Social Networking Apps Top 4 Messaging Apps Monthly Active Users Global
  61. 61. 0 100 200 300 400 500 600 700 800 900 1000 WhatsApp Messenger WeChat Viber LINE Snapchat Tango Kik KakaoTalk Monthly Active Users Global, Q3 2015 THE TOP 4 HAVE ALMOST 3 BILLION USERS Source: Companies, BI Intelligence estimates
  62. 62. FACEBOOK OWNS TWO — PLUS INSTAGRAM Facebook Messenger Monthly Active Users Global Source: Company, BI Intelligence estimates 0 100 200 300 400 500 600 700 800 900 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Millions
  63. 63. SNAPCHAT HAS 200 MILLION AND COUNTING 0 50 100 150 200 250 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Estimated Snapchat Monthly Active Users Global, millions Source: Companies, BI Intelligence estimates
  64. 64. YOU CAN DO EVERYTHING IN THESE APPS Calls Chat GIFs Games SZckers VoIP Taxi E-commerce Music Video Payments URL Bar / Search UZliZes QR Codes
  65. 65. GENERATION DIGITAL IS NUTS ABOUT THEM % Of Smartphone Owners Who Use Messaging Apps US Source: Pew Research Center, March 17-April 12, 2015 49% 37% 24% 18-29 30-49 50+
  66. 66. 6. TV NETWORKS WILL SOON FEEL NEWSPAPERS’ PAIN
  67. 67. TRADITIONAL TV HAS PASSED ITS PEAK Households With Pay TV Vs. Subscription OTT, U.S., 2010-2015E, Millions Leichman Research Group, US Census Bureau, Activate analysis 99 100.9 100.8 99.3 98 97.1 23 28 33 38 43 50.3 0 20 40 60 80 100 120 2010 2011 2012 2013 2014 2015E Pay TV Households Digital SubscripZon (OTT) Households
  68. 68. PAY TV SUBSCRIBERS ARE SHRINKING Cable TV Subscribers (US) Source: Leichtman Research Group 48.0 48.5 49.0 49.5 50.0 50.5 51.0 Q1 14 Q2 14 Q3 14 Q4 15 Q1 15 Q2 15 Millions
  69. 69. VIEWERSHIP IS FALLING… Primetime Household TV Ratings Source: Nielsen 4.8 5.0 5.2 5.4 5.6 5.8 6.0 6.2 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Nielsen Household RaZng (% Of Households With TV Sets Watching) Big 4 US TV Networks Average
  70. 70. Meanwhile…
  71. 71. NETFLIX ~70 MILLION AND GROWING Netflix Subscribers Estimates in millions, Global Source: Netflix DomesZc InternaZonal 0 10 20 30 40 50 60 70 80 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Millions
  72. 72. 0 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 2015E Millions HULU ~10 MILLION AND GROWING Hulu Subscribers Estimates in millions, Global Source: Hulu, BI Intelligence estimates
  73. 73. AMAZON PRIME ~45 MILLION AND GROWING Amazon Prime Members Estimates in millions, Global Source: Deutsche Bank, Company reports 0 10 20 30 40 50 2011 2012 2013 2014 2015E Millions
  74. 74. - 5 10 15 20 25 30 35 40 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Millions Global US APPLE TV 35 MILLION+ AND GROWING Apple TV Installed Base Source: BI Intelligence estimates
  75. 75. 58% 73% 83% 89% 63% 68% 63% 42% Age 18-24 Age 25-34 Age 35-54 Age 55+ Percent Reach Four TV Networks Facebook FACEBOOK REACHES MORE 18-24 THAN FREE TV Source: Nielsen Facebook vs. TV Daily Reach US
  76. 76. NETFLIX IS WATCHED MORE HOURS PER MONTH THAN ALMOST EVERY OTHER NETWORK Total Hours Of Viewing, Per Month Per Network Liam Boluk, MEDIA REDEF
  77. 77. NETFLIX HOUSEHOLDS WATCH 60 HOURS OF NETFLIX PER MONTH, 2X ANY NETWORK GROUP Source: Liam Boluk, MEDIA REDEF
  78. 78. YES, TV STILL DOMINATES VIEWING TIME US Consumer Time Spent On Video Per Month, 2015E, Hours Source: Digitalsmiths, eMarketer, GfK, Sandvine, Nielsen, TDG, Activate analysis TradiZonal TV 72% SubscripZon TV 14% Ad-Supported 9% Paid Downloads 5% Total: 177 hours
  79. 79. BUT DIGITAL VIEWING UP ~100% IN 3 YEARS Source: Digitalsmiths, eMarketer, GfK, Sandvine, Nielsen, TDG, Activate analysis 3.5 7.5 15 Paid Downloads Ad Supported SubscripZon 2012 8 16.5 25 2015E Monthly Consumer Time Spent On Video, U.S., 2012-2015E, Hours
  80. 80. And the TV audience is increasingly a specific demographic…
  81. 81. MSNBC and CNN: 60 Broadcast Networks: 62-64 FOX News: 68 MEDIAN VIEWER AGE
  82. 82. Convenience. WHY IS DIGITAL TV GROWING?
  83. 83. We can watch what we want to watch when we want to watch it — on any screen. WHY IS DIGITAL GROWING?
  84. 84. So what’s going to happen?
  85. 85. First, ignore people who say “TV will die.”
  86. 86. Old media don’t die. They just find their niche(s). See radio and print.
  87. 87. There are three key parts of “TV” — and two of them are thriving.
  88. 88. 1. Digital TV networks will continue to thrive
  89. 89. iTunes Neilix AMC $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 2007 2008 2009 2010 2011 2012 2013 2014 (Millions) ITUNES AND NETFLIX ALREADY DWARF AVERAGE CABLE NETWORKS Source: News Reports, Company Filings Cable Network vs. Digital Content Revenue 2007-2014
  90. 90. $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2007 2008 2009 2010 2011 2012 2013 2014 (Millions) CBS Ad YouTube Ad Revenue AMC Networks Revenue CBS Ad Revenue YOUTUBE REVENUE CLOSING IN ON BROADCAST NETWORKS YouTube Ad Revenue Vs. CBS Ad Revenue And AMC Networks Revenue Source: News Reports, Company Filings, BI Intelligence estimates, BofA Merrill Lynch Global Research
  91. 91. 2. Access providers will continue to thrive — unless (until?) real price competition
  92. 92. CABLE’S FUTURE IS BROADBAND Cable Subscribers Millions By Service (US) Note: Select major cable providers Source: Leichtman Research Group 50 50 50 50 49 49 49 49 49 49 49 50 51 51 52 53 53 54 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 TV Broadband
  93. 93. 6.9 12.3 25.5 32.3 45.5 55.6 79.6 89.8 108.4 125.0 144.2 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 WIRELESS’S FUTURE IS BROADBAND Wireless data service spending in the US (Billions, USD) Source: TIA
  94. 94. 3. Traditional TV networks will go through ~decades of pain
  95. 95. Why?
  96. 96. Money follows eyeballs.
  97. 97. $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* In Millions Print Online WHEN EYEBALLS LEFT PRINT THIS HAPPENED Newspaper Ad Revenue (Print vs. Online) Source: Newspaper Association Of America, *Estimate
  98. 98. THERE ARE TOO MANY NETWORKS Channels Receivable And Watched Per TV Household US Source: Nielsen 129.3 136.4 151.4 168.5 179.1 189.1 17.3 17.7 17.8 17.5 17.8 17.5 2008 2009 2010 2011 2012 2013 Average TV Channels Received Average TV Channels Watched
  99. 99. THERE ARE TOO MANY (MEDIOCRE) SHOWS Average original TV series each year vs. survival rate Source: Liam Boluk, MEDIA REDEF
  100. 100. So get ready for years of consolidation and pain.
  101. 101. Pay TV SubscripZons $103.1 TV AdverZsing $67.0 Ad Supported $7.7 SubscripZon $5.5 Paid Downloads $2.0 $185.3 B Total FORTUNATELY, TV IS AWASH IN MONEY Revenues, U.S., 2015E, USD Billions Source: BIA/Kelsey, Digital TV Research, eMarketer, Google, Hulu, Netflix, PwC, SNL Kagan, Statista, Digital Market Outlook, TDG, Activate
  102. 102. So they’ll suffer in style.
  103. 103. 7. POWER AND WEALTH WILL BE MORE CONCENTRATED THAN EVER
  104. 104. $66.0 $48.8 $27.4 $13.8 $13.3 $12.5 $5.5 $4.6 $3.2 $2.5 $1.6 Google Disney Time Warner CBS Viacom Facebook Neilix Yahoo Ganneb AOL New York Times (Billions) -8.2% YoY -9.7% YoY -4.6% YoY 8.7% YoY 58.4% YoY 0.8% YoY -3.7% YoY 10.3% YoY 8.4% YoY 25.8% YoY -1.3% YoY DIGITAL MEDIA IS THE NEW “BIG MEDIA” 2014 Revenue Select Media Companies Source: Company Filings, BI Intelligence estimates
  105. 105. And “big media” companies are now distinctly medium-sized.
  106. 106. $233.7 $132.4 $127.1 $68.8 $66.0 Apple AT&T Verizon Comcast Google Billions 27.9% YoY 2.9% YoY 5.4% YoY 6.4% YoY 10.3% YoY THIS IS THE NEW “BIG” 2014 Revenue Select Media Companies Source: Company Filings, BI Intelligence estimates
  107. 107. THANK YOU!
  108. 108. Sign up for BI Intelligence to get more content like this... Subscribe to Business Insider’s research service to get rich analysis and key insights on today’s most relevant topics in the digital landscape: http://read.bi/intelligence

×