The document discusses how apps have changed consumer behavior and reports on research about app adoption and abandonment. Some key findings are that apps provide entertainment, utility and information; consumers are more likely to adopt free apps that have positive reviews but will try paid apps if they have free versions or are inexpensive; entertainment apps tend to be replaced more when consumers lose interest or find better alternatives, while gaming apps are equally likely to be replaced or deleted for similar reasons. Fun, usability and constant new content are important for sustaining long-term app usage.

1. LOVE ’EM OR LEAVE ’EM: ADOPTION, ABANDONMENT AND THE APP-ADDLED CONSUMER COLLEEN FAHEY RUSH EVP AND CHIEF RESEARCH OFFICER MTV NETWORKS

2. BURNING QUESTIONS How are apps changing our lives? Where’s the line between app love and abandonment?

3. HOW ARE APPS CHANGING OUR LIVES? Be: Create me moments Do: Make everyday life better Experience: Provide a window onto new worlds Apps help us:

4. THE APP-ADDLED CONSUMER

5. APPS: WOULD YOU RATHER…? “ I would rather give up sports than my phone.” – Jake, 15 “ If I were to say, Rachel, I’m sorry, but you’re not going to be able to use your iPod for the next month, what would that be like?” “That would hurt my feelings!” – Rachel, 13 “ I probably wouldn’t be able to function if I didn’t have the apps that are available to me now.” – Jazmine, 21

6. APPS: WOULD YOU RATHER…? Top 5 things men and women would consider giving up for a year instead of giving up access to their mobile apps Q19 - How willing would you be to give up apps for a year compared with the following things? I would rather give up ___________ than give up apps.(3-point scale, top 2 box shown) n=1309 MEN WOMEN Chocolate 65% My favorite reality show 77% My favorite news source 69% Coffee 68% Soda 64% My favorite reality show 63% The Super Bowl 79% My favorite news source 68% Soda 68% Coffee 62%

8. THE APP-ADDLED CONSUMER IS… Less tolerant of boredom Addicted to instant gratification More spontaneous Interactive and participatory Informed, confident, empowered

9. THE LIFE CYCLE OF AN APP IN FOUR STAGES WHAT MAKES AN APP TRULY ADDICTIVE?

10. THE LIFE CYCLE OF AN APP IN FOUR STAGES ABANDONMENT LONG-TERM USAGE OR ABANDONMENT ADOPTION TRIAL DISCOVERY

11. DISCOVERY Person to person: Word of mouth plays a critical role Q25 - When discovering new entertainment and gaming apps, how important are each of the following in your decision to download or purchase? (3-point scale, top box shown) n=1309 Seeing a friend/someone I know use a particular app 42% Recommendations from a friend/someone I know 53% User reviews or recommendations 52% Browsing the iTunes App Store/Android Market 47%

12. ADOPTION (FREE) A high volume of positive app ratings is key for free app downloads Q27 – When deciding whether to download free entertainment and gaming apps, which of the following are the most important factors in your decision? n=1309 89% of participants said, “When apps are free, I think ‘why not try it out?’” The app meets a need I have – I am deliberately searching for something to fill this need 42% The app sounds good from the description (features, functions, etc.) 42% There are a high number of sufficiently positive ratings 50% The app was personally recommended to me by someone I trust 43% The app was on a top 25 list in the App Store/Android Market 35%

13. ADOPTION (PAID) Free/lite version is 2nd most important factor after price Q26 - When deciding whether to download paid entertainment and gaming apps, which of the following are the most important factors in your decision? n=1309 The app meets a need I have 41% The price is right for me 63% The app has a free or lite version I can try first 49% There are a high number of positive ratings 42% The app was personally recommended by someone I trust 37%

14. TRIAL Roughly half of participants use a TV or Gaming app 2 to 3 times before deciding whether to keep it or toss it. Q14 - To what extent do each of the following statements about how you use mobile apps describe you? (4-pt scale, top 2 box shown) n=1309 Q25a_A – I usually use an [entertainment or gaming] app ____ time(s) before deciding whether to keep it or toss it. n=640, 669

15. TO LOVE OR LEAVE? General Apps: Q14 - To what extent do each of the following statements about how you use mobile apps describe you? (4-pt scale, top 2 box shown) n=1309 Q25a_A – I usually use an [entertainment or gaming] app ____ time(s) before deciding whether to keep it or toss it. n=640, 669` I often replace old apps as soon as I find new ones with better functionality or features 78% I often keep apps on my phone that I haven't used in a while 74% I often replace old apps as soon as I find new ones that are more visually appealing 61%

16. A CLOSER LOOK: TV APPS

17. TRIAL: TV APPS Nearly half of TV app users engage several times a day for more than 10 min. per session Q25a4_E – I use my favorite [entertainment or gaming app] ____. n=640, 669 Q25a5_F – I usually use my favorite [entertainment or gaming app] for ____ at a time. n=640, 669 Q25ea2_C - Think about an [entertainment or gaming app] that was one of your favorites in the past 3 months. I used this app for _____ before deleting it or not using it anymore. FREQUENCY I use my favorite TV app… Once a week or less 9% A few times a week 26% Once a day 22% Several times a day 44% Less than 1 minute 4% 1-5 minutes 24% 6-10 minutes 27% More than 10 minutes 45% I use my favorite TV app for… DURATION … at a time. 1-3 weeks 22% 1-2 months 19% 3-6 months 20% 6 months – 1 year 11% A few days 16% 11% More than 1 year SHELF LIFE I used this app for… … before deleting it.

18. LONG-TERM USAGE : TV APPS – WHY WE LOVE THEM Ease of use, constant new content and aesthetics/feel drive TV app loyalty Q28 - Think about your favorite [entertainment or gaming app]. What are some of the reasons this app has kept you interested and coming back for more? n=640, 669 Regular update/new features added 45% Easy to use 79% Constant stream of new content 55% Has a great look and feel 52% My friends use it as well 37% Offers exclusive content 36%

19. ABANDONMENT: TV APPS – WHY WE LEAVE THEM Better alternatives and insufficient content drives most TV app abandonment Q29 - Think about an [entertainment or gaming app] that you have downloaded/purchased in the past 3 months but deleted / eventually stopped using. What are some of the reasons you abandoned this app? n=640, 669 Not enough new content after a while 39% There were better alternatives available 55% I lost interest 50% Not enough content/gameplay available 42%

20. ABANDONMENT: TV APPS – WHAT HAPPENS NEXT Entertainment apps are much more likely to be replaced, indicating that they play a specific role that is valuable to the user Q25a1_B - Usually, if I decide I don’t like an [entertainment or gaming app] I _______. n=640, 669 Leave it on my device and look for replacement 8% Delete it and look for replacement 51% Delete it and don't look for replacement 29% Leave it on my device and don't look for replacement 13%

21. A CLOSER LOOK: GAMING APPS

22. TRIAL: GAMING APPS Half of gaming app users engage several times a day for more than 10 min. per session FREQUENCY I use my favorite Gaming app… Q25a4_E – I use my favorite [entertainment or gaming app] ____. n=640, 669 Q25a5_F – I usually use my favorite [entertainment or gaming app] for ____ at a time. n=640, 669 Q25ea2_C - Think about an [entertainment or gaming app] that was one of your favorites in the past 3 months. I used this app for _____ before deleting it or not using it anymore. Once a week or less 4% A few times a week 23% Once a day 23% Several times a day 49% Less than 1 minute 1% 1-5 minutes 20% 6-10 minutes 29% More than 10 minutes 50% I use my favorite Gaming app for… DURATION … at a time. 1-3 weeks 11% 1-2 months 25% 3-6 months 24% 6 months – 1 year 16% More than 1 year 17% 7% A few days SHELF LIFE I used this app for… … before deleting it.

23. LONG-TERM USAGE: GAMING APPS – WHY WE LOVE THEM Challenging gameplay, ease of use, feel of the gameplay and the app’s look drive gaming app loyalty Q28 - Think about your favorite [entertainment or gaming app]. What are some of the reasons this app has kept you interested and coming back for more? n=640, 669 Has a great look/feel 54% It’s challenging 75% Easy to use 73% Gameplay is good/game feels right 70% My friends use it as well 39% Allows me to escape 36%

24. ABANDONMENT: GAMING APPS – WHY WE LEAVE THEM Loss of interest and insufficient gameplay drives most gaming app abandonment Q29 - Think about an [entertainment or gaming app] that you have downloaded/purchased in the past 3 months but deleted / eventually stopped using. What are some of the reasons you abandoned this app? n=640, 669 Not enough content/gameplay available 30% I lost interest 77% Not enough new content after a while 45% There were better alternatives available 31%

25. ABANDONMENT: GAMING APPS – WHAT HAPPENS NEXT Gaming apps are about equally likely to be replaced as they are to simply be deleted Q25a1_B - Usually, if I decide I don’t like an [entertainment or gaming app] I _______. n=640, 669 Leave it on my device and look for replacement 10% Delete it and don’t look for replacement 41% Delete it and look for replacement 39% Leave it on my device and don't look for replacement 10%

26. WHERE’S THE LINE BETWEEN LOVE & ABANDONMENT? MOST IMPORTANT ATTRIBUTES: FUN & UTILITY Q13 – How important are each of the following characteristics in an app? (3-point scale, top box shown) n=1309 Q14 - To what extent do each of the following statements about how you use mobile apps describe you? (4-pt scale, top 2 box shown) n=1309 75% said it is very important that an app “is entertaining or fun to use” 62% said it is very important that an app “feels good” in terms of its touch screen feel 50% said it is very important that an app “constantly has new things for me to see, read or do” 83% said “I’m often surprised at how useful an app can become even if I don’t initially think it is something I need”

27. LOVE ’EM OR LEAVE ’EM: ADOPTION, ABANDONMENT AND THE APP-ADDLED CONSUMER COLLEEN FAHEY RUSH EVP AND CHIEF RESEARCH OFFICER MTV NETWORKS