THE ARRIS 2014 CONSUMER

ENTERTAINMENT INDEXFollow us on Twitter @ARRISEVERYWHEREFollow us on LinkedIn www.linkedin.com/company/ARRIS

204/15/2023

CONSUMERS WANT ENTERTAINMENT ON THEIR TERMS

304/15/2023

KEY FINDINGS

04/15/2023 4

Consumer demand for personalized entertainment is driving several key trends:

• Broadcast TV is the core of in-home entertainment – 96% penetration rate means new implications for multiscreen and multi-room viewing

• Majority of consumers are engaged in binge-TV viewing: 80%

• Growth in multi-device usage drives new opportunities for multiscreen merchandising – 30% use secondary devices to purchase products featured in the programs they watch

• Consumers want more storage – 62% said that there is frustration in the home when programs have to be deleted to make space

KEY FINDINGS

04/15/2023 6

1. Broadcast TV is here to stay

2. Consumers engage in binge-viewing

3. New opportunities for multiscreen merchandising

4. Storage challenges

CONTENTS

704/15/2023

BROADCAST TV IS HERE TO STAY

04/15/2023 8

BROADCAST TV REMAINS THE ENTERTAINMENT LEADER

96% 95% 91% 86%67% 60%

• Broadcast and Subscription TV remain the core methods for in-home entertainment viewing with 96% and 95% penetration, respectively

How do you access TV?

04/15/2023 9

• The living room is the room most likely to be used for watching TV globally

• The bedroom is the second most popular room for viewing TV entertainment

THE LIVING ROOM REMAINS THE HUB FOR HOME ENTERTAINMENT

Livin

g Roo

m

Dinin

g Roo

m

Kitche

n

Bathr

oom

Main

Bedro

om

Additi

onal

Bed

room

/s

Ente

rtain

men

t/TV R

oom

66%

11%14%

4%

25%

14%11%

61%

14% 12%

4%

26%

15%12%

39%

7% 8%13%

22% 20%17%

Broadcast TV (n=5234) Subscription paid TV (n=6279) Video games console (n=4111)

Where do you watch TV?

04/15/2023 10

• Broadcast and Subscription TV dominate consumers entertainment habits

• Internet TV is increasing; note that four hours a week is spent on user-generated content

…BUT TIME SPENT INTERNET STREAMING ON THE RISE

How many hours do you spend watching entertainment ?

11 11

7 7

5

4

04/15/2023 11

INCREASING FREQUENCY OF STREAMING ENTERTAINMENT

• The number of streamers using the service infrequently has declined in 2014, showing that those using a streaming service are more likely to be using it as a regular part of the weekly viewing schedule

2014 2012-13

0% 27%

0% 14%

0% 16%

0%15%

0%28%

Every day

Five or more days a week

Three or four days a week

Once or twice a week

Less than once a week

How often do you use your Internet streaming service?

04/15/2023 12

• Around three-quarters overall use their service at least once a week (of those who have it)

GLOBAL VARIATIONS IN STREAMING SERVICES

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27% 21% 24%

43% 44%53%

42%

9% 10%17% 17%

36% 32%18% 20% 14%

37%

9%

26%14%

14%15% 15%

12% 16%11%

15%

9% 10%10% 9%

16%10%

8%13% 19%

20%

10%

16%

11%

16%15%

18%

10%15% 11%

12%

12% 16%13% 14%

16%

15%

18%14%

27%

14%

14%

18%

22%

15%15%

15%8%

9% 9% 14%

13%20%

23%15%

15%

11%21% 14%

18%13%

23%

18%30%

28% 34% 28% 26%17% 17% 18%

56%44%

37%46%

18%33% 36% 40%

21% 17%

44%

21% 22%

Every day Five or more days a week Three or four days a week Once or twice a weekLess than once a week

How often do you stream content each week?

04/15/2023 13

• Traditionally connected devices (laptops and desktops) are still popular. Other devices on the rise (Smart TVs especially)

• Service Providers need to meet a large range of requirements if they are to maximize their reach

LAPTOP IS PREFERRED DEVICE FOR INTERNET STREAMING

55% 53%

42%

33%28%

16% 16% 15%9% 7%

On what devices do you stream entertainment?

04/15/2023 14

MOBILE DEVICE PENETRATION INCREASES

71% 71% 70%

55%

43%39%

35%

15%8%

73%

60%

69%65%

26%34%

16% 19%

5%

2014 2012-13

• Smartphone and tablet ownership increases in 2014 • The most significant figure is the increase in ownership of

Smart/connected TVs by 19% over last year’s study

What devices do you own?

04/15/2023 15

• Around half of smartphone owners watch TV on their smartphone each week

• This is also the case for around six out of ten tablet owners

SIGNIFICANT TV CONSUMPTION ON MOBILE DEVICES

38%

20%

25%

11%

5%

2%

Tablet

49%

19%

17%

7%4%

3%

Smartphone

Rarely/never watch TV us-ing this device

Less than 1 hour

1 – 5 hours

5 – 10 hours

10 – 15 hours

More than 15 hours

Hours spent watching TV on mobile devices?

04/15/2023 16

• Respondents in some countries are coping better than others, but in almost all, the majority encounter issues at least occasionally

• This is a challenge that is likely to worsen if content provision rates outstrip bandwidth capabilities

• A solution that maximizes bandwidth capability is needed

CONSUMERS STRUGGLE WITH QUALITY OF SERVICE

9% 8% 6%14% 13% 11% 8% 8% 7% 8% 7% 12% 7% 7% 7% 8%

15%7% 8% 3%

13%8% 8%

9% 16% 15%12% 14%

9%13% 10%

18%

12% 10% 12%18%

23%

8%14%

8%

12%

9% 12%

16%13% 17%

13% 9%

9%

15%12%

15%

14%9% 10%

14%

14%

7%

14%

8%

40%

33%39%

46% 36%47%

52%

23% 35%

50%

40%

35%45%

33%37%

50%33%

23%

45%

53%

27%

43%36%

14%21%

10% 15%

45% 41%

14%

31%20% 23%

40%34%

10% 15%

55%

18%28%

I encounter issues every time I stream or download I encounter issues most of the time I stream or downloadI encounter issues about half the time I stream or download I encounter issues occasionally when I stream or downloadI never encounter issues streaming or downloading

How often do you encounter issues when streaming?

04/15/2023 17

• A minority overall are switching away from traditional TV Service Providers

• However, among the younger generation, it is a significant number, so this is a potential growing threat to traditional TV Service Providers in the future

CONSUMERS PREPARED TO SWITCH SERVICE PROVIDER TO GET WHAT THEY WANT

13%

7%

20%

9%

19%

10%

14%

8%

11%

6%7%

4%3% 3%

What actions have you taken to get the content you want?

Total 16-24 years-old 25-34 years-old 35-44 years-old 45-54 years-old 55-64 years-old65 or more years-old

1804/15/2023

CONSUMERS ENGAGE IN BINGE-VIEWING

04/15/2023 19

• Binge-viewing* is a prevalent habit in all regions, especially across LATAM, Turkey and India

*Binge-viewing is watching multiple episodes of a TV program or film in one sitting

80% OF CONSUMERS BINGE-VIEW

Tota

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14% 10% 7%

27%17%

23% 22%10% 12% 15%

8%

24%18%

5% 6% 9%

27%13% 15%

7%

20%17% 19%

19%

22%23% 26%

21% 19% 16%

11%

26%

23%

14% 15%20%

20%

23% 16%23%

15%15% 14%

14%17%

15%16%

13% 10% 14%

10%

17%

18%

11% 12%

28%

16%

8% 15% 18%

7%7% 6%

6%6%

6%9%

4% 4%8%

7%

7%

5%

8% 5%

11%5%

2%6%

8%7%

9% 11%

5%5%

6%3%

6% 6%

10%

8%

5%

4%

7% 8%

14%3%

3%5%

4%

18%17% 18%

13%16%

18% 15%

19% 25%15%

27%

12%

14%

17%23%

13%

18%

25%21%

26%

20%26% 26%

15% 17%10% 9%

28% 23% 22%29%

9%18%

37%31%

6%12%

25% 22%14%

Once a day Once a week 2-3 times a month Once a month Once every 2-3 months Less often I never do this

How often do you binge-view?

04/15/2023 20

• There are a variety of methods to access binge-viewing content in any given region

• Shows that targeting binge-viewers will need to take format into account on a regional basis

THE MOST POPULAR WAY TO BINGE-VIEW IS VIA FREE CATCH-UP SERVICES

Downloaded using a catch-up service (free) DVD/Blu-ray Streamed using a catch-up service (free)

Recorded from 'live' broadcast to DVR

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31%

38% 36%

25%

36%

26%33%

37%

49%

37%34%

44%

25%

40%

31%

63%

41%

68%

47%

34%31% 29%

36%

27%32%

24%

34%31% 32% 33%

30%

39%

30%36%

45% 47%

33%

20%

44%

30%

By what methods do you binge-view?

04/15/2023 21

• Laptops are used by almost a quarter to binge-view

STANDARD TV IS OUR PREFERRED BINGING DEVICE

What devices do you use to binge-view?

'Standard' TV Laptop/notebook computer

Smart TV/connected TV

Desk top computer

Gaming Console

Tablet Smartphone '4K/Ultra HD' TV

47%

24%

18% 17%15%

9%6% 6%

04/15/2023 22

• Devices used to binge-view vary by age, and therefore age-based targeting is required

STANDARD TV IS OUR PREFERRED BINGING DEVICE

16-24 years-old 25-34 years-old 35-44 years-old 45-54 years-old 55-64 years-old 65 or more years-old

31% 33%36%

38%

45%50%50%

39%

32%

24%

18%

12%

29% 30% 30% 28%

23%

17%18%

29%26% 25%

20%

14%

'Standard' TV Laptop computer Desktop computer Smart TV

What devices do you use to binge-view?

2304/15/2023

NEW OPPORTUNITIES FOR MULTISCREEN MERCHANDISING

04/15/2023 24

• 30% of those who use a device to engage with a program while watching it are making purchases associated with the TV programs

• Advertising needs to engage with the consumer in a way that doesn’t interrupt their entertainment

PURCHASING PRODUCTS FEATURED IN TV SHOWS

How do you use second screens in relation to

program on the main screen?

Text/voice conversation related to program

Make a purchase related to program

43%

30%

Buy another product featured on the program

Buy a song featured on the program

Play an interactive game/app related to the program

Voice conversation about the program

Access historical information about the program

Text conversation about the program

Access live information about the program

27%

29%

30%

40%

27%

51%

40%

17%

18%

29%

21%

26%

32%

36%

Use one device Use two or more devices

04/15/2023 25

• Consumers record content to personalize their content and skip the advertisements

MORE THAN HALF DOWNLOAD OR RECORD TO SKIP ADVERTISEMENTS

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China

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Mexico

Austra

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Canad

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Spai

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Brazil

Swed

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Argen

tina

Russia

USAJa

pan

Germ

any

Fran

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Sout

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46%

65%57% 60%

51% 46% 47% 44% 40%48% 42%

49%40% 43% 44% 39% 39% 38% 37% 40%

13%

10%12% 8%

13% 17% 15% 18% 22% 11% 16% 9%17% 14% 12% 15% 13% 14% 10% 6%

Being able to skip advertisements is an important reason for why I download or record TV programs

Being able to skip advertisements is a crucial reason for why I download or record TV programs

Why do you skip traditional TV advertisements?

04/15/2023 26

• While the majority do not always want to fast-forward, the majority want to do so at least half the time

• Germany is the most engaged nation for on-screen advertisements; Russia the least

84% WANT TO FAST-FORWARD ADVERTISEMENTS

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25% 24% 28% 26%13%

26% 22%31%

17%

35% 39%

22%29% 32% 36%

15% 18%28%

21% 16%

27% 28% 26% 24%

22%

32%32% 21%

17%

29% 27%

25%

29% 25%23%

36% 34%27%

26%25%

13% 11%14%

13%

13%

11% 15%9%

11%

16% 9%

25%10% 10%

12%16% 11%

18%

14%14%

18%14%

15% 22%

33%

21% 22%

13%

20%

15%11% 11% 17% 16%

14% 23%24%

16%

20%21%

16%23% 17% 15% 18%

10% 8%

26%35%

5%15% 17% 14% 17% 15% 11% 13% 11%

18% 25%

Always Usually Around half the time Occasionally Never

How often do you want to fast-forward through advertisements?

04/15/2023 27

• Younger consumers are more likely to be using second screens to engage with the TV programs

• Smartphone use is higher among the youngest audience

AGE AFFECTS SECOND- SCREEN ENGAGEMENT

16-24 years-old 25-34 years-old 35-44 years-old 45-54 years-old 55-64 years-old 65 or more years-old

72% 72%

61%54%

39%

24%

42%39%

33%26%

17%

9%

27%32%

27%25%

19%13%

27% 26%20%

15%9%

4%

12% 13% 13% 11%6% 5%

Used any device/s Yes – I've used a laptop PC for thisYes – I've used a desktop PC for this Yes – I've used a smartphone for thisYes – I've used a tablet for this

Are you using a second-screen to engage with the program you are watching?

04/15/2023 28

• Respondents are interested in a service that stores their content remotely in return for advertisements

• The majority would like this service to be paid for by advertisements rather than paid for directly

ADVERTISEMENTS AS A PAY-OFF FOR STORAGE

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Spai

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Canad

a

Swed

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62%73% 69%

60% 62%71% 65% 68% 66% 61% 62% 58% 62%

54% 55% 56% 59% 55% 54%

20%

20%20%

28% 25%17%

20% 17% 18% 22% 21%21% 17%

23% 22% 20% 17% 20% 19%

I'm happy to be shown a few advertisements if it meant I got the service for free

Would you pay or watch advertisements in return for storage?

2904/15/2023

STORAGE CHALLENGES

04/15/2023 30

• Consumers from China are most likely to be frustrated when making space available to save more content

• Those from Brazil and the UK are most likely to often feel frustrated when doing this

DELETING DVR CONTENT CAUSES FRUSTRATION

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Argen

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USA UKJa

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Austra

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Swed

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Canad

a

Russia

Germ

any

Turk

ey

Fran

ce

17% 20%15%

21% 21%16%

24%16% 14%

22% 19% 22% 24%16% 17% 14%

10%15% 5% 12%

17%

56%

71%70% 63% 61% 63% 54% 59% 59% 51% 53% 51%

44% 51% 49% 49% 52% 46%52% 42%

32%

Yes - often Yes - sometimes

Has having to delete content caused frustration?

3104/15/2023

• Consumers in China are most likely to delete programs before viewing them

• Younger consumers are more likely to be deleting programs before watching

28% OF RECORDED CONTENT IS NEVER WATCHED

FranceSweden

ArgentinaSpain

MexicoUK

ChileAustralia

CanadaSouth Korea

USAGermany

TurkeyJapan

RussiaBrazil

SingaporeIndia

ChinaTotal

21%

23%

23%

24%

24%

24%

26%

26%

26%

26%

27%

27%

28%

29%

30%

32%

34%

37%

40%

28%

65 or more years-old

55-64 years-old

45-54 years-old

35-44 years-old

25-34 years-old

16-24 years-old

Total

24%

24%

26%

28%

33%

32%

28%

How much recorded TV do you never watch?

04/15/2023 32

• Catch-up and on-demand TV isn’t enough for the majority of consumers

• Half want the option to record, and more than a third want the option to record multiple programs

CONSUMERS WANT TO RECORD MULTIPLE PROGRAMS

Tota

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Mexico

China

Indi

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Japa

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Brazil

Chile UK

Argen

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Sing

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Sout

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Austra

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Germ

any

Canad

a

Spai

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Fran

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Russia

Swed

en

18% 21% 22% 26%

14%22%

13%19%

13%20% 22% 23%

12% 12%

22%

13%22% 21% 23%

13%

24%

33%23%

27%

24%

32%

26% 23% 25%25% 26% 22%

24%19%

24%

16%

18%26%

20%

20%

23%

26%31% 24%

34% 18% 32% 27% 29% 22% 17%17% 24% 28% 12% 29% 18% 10% 13%

16%

One Two Three or more

How many TV programs would you like to record simultaneously?

04/15/2023 33

• More than half of consumers in China and India will pay to record multiple TV programs at the same time

CONSUMERS PREPARED TO PAY TO RECORD MULTIPLE PROGRAMS

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China

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Brazil

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Turk

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Argen

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Sing

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Canad

a

Russia UK

Japa

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Spai

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Austra

lia

Germ

any

Fran

ce

Swed

en

30%

53% 53%42%

39% 39%35% 34% 33%

31% 26% 24% 24% 22% 22% 19% 19% 16% 16% 15%

26%

42%

33%

41%

22%

32%35%

39%

33%

33%

19% 18%21% 21% 14%

25%

18% 15%

16%

14%

"I'd be happy to pay a little more for this if it came as part of a bundle deal" or "I'd be happy to pay for this as an addi-tional service""This would encourage me to choose the service provider who offered this" or "This would encourage me to leave my cur-rent service provider if they didn't offer this"

Would you like record TV programs simultaneously?

04/15/2023 34

• Chinese respondents are deleting a large percentage of programs, and are the most likely to take a Cloud Service into consideration

• Those from Turkey are most likely to want this as part of a deal

A THIRD OF PEOPLE WILL PAY FOR CLOUD STORAGE

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33%

61% 60%

47% 47%

41%

38% 37%36% 36%

29%

24% 24% 20%20% 19% 18% 18%

15% 15%

29%

46%

39% 40%

27%

36%41%

37%

47%

35%

27%

19%22%

20%

29%

12%16% 17% 19% 18%

"I'd be happy to pay a little more for this if it came as part of a bundle deal" or "I'd be happy to pay for this as an additional service"

"This would encourage me to choose the service provider who offered this" or "This would encourage me to leave my current service provider if they didn't offer this"

Would you be interested in cloud storage?

3504/15/2023

CONCLUSIONS

04/15/2023 36

CONCLUSIONSConsumers now expect entertainment on their terms – control over what they watch, when and where they watch it.

In summary, the ARRIS 2014 Consumer Entertainment Index found:

• A healthy appetite for traditional forms of entertainment, like broadcast TV

• Increased diversity in the ways people would like to consume that content: e.g., multiscreen, multi-room, and binge-viewing

• Desire for and opportunities for second-screen merchandising

• A need for improved storage solutions

These trends underscore an opportunity for Service Providers to offer more personalized services and program-related content that address this shift in engagement. 

3704/15/2023

APPENDIX

04/15/2023 38

• The ARRIS CEI interviewed 10,500 respondents from 19 countries— 1,000 respondents from the USA and 1,000 respondents from China— 500 respondents each from: Argentina, Australia, Brazil, Canada, Chile,

France, Germany, India, Japan, Mexico, Russia, Singapore, South Korea, Spain, Sweden, Turkey and the UK

• Response required TV service with a capable device and access to an Internet connection

DEMOGRAPHICS

16%

19%

19%

19%

17%

11%

16-24 years-old

25-34 years-old

35-44 years-old

45-54 years-old

55 -64 years-old

65 or more years-old

50%50%Male

Female

Please select your gender. All respondents (10,500)

What age are you? All respondents (10,500)