subscription services in the context of market trends, presented by jonathan stolper, svp nielsen...

Subscription Services in the Context of Market Trends

Q1 2014

Jonathan StolperMay 2014

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Latest Nielsen Research:

• Streaming Music Subscription Services

• Streaming TV and Movies Subscription Services

• Book Subscription Services

.

Book Subscription Services Agenda

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STREAMING MUSIC SUBSCRIPTION SERVICES

How have subscription services faired in other entertainment sectors?

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Methodology/Data Sources

Data on Music Subscriptions:

Derived from NetView panel to analyze streaming behavior

• A representative panel of 220,000 US Internet users

• tracks consumer usage across all web sites and apps at work at home and work

• Delivers high-quality audience data and analytics that are based on observed behaviours at an individual user level (age 2+)

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Total Music Streams

Nielsen Entertainment– BDS Streaming Data Q1-’12 – Q3-’13Longitudinal, non-video provider data: Cricket, MediaNet, Rdio, Rhapsody, Slacker, Spotify

Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-20131,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Total Streams: Overall GrowthMM Streams

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Streaming Accounts for a Fifth of US Music Revenues% of music revenues coming from streaming services

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Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-1

2

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-1

3

Aug-13

Sep-13

Oct-13

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Access To Sites and Services With Pirated Content Is Decreasing…

Based on all who have accessed an illegal site or serviceSource: Nielsen US NetView Panel Home and Work – Sept ‘11 – Oct ‘13

US internet users access sites and services with illegitimate

content (10%)

22mUsers (,000’s) Reach

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-1

2

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-1

3

Aug-13

Sep-13

Oct-13

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Visitation to Pirate Sites and Services - Audience Size

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Who Are Music Streamers?

Key Findings

• Younger adults (18-34) are more likely to be streamers and also

stream the most

• Heavy streamers lean slightly male, moderate streamers slightly

female

• Music streaming has not spread to the less tech-savvy

• Streamers are less likely to pirate content

• African Americans and Hispanics are more likely than the average

internet user to stream music

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STREAMING TV & MOVIE SUBSCRIPTION SERVICES

How have subscription services faired in other entertainment sectors?

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Methodology/Data Sources

Data on Movie/TV Subscriptions:

• Nielsen Total Home Entertainment Panel; Full Year 2013

• 3,000 households active per quarter

• Record all Movie and TV transactions across all retailers, devices, and platforms

• A longitudinal view, tracking panelists behavior over time

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Streaming TV & Movies Subscription Services Are On the Rise Especially in last 9-Months

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 20140.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

19.9% 19.3% 18.2% 19.2%21.2%

18.7%

22.7%25.4%

HH Penetration

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Streaming Is Primarily Used for Television

Types of Content: % of Streams % of Subscription Streams

Television 81.0% 80.3%

Movies 19.0% 19.7%

Action/Adventure 4.8% 5.4%

Comedy 2.4% 2.6%

Drama 3.5% 4.2%

Family 3.0% 3.0%

SciFi 1.0% 1.0%

Horror 1.9% 1.3%

Source: Nielsen Total Home Entertainment Panel; Full Year 2013

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13Nielsen Total Market Panel: 2012:Q2-2013:Q2. Transactional Movie Spend By SVOD vs. Non-SVOD Households

SVOD HHs NON SVOD HHs$0

$5

$10

$15

$20

$25

$30

$35

$40

Avg Quarterly Spend Q

uart

erly

HH

Spe

nd

Streamers Spend Less on Transactional Content

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14Nielsen Total Market Panel: 2012:Q2-2013:Q2. Transactional Movie Spend for sVOD Adopting HHs.

Included: Longitudinal sVOD adopters with at least 2 months in the panel prior both pre and post adoption.

Before After$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$16.44

$8.46

AVG/HH Spend sVOD Adoptersn=749

Mon

thly

HH

Spe

nd

NetflixHulu+

Amazon Prime Redbox Instant

But Make Up For It In Subscription Costs

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How Might All Of This Impact Book Subscriptions….

• Don’t expect rapid take-off….growth is incremental

• Early adopters are more likely to be…

• Young

• Male

• Tech-savvy

• A reduction in illegal behaviors

• First to adopt tend to be heavier buyers…

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BOOK SUBSCRIPTION SERVICES

So how are book subscription services playing out in the book industry?

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Books & Consumers Methodology

US & UK consumer market tracker studies providing demographic and psychographic information ontoday’s book buyer: 6,000 book buyers per month in US drawn from a national representative sample• 75 questions about book and ebook purchasing• ~72,000 book consumers annually• ~200,000 book purchases annually

Deliverables: Annual Reviews Industry Standard Quarterly Reports Genre Landscapes – quarterly GenreProfiles – annual Adhoc analysis Return to sample Syndicated Deep-Dives e.g. Children’s, Ebook Consumers, Travel

Developments: B&C lite and dashboard solution Retailers, AGFA, device manufacturers Segmentation and clustering studies Forecasting

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Books & Consumers Coverage

Book buyers Books bought

What?

Where?

When?

Demographics

Media usage

Leisure habitsWhy?

Who for?

Book spend

Sex, age, region, socio-economic, family

Newspapers, magazines, devices, social media

Online, offline, cultural

Publisher, format, genre, author, price, discounting

Channel, retailer

Month, quarter, YTD

Discovery, influences, use

Sex & age, relationship, occasion

Reading attitudes

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Book Buyer Activities in Q1 2014

None of the above

Took out a subscription to read ebooks where you pay a monthly fee to download a number of books (e,.g, via Safari Online, Oyster, etc.)

Read a book in serialized form

Went to an e-bookstore and e-reading platform that lets you pay only for what you read

Subscribed to AmazonPrime and downloaded a Kindle book to borrow for free each month from the Kindle Owners' Lending Library

Subscribed to AmazonPrime and downloaded streaming content of movies and/or TV shows with Prime Instant Video

Downloaded a book related 'app' to a device such as a smartphone, tablet, or ereader either free or paid for separately

Went on vacation to a destination significantly far from your home (personal, not business)

Visited a public library either in-person or online

Purchased one or more books (any type, such as, hard cover, paperback, audio, e-book, etc.)

Cooked using recipies

0% 10% 20% 30% 40% 50% 60% 70%

4%

9%

17%

17%

16%

23%

33%

40%

56%

68%

68%

Nielsen Books & Consumers Monthly SurveyRespondent Level Summary (Book Buyers ~6,000 per month)

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Most Popular Subscription Services (of the 9%)


Other, please specify

24Symbols

Entitle (formerly eReatah)

SkillSoft (Harper Collins)

Scribd

Direct from another publisher

Harlequin

Oyster

Safari Online

AmazonPrime

0% 10% 20% 30% 40% 50% 60% 70% 80%

4%

17%

19%

22%

23%

23%

23%

27%

34%

79%

Q1 2014

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Book Buyer Activities in Q1 2014

None of the above


Read a book in serialized form





Went on vacation to a destination significantly far from your home (personal, not business)



Cooked using recipies

0% 10% 20% 30% 40% 50% 60% 70%

4%

5%

17%

17%

16%

23%

33%

40%

56%

68%

68%


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How Do Subscribers Compare (Gender)?


Purchased one or more books (any format.)







0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

46.4%

48.7%

52.6%

53.7%

55.7%

56.4%

60.8%

53.6%

51.3%

47.4%

46.3%

44.3%

43.6%

39.2%

Male Female

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How Do Subscription Services Compare?


Scribd

Safari Online

Oyster

AmazonPrime

0% 20% 40% 60% 80% 100%

61.1%

62.1%

60.4%

60.6%

38.9%

37.9%

39.6%

39.4%

Male Female

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How Do Subscribers Compare (Age)?









0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

27.3%

28.1%

36.4%

36.5%

36.8%

37.4%

40.5%

27.5%

28.4%

32.5%

34.9%

35.0%

36.8%

40.0%

13-17 Yrs 18-29 Yrs 30-44 Yrs 45-54 Yrs 55-64 Yrs 65+ Yrs

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How do Subscription Services Compare?


Scribd

Safari Online

Oyster

AmazonPrime

0% 20% 40% 60% 80% 100%

7.6%

11.2%

9.4%

8.3%

39.7%

41.8%

42.5%

40.8%

49.6%

42.2%

46.2%

42.9%

3.1%

3.0%

1.9%

4.1%

0.0%

1.3%

0.0%

2.5%

0.0%

0.4%

0.0%

1.4%

13-17 Yrs 18-29 Yrs 30-44 Yrs 45-54 Yrs 55-64 Yrs 65+ Yrs

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How do Subscribers Compare (Income)?


0%

20%

40%

60%

80%

100%

13.4% 14.0% 15.1%20.4%

17.0% 17.7% 17.9%

9.5% 10.0% 10.8% 13.4% 12.6% 12.6% 11.6%

4.4% 5.0% 5.9% 7.4% 6.3% 7.1% 6.0% $150,000 and over

$100,000-$149,999

$75,000-$99,999

$50,000-$74,999

$35,000-$49,999

$25,000-$34,999

$15,000-$24,999

Under $15,000

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How do Subscription Services Compare?


AmazonPrime Oyster Safari Online Scribd0%

20%

40%

60%

80%

100%

5.5% 4.7% 6.5% 7.6%4.8% 3.8% 2.6%

5.3%

9.9%7.5% 8.6% 3.8%

13.1%

11.3%14.7%

10.7%

24.0%

25.5%

26.3%

21.4%

21.2%

17.9%

17.7%

24.4%

14.7%

18.9%15.1% 17.6%

6.7% 10.4% 8.6% 9.1%$150,000 and over

$100,000-$149,000

$75,000-$99,999

$50,000-$74,999

$35,000-$49,999

$25,000-$34,999

$15,000-$24,999

Under $15,000

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Subscribers Continue to Shop for Books in Other Outlets

Non-Subscribers Subscribers $-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$60.80

$105.80

$10.00

Monthly FeeBook Transactions

4.9 books

7.7 books

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Subscribers Are More Likely to Plan Book Acquisition

Yes No0%

10%20%30%40%50%60%70%80%90%

100%

51%36%

22%

23%

12%

17%

15%25%

Not Planned, Impulse purchase

Planned a book at that specific time, but not specific bk

Planned this specific book, but not at that specific time

Planned this specific book at that specific time

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Book Subscribers Are More Likely to Have Also Pirated Books in the Last 6-months

0%

5%

10%

15%

20%

25%20%

17%15% 14%

7%5%

2% 3%

YesNo

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In Summary

• Book subscription people are higher book buyers than the norm.

• Mostly Men

• Younger

• Wealthier

• Their book purchases are less “impulsive” than the norm

• They continue to maintain other book purchase habits

• Are more likely to have pirated books in the past – need further study to see if subscription service have decreased their pirated activities

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Ideas For Further Study…

• Adoption, Loyalty, Substitution

• Content, Selection

• Attracting a Wider Audience

subscription services in the context of market trends, presented by jonathan stolper, svp nielsen...

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