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Trends Tracker

Companies covered: AAPL, AMD, AMZN, ANGI, BABA, BBRY, CBS, CMCSA, CMG, DIS, DISH, DOW, EBAY, EIX,

FB, GOOG/GOOGL, HAR, ISRG, KR, KRX:005930, LNKD, MON, MSFT, NFLX, NRG, NVDA, S, SABR, SFM, SIRI,

SWY, T, TMUS, TWTR, TWX, TYO:6758, TYO:7974, VZ, WFM, WMT, YELP

IntroductionWelcome to Blueshift Research’s and SurveyMonkey’s fifth edition of the Trends Tracker. This monthly research

survey tracks opinions and actions on roughly 20 of the most pressing questions affecting U.S. consumers as well

as business and investment theses. These trends will be monitored to see how respondents’ opinions evolve, and

will be updated with new issues that emerge from Blueshift’s research and observations.

This month we surveyed 1,087 U.S. consumers. SurveyMonkey then utilizes Census data to balance respondents

by gender and age so that the sample aligns with the U.S. population. We added a question addressing the

evolving Internet streaming services market, and have begun tracking consumers’ use of new competitors’

services and their effects on the market’s veteran companies.

Summary of Findings • Our first topic this month is the rate of cable “cord cutting,” which has risen consistently throughout our

first four surveys and shows no sign of stopping. Add-on services are the most affected form of cable. Our

survey respondents have instead opted for over-the-top (OTT) services like Netflix Inc. (NFLX) and Hulu LLC.

Those ages 18 to 60 are more likely to have canceled their cable subscription compared with a month ago.

Numerous companies are entering the TV streaming space to claim their piece of the pie.

o 35.4% of respondents do not have any form of cable in their household, a 5.5 percentage-point increase quarter to quarter.

o The number of respondents with cable and add-on services decreased 4 percentage points quarter to quarter.

• We initiated coverage of cord cutters’ preferred OTT services. Netflix currently dominates the space, but the

market likely will be reshaped by HBO Go (Time Warner Inc./TWX) becoming a standalone service in 2015,

CBS Corp. (CBS) launching CBS All Access, and Sony Corp. (TYO:6758) releasing its PlayStation Vue online

TV service.

o Netflix (45.9%) is respondents’ most frequently used OTT service, followed by Google Inc.’s (GOOG/GOOGL) YouTube (29.4%), Amazon.com Inc.’s (AMZN) Amazon Instant Video (16.8%), and Hulu (10.4%). 18.4% of respondents use both Hulu’s Plus and free service.

o Amazon Instant Video, both Hulu services, Netflix and HBO Go are used mostly by our younger respondents, specifically those under 44 years of age.

• In their midterm elections, Alaska, Oregon and Washington, D.C., all passed measures to make marijuana

legal. Growing support from those 45 and older helped push these measures through. We expect the

legalized marijuana market to gain further support and to grow exponentially.

o 41% of respondents believe marijuana should be legal, a relatively stable consensus quarter to quarter.

o Respondents 45 and older now are more likely to support marijuana legalization than in the previous quarter, while those younger than 45 are less likely to support legalization than in the previous quarter.

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• In the grocery market, specialty stores are fighting to shed their expensive images and to retain their hold

on the coveted organic produce segment. Local grocery store chains still dominate the space, while big-box

retailers are starting to suffer.

o 60.2% of respondents shop at local grocery store chains like The Kroger Co. (KR) and Safeway Inc. (SWY), an almost 1 percentage-point decrease quarter to quarter. Respondents’ grocery shopping dropped almost 1

percentage point at big-box stores, and rose almost a percentage point at specialty stores and farmers market.

Topics

1) Cutting the cord: not a fad.

The number of respondents without cable continues to rise quarter to quarter. Add-on services are the form of

cable being the most affected by the rising OTT use; respondents in all age groups have decreased their use

of these add-on services. Cord cutting has increased particularly among those below the age of 60. Set-top

boxes like Roku and Apple TV are helping this trend and boosting the 146% increase in the number of unique

monthly TV Everywhere and online TV viewers compared with last year. As consumption of OTT rises, so does

the supply of OTT services. Sony launched its PlayStation Vue OTT service with 75 channels in beta. ESPN (a

joint venture between The Walt Disney Co./DIS and Hearst), CBS’ Showtime and HBO Go will offer standalone-

streaming services. Cable companies are raising rates, and Time Warner is putting data caps on its services to

help combat the drop in pay-TV subscribers. Both developments are sure to help push more consumers toward

OTT services.

Do you use cable in your household?

• 35.4% of respondents do not have any form of cable in their household, a 5.5 percentage-point rise quarter to

quarter.

• The number of respondents with cable and add-on services decreased 4 percentage points quarter to

quarter.

• The number of respondents age 45 and older never having cable increased quarter to quarter.

• All age groups decreased their use of add-on cable services quarter to quarter.

• Respondents age 60 and below were more likely to cancel their cable subscription than a month ago. The

number of respondents 45 to 60 years old who have cut the cord has risen 6 percentage points.

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2) Netflix dominates the OTT space, but a flood of competitors is heading its way.

OTT services are a new topic this month. Many companies are entering the space in light of the rising number

of consumers without cable services. Netflix dominates the streaming market, followed by YouTube, Amazon

Instant Video, and Hulu. When combining both Hulu’s Plus and free services, the company would take the

third spot above Amazon Instant Video. Consumers under the age of 44 are driving this rise in OTT services

adoption, specifically those 18 to 29 years old. Finding places to stream shows and movies is becoming easier

thanks to WhereToWatch, which acts as a search engine for streaming services. HBO and CBS announced

standalone content services. CBS also made an agreement to show programming over Sony’s PlayStation Vue

streaming service. Sony and DISH Network Corp. (DISH) are having problems with reducing consumer prices

before entering the OTT market; Sony’s new service could be priced at $60 to $80. The PlayStation Vue could

kill cable but still lacks sports streaming.

What online streaming TV services do you use?

• Netflix (45.9%) is the most frequently used OTT service, followed by YouTube (29.4%), Amazon Instant

Video (16.8%), and Hulu (10.4%), with both Hulu Plus and free services being used by 17% of respondents.

• Amazon Instant Video, both Hulu services, Netflix and HBO Go are all adopted the most by respondents 43

or younger.

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3) Marijuana legalization backed at the midterm polls.

Legalization support remained stable compared with last quarter. Those wanting marijuana controlled on

a state-by-state basis dropped 2.5 percentage points. Support grew among those older than 45 and those

with household incomes below $49,999. Voters in Oregon, Alaska and Washington, D.C., approved legalized

marijuana, joining the ranks of Washington state and Colorado. Other states and cities, including New York

City, are lessening the punishment for marijuana offenses. The industry could be worth $35 billion by 2020 if

the federal government legalizes marijuana.

What should the current law be regarding marijuana?

• 41% of respondents believe marijuana should be legal, a relatively stable consensus quarter to quarter.

• Those wanting marijuana controlled on a state-by-state basis dropped 2.5 percentage points quarter to quarter.

• Respondents 45 years and older now are more likely to want marijuana legal than in August, while those

younger than 45 are less likely to support legalization.

• Households with incomes below $49,999 are more likely to support legalization compared with the previous

quarter, while those with incomes above $50,000 are less likely to do so.

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4) Specialty stores fight high-priced stigma, while local chains dominate the grocery market and take business from big-box retailers.

Local grocery store chains still dominate the grocery market quarter to quarter. Specialty stores such as Whole

Foods Market Inc. (WFM), Trader Joe’s and Sprouts Farmers Market Inc. (SFM) are gaining in popularity quarter

to quarter and are driven by those above the age of 30 and with households with incomes above $100,000.

Big-box retailers are losing some grocery consumers with incomes below $24,999. Specialty grocery stores

have been benefiting from demand for organic produce, but now competition in the space is greater than ever.

Whole Foods is trying to increase its customer base by introducing a ranking system for its produce based on

its suppliers’ farming practices, and has put great effort into shedding its “whole paycheck” image. One survey

found that 72.2% of customers in the Lancaster County, PA, area thought Whole Foods was not too expensive.

Walmart Store Inc. (WMT) is not taking the rise in specialty stores sitting down; it has launched 70 stores from

its smaller grocery format and increasing its retailer plans to open more than 100 Neighborhood Markets in the

current quarter.

Where do you shop for the majority of your groceries?

• 60.2% of respondents shop at local grocery store chains like Kroger and Safeway, an almost 1 percent-

age-point decrease quarter to quarter. Big-box stores dropped almost 1 percentage point, while specialty

stores and farmers markets rose a percentage point.

• Specialty stores are losing consumers ages 18 to 29 but gaining those 30 and older. Big-box stores are

gaining customers 44 and below and losing consumers age 45 and above.

• Households with incomes below $24,999 are moving away from specialty and big-box stores, and going to

local grocery store chains.

• Households with incomes above $100,000 are frequenting specialty grocery stores more than in the

previous quarter.

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5) GMO laws fail despite high desire for labeling.

The number of respondents who oppose GMO foods and do not buy them rose slightly quarter to quarter,

but at the same time those in favor of GMO products also increased slightly. Respondents older than 45 are

leading the opposition against GMO foods, while those younger than 45 are becoming less opposed to GMO

foods. Most respondents believe GMO foods should be labeled, but the percentage of those wanting labeling

dropped 3 percentage points quarter to quarter. This drop is directly related to the millions of dollars being

spent in anti-GMO labeling law campaigns and due to lawsuits such the one in Vermont. Meanwhile, Monsanto

Co. (MON) and Dow Chemical Co. (DOW) are suing Maui after the Hawaiian island passed a law banning the

cultivation of GMO crops. GMO labeling laws in Oregon’s November midterm election polls failed by 1.2%. A

Blueshift researcher in Oregon observed numerous anti-GMO labeling commercials running consistently for the

two weeks leading up to midterm elections. Colorado also failed to pass its GMO labeling law.

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What are your views on GMO foods?

• 35.2% of respondents oppose and do not buy GMO foods, up 1 percentage point quarter to quarter.

• 16.5% of respondents oppose but still buy GMO foods, a 2.5 percentage-point decrease.

• 10.2% of respondents are in favor and buy GMO foods, a 1.5 percentage-point gain quarter to quarter.

• Respondents 45 and older are the most opposed to GMO foods, while those younger than 45 are

becoming less opposed the GMO foods.

• Respondents with household incomes of $50,000 to $99,999 are the most opposed to GMO foods, while

those making at least $150,000 rose the most in opposition quarter to quarter, up 2 percentage points.

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Should GMO foods be labeled?

• 80.2% of respondents want GMO foods labeled, a roughly 3 percentage-point decrease quarter to

quarter.

• 5.5% of consumers do not want GMO foods labeled, a 1.5 percentage-point increase quarter to quarter.

6) Residential solar adoption stutters even while prices fall in line with grid electricity rates.

Potential adoption of solar power for the next six months dropped 1.5 percentage points quarter to quarter.

Only those ages 45 to 60 and those with household incomes of $150,000 or more or less than $24,999

were more likely to adopt solar power than in the previous quarter. This was related to respondents’ lack of

knowledge about declining solar system prices. Mother Jones predicts that by 2016 all but three states will

see solar prices at or lower than grid electricity rates. Some utility companies are trying to remain relevant by

leasing thousands of residential rooftops and building solar installations. Edison International (EIX) and NRG

Energy Inc. (NRG) plan to take advantage of the residential growth predicted to exceed 1 gigawatt this year, or

165,000 homes. NRG also plans to offer residential installers such options as complementary grid system sales,

backup generation and other energy products and services.

How likely are you to adopt solar power in your home during the next six months?

• 29.5% of respondents are likely to adopt or already have adopted solar power in their homes in the next six

months, but this represents an almost 1.5 percentage-point drop quarter to quarter.

• Respondents 45 to 60 years old were the only age group to become more likely to adopt solar power in the

next six months, up almost 5 percentage points from August, and tied with those ages 18 to 29.

• Households with incomes $150,000 or more are the most likely to adopt solar in the next six months,

followed by those making $24,999 or less.

• Households making less than $24,999 rose the most compared with the previous quarter, up 8

percentage points.

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7) Mobile wallet adoption dips because of the limited number of participating merchants.

Mobile wallet adoption took a slight dip since September, but is being led by those ages 18 to 29. The buzz

created by the launch of Apple Pay has quieted a bit; consumers are testing but not yet fully adopting the

new payment services. Still, Google Wallet relies on the same NFC chip as the Apple Pay, and saw transactions

grow 50% in recent months. The limited number of merchants accepting mobile wallet payments continues

to be an issue, as are the varying forms accepted by different retailers. CVS and Rite Aid closed their doors to

Apple Pay exclusively use Merchant Customer Exchanges’ CurrentC mobile payment option. Meanwhile, one

review of Apple Pay showed a lack of consistency within different stores. A boost for mobile payments may

come from Alibaba Group Holding Ltd.’s (BABA) willingness to work with eBay Inc.’s (EBAY PayPal and Apple

Inc. (AAPL).

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Have you used a digital or mobile wallet in last month?

• 33% of respondents have used a digital or mobile wallet in the last month, a 3.5 percentage-point drop

since September.

• Respondents ages 18 to 29 are leading in digital or mobile wallet adoption, with 40.1% using a digital or

mobile wallet in the last month.

• Digital or mobile wallet adoption has dropped 8 percentage points since September among those ages

45 to 60.

8) iPhones dominate smartphone market, but sales are from the faithful, not new users.

Apple’s iPhones remain the dominant player in the smartphone space, but took a 1 percentage-point dip

in usage quarter to quarter. Samsung Electronics Co. Ltd. (KRX:005930) retained its second seat, but also

dropped 3 percentage points quarter to quarter. Although respondents ages 18 to 29 are the primary iPhone

adopters, those ages 45 to 60 are increasing their iPhone adoption quarter to quarter. Higher-income

households were more likely to have an iPhone, while those making between $50,000 and $99,999, as well as

those making less than $24,999, are more likely to have a Samsung phone. Samsung is trying to more directly

woo Apple’s higher-end clientele by focusing on curved-screen phones that address the growing trend of

larger phones. One analyst expects Apple to sell copious amounts of iPhone 6 and 6 Plus devices this holiday

season. However, these sales are largely to Apple’s already faithful followers. BlackBerry Ltd.’s (BBRY) latest

smartphone platform, Enterprise Service 12 (BES12), can be integrated with iOS and Android software and

already has partnerships with Samsung and Salesforce.

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Who made the smartphone you currently own?

• 34.5% of respondents have an iPhone, a 1 percentage-point dip quarter to quarter, while 20.9% of

respondents have a Samsung phone, a 3 percentage-point drop.

• iPhone sales still are led by those ages 18 to 29, but those ages 45 to 60 are more likely to have an iPhone

than in the previous quarter.

• Respondents with higher incomes were more likely to have an iPhone.

• Respondents with incomes between $50,000 and $99,999 were the most likely to have a Samsung phone,

followed by those making below $24,999.

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9) Google is the most trusted site for reviews; Facebook has entered the reviewer space.

Respondents trust Google the most in terms of offering online merchant reviews, followed by Yelp Inc. (YELP)

and Angie’s List Inc. (ANGI). Google and Yelp are the top two choices among those 60 and younger, while

older respondents trust Google and Angie’s List. The number of respondents trusting Yelp decreased the most

since September, down 0.5 percentage points. Facebook is the latest entrant to the space and will be added to

next month’s Trends Tracker. Its new Places Directory allows users to find restaurants, hotels, bars, etc. in any

city, and ranks them by consumer reviews. Its entrance is well timed given that millennials already are using its

site rather than Yelp and Angie’s List for reviews.

Which site do you trust the most for consumer reviews on merchants?

• 36.5% of respondents trust Google the most for merchant reviews, an almost 1 percentage-point increase

compared with September.

• 24.6% trust Yelp for merchant reviews, a 0.5 percentage-point decrease since September.

• Respondents ages 18 to 29 are more trusting of Yelp, followed by Google.

• Respondents ages 30 to 44 are more trusting of Yelp, followed by Google.

• Respondents ages 45 to 60 are more trusting of Google, followed by Yelp.

• Respondents age 60 and older are more trusting of Google, followed by Angie’s List.

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10) Gaming usage is stable as competition emerges.

Video game usage remained stable quarter to quarter. Computer gaming retained its No. 1 position as the most

common platform, followed by smartphone and console gaming. Console gaming has risen among those 30

to 44 and households making less than $49,999 or more than $150,000. Smartphone gaming is increasing

with those ages 18 to 29 and households making less than $49,999 or more than $150,000. Tablet gaming

is gaining users above the age of 45. Although respondents do more gaming via smartphones than through

consoles, gaming revenues have not followed suit. Still, Newzoo predicts this trend will change in 2015 and will

mark the first time smartphone revenue surpasses console. Some even think smartphone gaming is closing

the gap on computer gaming. One beneficiary is Advanced Micro Devices Inc. (AMD), which supplies chips for

smartphones, tablets, notebooks and various devices.

The console gaming market is a battleground for Microsoft Corp. (MSFT), Sony and Nintendo Co. Ltd.

(TYO:7974) as new competition is emerging from NVIDIA Corp.’s (NVDA) Android-based Shield console and

Google’s Android-based Nexus player. Microsoft cut prices on its Xbox One and saw sales triple after Nov. 2,

surpassing the PS4 for the first time.

How do you play the majority of your video games?

• Video game usage quarter to quarter remained relatively stable, with the top three types of gaming remained in

the same order: computer, smartphone and console.

• Console use rose among those ages 30 to 44 and dropped for those ages 45 to 60.

• Smartphone gaming increased among those ages 18 to 29 and decreased among those ages 30 to 44.

• Tablet use decreased among those ages 18 to 29 and rose among those over the age of 45.

• Console use rose among respondents making $49,999 or less and $150,000 or more quarter to quarter, and

decreased for those making between $50,000 and $99,999.

• Smartphone gaming rose in households making less than $24,999 and $150,000 or more quarter to quarter,

decreased in those making $50,000 to $99,999, and stayed relatively the same for households making

$100,000 to $149,999.

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11) Likelihood of wearable technology adoption eroding.

Respondents wanting to adopt wearable technology dropped 5.5 percentage points quarter to quarter. All

but those ages 45 to 60 have become less likely to adopt wearable technology in the next three months.

Our survey shows a lower adoption rate than the reported 20% of U.S. adults who already taken on wearable

technology. Also, we agree that those ages 18 to 29 are the most eager to adopt these technologies, even

though we saw their desire drop quarter to quarter. Analysts believe the next step for wearable tech is in the

workplace, which coincides with a recent study done by Harris Interactive. Wearables must become practical

and usable, which Sabre Corp. (SABR) is attempting by integrating travel services into wearable devices. The

release of the Apple Watch has been delayed until spring of next year because of battery life issues.

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How likely are you to adopt wearable technology in the next three months?

• 68.3% of respondents are not at all likely to adopt wearable technology in the next three months, a 5.5 percent-

age-point rise quarter to quarter.

• Respondents who already have adopted wearable technology dropped 1.5 percentage points.

• All but those ages 45 to 60 are less likely to adopt wearable technology in the next three months.

12) Fast food takes hit as respondents continue to improve living habits.

Twice the number of respondents have improved their living habits as those who reported a decline. Fast-food

consumption is dropping in the United States, and hospitals are abandoning their contracts with fast-food

restaurants. Declining soda consumption coupled with the rising interest in staying healthy led Berkeley, CA,

voters to pass the first-of-its-kind soda tax. Fast-food companies are trying to lure consumers away from

fast-casual dining places like Chipotle Mexican Grill Inc. (CMG) by offering free Wi-Fi and ordering apps.

Compared to six months ago, how have your living habits (diet, exercise, sleep, etc.) changed?

• Twice the number of respondents reported an improvement in their living habits (40.6%) as those who

reported a decline (19.3%).

• Those improving their living habits decreased by almost 9 percentage points quarter to quarter.

• The number of respondents reporting worsening habits increased 3.5 percentage points quarter to quarter.

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13) Ecigarette use stable, growing among U.S. youth.

Cigarette use grew 1 percentage point among U.S. adults quarter to quarter, with regular cigarettes being

the most commonly consumed form of tobacco. Roughly 19% of our respondents smoke tobacco, falling in

the CDC’s range of U.S. tobacco smokers. Ecigarette use remained stable quarter to quarter, but increased

among respondents younger than 44 and those with household incomes of $25,000 to $49,999. The

30-to-44 age group held the most tobacco smokers, a changes from previous Trends Trackers. The CDC has

found high schoolers to be the main users of ecigarettes, but our survey does not include consumers 18 and

younger. Ecigarette makers are shifting from tobacco to cannabis oil as states legalize marijuana. Meanwhile,

Winchester, MA, is trying to ban all tobacco products within city limits.

How do you smoke most of your tobacco?

• 80.9% of respondents do not smoke tobacco, a 1 percentage-point decrease quarter to quarter.

• Cigarette smoking decreased almost 1.5 percentage points quarter to quarter, but remains the top method

for tobacco consumption.

• Those 30 to 44 years old are now the survey’s primary age group for tobacco consumption.

• Ecigarette usage rose from those ages 44 and below, while those ages 45 and above decreased their ecig

usage quarter to quarter.

• Households making $24,999 and below are still the most likely to smoke tobacco, while tobacco smokers

making $150,000 grew 11.5 percentage points.

• Ecigarette use fell by half among those making less than $24,999, but rose almost 3.5 percentage points

among those making $25,000 to $49,999 quarter to quarter.

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14) Relief for slow Internet on the way.

Internet slowness and delays are still experienced by approximately one-third of respondents. U.S. Internet

speeds as a whole are slower than in other countries given the minimal amount of competition in the

broadband industry, an issue that could worsen as Comcast Corp. (CMCSA) tries to buy Time Warner Cable

Inc. (TWC). Comcast is doubling Internet speeds in some areas across the country for free in response to

rising competition. Oregon and Washington state have seen a growing number of fiber Internet companies.

Meanwhile, President Obama has asked the FCC to treat all Internet traffic the same and consider the Internet

as a utility. Elon Musk’s SpaceX program will launch a fleet of micro-satellites, while Google’s “Loon” wireless

balloons could create a network.

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Are you having more problems with slow or delayed Internet compared with six months ago?

• Approximately one-third of respondents are experiencing problems with slow or delayed Internet, a 0.5

percentage-point decrease compared with the previous quarter.

15) Traditional radio is the king of car entertainment.

Traditional radio continues to dominate entertainment in the car. Respondents’ use of satellite radio like

SiriusXM Holdings Inc. (SIRI) and of their smartphones fell compared with September. Use of embedded car

systems remains stable but low. Those 45 years and older have increase their use of embedded car systems

since September, while those ages 18 to 29 rely on their smartphones for in-car entertainment. Satellite radio

is used primarily by those 60 and older. Embedded car systems continue to be a hot topic on Wall Street.

Companies like General Motors Co. (GM) are adding Android systems through a partnership with Google and

Harman International Industries Inc. (HAR) in their next generation of cars. NVIDIA is benefitting from this new

trend as automakers integrate its Tegra chip into their new models. Still, consumers view these features as

aggravating, which could stifle infotainment system adoption.

How do you consume most of your entertainment in your car?

• Traditional radio (57.7%) is still the most used entertainment in cars, up almost 4 percentage points

since September; followed by satellite radio (11.9%), down 2 percentage points since September; and

smartphones (11.1%), down almost 3 percentage points in the same time frame.

• Those 45 years or older are increasing their use of embedded car systems.

• Smartphone use decreased in all age groups since September, but those ages 18 to 29 still use this form

of entertainment.

• Satellite radio is used by those 60 years and older the most (20.1%), but decreased 3 percentage points

since September.

• Households with incomes above $150,000 are more likely to have satellite radio than other age groups

and remained stable compared with the previous two months.

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16) Verizon reigns in the wireless carrier market.

Verizon Communications Inc. (VZ) continues to dominate the wireless carrier market. The number of

respondents using AT&T Inc. (T) has dropped 4.5 percentage points since September, while T-Mobile US Inc.

(TMUS) gained 1 percentage point. Rootmetrics took an in-depth look at wireless carriers in 125 metro areas

and found that Verizon was the overall winner, taking four of the five categories (reliability, speed, data, call

performance and text performance). AT&T claimed the top spot for text performance, while Sprint Corp. (S)

was last in speed, data and call performance. AT&T is offering more data for adopters at no extra cost. The use

of permacookies, which allow marketers to track consumers without their permission, may affect consumers’

choice of carriers. Verizon already uses them, AT&T just terminated its program, while T-Mobile and Sprint are

avoiding them.

Who is your current wireless carrier?

• Verizon remains the most used wireless carrier among respondents (36.7%), a 1 percentage-point rise

since September.

• AT&T dropped roughly 4.5 percentage points but retained the second spot (27%).

• T-Mobile gained 1 percentage point since September to maintain its third position in the wireless market.

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17) Facebook gains users and retains top social media spot.

Facebook Inc. (FB) reigns over other social media platforms, and saw the number of respondents using its

service rise the most, up 3 percentage points quarter to quarter. Facebook’s continued growth, specifically in

users ages 18 to 29, may be linked to changes the site has made in messaging, including its Messenger app,

which hit 500 million active users. The company added 14% of active users year to year to reach 1.35 billion.

LinkedIn Corp. (LNKD) was the second most used social media platform, growing in use among respondents

ages 30 to 44 and those older than 60. Twitter Inc. (TWTR) is benefiting from increased interest from those

18 to 29, while those same users dropped their use of Facebook’s Instagram quarter to quarter. Twitter’s user

growth overall has slowed since last quarter.

Which social media platform do you use the most?

• 59.1% of respondents use Facebook the most, a 3 percentage-point rise quarter to quarter. Respondents age

30 to 44 were the only age demographic to decrease the use of Facebook. Respondents ages 18 to 29 were

the most likely to use Facebook as their primary social media platform.

• LinkedIn was the second most frequently used platform; 7.5% of respondents primarily use the site, an

almost 1.5 percentage-point gain quarter to quarter.

• Instagram is losing its 18- to 29-year-old following, dropping 10.5 percentage points quarter to quarter.

Twitter has gained users in this age group.

• Google+ has lost users ages 45 to 60 quarter to quarter.

• LinkedIn is gaining users 60 or older and those ages 30 to 44 but has lost some users ages 45 to 60.

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18) Robot-assisted surgery charges ahead with consumers on board.

Respondents continue to be comfortable with robot-assisted surgeries; those extremely comfortable with

this type of surgery rose 1.5 percentage points quarter to quarter. Demand for robot-assisted surgeries grew

globally from 80,000 surgeries in 2007, to 500,000 last year. Intuitive Surgical Inc.’s (ISRG) newest Di Vinci

robot, the Xi, now has a home in Alabama and Connecticut. Although the number of surgeries performed

with robot assistance is rising, so are the concerns with such procedures. New studies have found that

robot-assisted surgeries are causing more complications, facing a 3.4% complication rate in surgeries for

oophorectomy vs. 2.1% for conventional surgery.

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How comfortable would you feel with a doctor using a robot to assist in your surgery?

• 81.4% of respondents are slightly or more comfortable with robot-assisted surgery, a 1.5 percentage-point

dip quarter to quarter.

• Those extremely comfortable with robot-assisted surgery rose 1.5 percentage points to 17% compared with

the previous quarter.

19) 11 Main is on the outside looking into the U.S. consumer market.

Alibaba’s 11 Main remains an unknown site in the United States, even after the hype surrounding its parent

company’s IPO. Respondents’ lack of knowledge of the site has been consistent since our first Trends Tracker

in July. However, Alibaba is making waves for U.S. investors as it smashed its previous record sales for its

“Singles Day” and beat analysts’ estimates by 15%. Other companies also took part in the previously obscure

Chinese shopping holiday. Singles Day took place on Nov. 11, after our November survey, but will be reflected

in the December Trends Tracker. Also worth noting is Alibaba’s willingness to work with PayPal and Apple to

expand payment options both domestically and internationally.

Have you heard of 11 Main?

• 97.4% of respondents had not heard of 11 Main, a 1-percentage point drop quarter to quarter.

• Most of those who knew of the site had not used it (1.9%).

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20) First-time home buyers settle to historical averages.

The number of first-time buyers among our respondents rose compared with the previous quarter but fell

month to month. First-time buyers are near the historical norms of 40%, higher than the 33% reported by the

National Association of Realtors. Worth noting is the 1 percentage-point dip in housing affordability during

the third quarter. This may be due to millennials’ desire for a home but their lack of a down payment. Investors

continue to scoop up properties, specifically luxury units, for which sales rose 9% nationwide for houses

over $1 million and up 18% for those costing more than $5 million. Certain U.S. regions, such as Houston, are

experiencing explosive housing sales.

Are you looking to buy a home in the next six months?

• 7.9% of respondents will look for a home in the next six months, a 1.5 percentage-point dip compared with

the previous quarter.

• 41% who will look for a home in the next six months are first-time buyers, a 2 percentage-point rise quarter

to quarter but roughly a 6.5 percentage-point dip from the previous month.

21) More children will go unvaccinated.

Respondents are more likely not to vaccinate their children compared with the previous quarter, but still largely

back childhood vaccinations. One in 10 respondents ages 18 to 29 believe children should not be vaccinated.

Concerns of unvaccinated children are spreading throughout the country. Measles outbreaks doubled in June

compared with May.

Should children be vaccinated?

• 92.8% of respondents believe children should be vaccinated, a roughly 2.5 percentage-point decrease

quarter to quarter.

• More respondents in all age groups now believe children should not be vaccinated. In particular, 11.5% of

respondents ages 18 to 29 believe children should not be vaccinated, a 5.5 percentage-point gain quarter

to quarter.

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22) Consumers confused over country’s economic prospects but blame neither major political party.

Roughly one half of our respondents believing the United States’ economic prospects are declining, while

the other half believes the economy is improving. Most respondents neither credited nor blamed the major

political parties. Unemployment rates have dropped to the lowest they have been since 2008, but wages are

stagnant. In addition to this mixed data, companies that are hiring mostly in the leisure and hospitality fields,

which do not generate as much economic growth as factory work, for which hiring has slowed. The elimination

of high tariffs for high-tech items from China could open up trading and perhaps boost employment in the

United States.

Do you think economic prospects in the United States are improving or declining, and which political party

is responsible?

• 51.8% of respondents believe the United States’ economic prospects are declining, a 0.5 percentage-point

drop compared with the previous quarter. 48.2% believe economic prospects are improving, a 0.5

percentage point rise.

• 44.6% do not believe any party is responsible for the country’s economic prospects, a 1 percentage-point

dip compared with the previous quarter.

• Respondents ages 18 to 29 are the most likely to believe neither major political party is responsible, a

consistent trend quarter to quarter.

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23) Health, Google, savings and security are the top apps being downloaded by respondents.

Respondents’ choice in apps showed a desire for life enrichment, including health, communication, security,

saving money, and entertainment/music. Candy Crush was the only game app repeatedly mentioned.

What apps/mobile games are you using now that you were not using a month ago?

• Health trackers (diabetic tracker, heart rate monitor)

• MyFitnessPal

• Spotify

• Google apps (Google, Maps, Fit, Messenger, Voice, Inbox)

• Translation app

• GoPro

• Security apps

• Gilt

• GasBuddy

• Walmart’s Savings Catcher

• Coupons app

• Candy Crush

24) New trends: Ebola paranoia, Yik Yak, locally grown food, and cheaper gas.

Respondents have a ground-level, in-depth look at the world around them and the emerging trends taking

hold. The following are the top new trends noticed or experienced by our survey participants.

What is the most interesting new trend you have seen in the last month?

• Republicans taking control of the country, and Obama-hating

• Ebola paranoia

• Online privacy and security concerns

• Mobile wallets, specifically Apple Pay

• Yik Yak

• Cheaper gas

• More online surveys

• Wearable technology for health reasons

• Purchasing and using locally grown food

• 3D printing

• Girls with brightly colored hair

• Streaming TV

• Millennials driving less

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The Author(s) of this research report certify that all of the views expressed in the report accurately reflect their

personal views about any and all of the subject securities and that no part of the Author(s) compensation was,

is or will be, directly or indirectly, related to the specific recommendations or views in this report. The Author

does not own securities in any of the aforementioned companies.

OTA Financial Group LP has a membership interest in Blueshift Research LLC. OTA LLC, an SEC registered

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