7 predictions about the future of media

7 PREDICTIONS ABOUT
THE FUTURE OF MEDIA

BI Intelligence

Providing in-depth insight, data, and analysis of everything digital.


1. DIGITAL WILL INHERIT THE EARTH


DIGITAL MEDIA CONSUMPTION IS GROWING,
EVERYTHING ELSE IS SHRINKING
US Consumer Media Consumption Share

2011

2012

2013

2014

2015
43.2%

40.9%

Mobile

35.2%

30.0%

Desktop/laptop
14.0%

12.0%
6.6%

TV

Radio

2.9%

Print

5.8%

3.3%

Other

Digital
Source: eMarketer


And averages do not tell
the whole story…

THE SHIFT IS GENERATIONAL
Top 5 Media Mentions Among All Adults, 2013

Aged75+
Aged65-74
Aged55-64
Aged45-54
Aged35-44
Aged25-34
Aged16-24
Total

WatchTV
Readnewspapers/
magazines
Listentotheradio
Goonlineonacomputer/
laptop/netbook/tablet
Useasmartphone

0

20

40

60

80

100
Source: Ofcom


GENERATIONS HAVE A PREDICTABLE LIFE CYCLE…

Source: Goldman Sachs


MILLENNIALS AND GEN Z

•  First digital native generation(s)
•  Already 45% of population and largest share of earners
•  Profoundly different media habits


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

30
Hoursspent

25

26

20
15

16

10
5
0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015
*Traditional TV refers to all live + DVR/time-shifted TV viewing during the quarter.
Source: Nielsen


Meanwhile…


DIGITAL MEDIA CONSUMPTION GROWING EVERY
YEAR, ESPECIALLY MOBILE

Totalminutes(MM)

Growth In US Digital Media Time Spent
Desktop
MobileApp

MobileBrowser
118,299

97,440
77,081

409,847

778,954
621,410

476,553

480,967

550,522

Jan-13

Jan-14

Jan-15

MOBILETIMESPENT

Source: comScore Media Metrix Multi-Platform & Mobile Metrix;
US, Total Audience


MILLENNIALS CHECK THEIR PHONES
EVERY 10 MINUTES

Source: Kana Software


My smartphone never leaves my side,

night or day
87.0%

THEY KEEP THEM IN
REACH 24 HOURS A
DAY
12.0%
2.0%
Agree

Disagree

Notsure

Source: Zogby Analytics, cited by KPCB (Mary Meeker – LinkedIn slideshare)


When I wake up, the first thing I do is reach for
my smartphone
80.0%

THEY CHECK THEM
FIRST THING IN THE
MORNING
18.0%
2.0%
Agree

Disagree

Notsure

Source: Zogby Analytics, cited by KPCB (Mary Meeker – LinkedIn slideshare)


So here’s a glimpse at the past,
present, and future of media…


THE PAST (~2000): 3% DIGITAL
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Smartphone
Computer/laptop/tablet
Radio
Print
TV

Source: Ofcom

THE PRESENT (~2015): 40% DIGITAL
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Smartphone
Computer/laptop/tablet
Radio
Print
TV

Source: Ofcom


THE FUTURE (~2030): 80%+ DIGITAL
100%
90%
80%
70%
60%
50%

40%
30%
20%
10%
0%

Smartphone
Computer/laptop/tablet
Radio
Print
TV

Source: Ofcom


2. SUBSCRIPTIONS FOR THE WIN!


Remember when pundits said
digital content had to be free
because no one would ever pay?


Oops.


STREAMING VIDEO SUBS CLIMBING FAST
Streaming Video Subscription Revenue
US

11.5
9.2

4.0

2014

4.8

2015E

BillionsUSD

7.3
5.8

2016E

2017E

2018E

2019E

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).


MUSIC SUBS ARE CLIMBING FAST
Streaming Music Paid Subscribers

US

16.5

18.7

20.6

14.0
Billions

11.4
8.7

2014E

2015E

2016E

2017E

2018E

2019E

Source: BI Intelligence estimates based on historical data from the RIAA


EVEN “PRINT” SUBS ARE CLIMBING FAST

New York Times Digital Revenue

$120

Global

$80
SubscripZons

$60

Millions

$100

$40
AdverZsing

Q113

Q213

Q313

Q413

Q114

$20
Q214

Q314

$-
Q414
Source: The New York Times


The new pundit story is that there’s
one right model — subs or ads


The truth is that both work,
as do a la carte sales.