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The Technology, Media & Telecommunications (TMT) series

presents:

The State of the Media Democracy:


Generational Shifts in Media
Consumption and Creation
Tom Sauer, Ed Moran, Jim McDonnell

January 28, 2009


Presenters

Tom Sauer, AT&T


• VP, Corporate Strategy

Ed Moran, Deloitte Services LP


• Director of Product Innovation

Host:
• Jim McDonnell, Deloitte Consulting LLP
‒ Principal

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Agenda

About the Deloitte State of the Media Democracy, Third Edition

Select Findings

Discussion/Q&A

Copyright © 2009 Deloitte Development LLC. All rights reserved.


About the Deloitte State of the
Media Democracy, Third Edition

Copyright © 2009 Deloitte Development LLC. All rights reserved.


About Deloitte‟s “State of the Media
Democracy” Survey
• This is the third U.S. edition of research that was commissioned by Deloitte’s
Media & Entertainment practice. The survey provides a “reality check” on how
consumers between the ages of 14 and 75 are “consuming” media — and
what their preferences might be in the future
• Focusing on four generations, it was fielded by Harrison Group (an independent
research firm in CT) from September 17th — October 20th, 2008
• An online methodology was utilized among 2,056 U.S. consumers ages 14-75
• We also conducted the survey in the UK, Germany, Japan and Brazil.
• Several clients helped us shape the survey and discussed the initial
results with us
• For meaningful differences, we look for differences in year/year tracking and
generations of at least 5 percentage points — for data in hours, we look for
year/year differences of 0.5 hours and 1.5 hours when comparing generations
• We repeat the survey annually

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Why a Media Democracy?

Because this is a global age


in which everybody
contributes — not just the
traditional media companies.

Empowered by new
technologies, customers now
"vote“ through their actions
for new sorts of content, new
access devices, distribution
platforms, advertising
models, and pricing schemes.

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Talking „Bout the Generations

Millennials: 14-25 2008 U.S. Population*


• Trailing Millennials: 14-19 80
• Leading Millennials: 20-25
(Birth Years: 1994 -1983)
60

Millions of people
Generation X: 26-42
(Birth Years: 1982 -1966) 40

Baby Boomers: 43-61 20


(Birth Years: 1965 -1947)

0
Matures: 62-75 Millennials Generation X Boomers Matures

(Birth Years: 1946 -1932)


*U.S. Census Bureau - Population Division
U.S. Interim Projections 2000 - 2050

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Poll question #1

• In the U.S., advertisements in which medium are deemed most


impactful on buying decisions?
a. Ads in video games
b. Ads on the radio
c. Ads on TV
d. Ads online
e. Ads in magazines

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Select Findings

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Advertising 3.0

• The emergence of new marketing and advertising channels have created


new ways to reach specific consumers.
‒ Advertising on television remains the most influential media influence
‒ Magazines and online are tied for second, rounding out a top three media that is
consistent with the previous surveys
‒ Six-in-ten consumers and almost 70% of females tend to pay greater attention to
magazine ads than those on the Internet
‒ Over half of consumers and almost 60% of females say the same for newspaper ads
‒ Search engine result advertising continuing to be the top online influence, followed by
banner advertising — both of which exhibit a significant increase from last year’s results
‒ Willingness to pay for ad-free content has declined since last year, still 26% of US
consumers are interested in doing so

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Most Influential Advertising (US)
• Advertising on television remains the most influential influence
• Magazines and online are tied for second, rounding out a top three media that is consistent with the previous
surveys
• Newspapers rank significantly higher among Boomers/Matures; radio shows a more consistent ranking

Q. When you encounter ads in the following media, which have the most impact on your buying decision?

Advertising Types with Impact (Rated as a “Top 3” Influence)


Absolute levels of items rated in “top 3” are not
Millennials Xers Boomers Matures
directly comparable across waves due to an 3rd Edition %
% % % %
expanded list in 2008

TV #1 88 85 89 92 84

Magazines #2 49 44 47 50 56

Online #3 48 52 60 41 35

Newspapers #4 42 24 32 53 71

Radio #5 27 22 27 29 31

Billboards or outdoor advertising #6 10 9 8 13 12

Social networking sites #7 8 14 7 4 3

In-theater advertising #8 7 12 6 5 3

DVDs #8 7 9 9 5 2

Blogs #9 6 9 8 4 2

Video Games #10 4 11 2 - -

Mobile Phone #11 3 5 2 1 1

Virtual worlds #12 1 3 - 1 -

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Most Influential Advertising (Multinational)
• According to consumers in all five countries, advertising on television has the most impact on buying decisions.
• Magazines, online ads, and newspapers occupy a second-tier of influence on buying decisions across all countries.
• Although they represent a small minority, some consumers in all countries consider cell phone advertising the
MOST influential form of overall advertising; Brazil leads with 19%.

Q. When you encounter ads in the following media, which have the most impact on your buying decision?

Advertising Types with Impact (Rated as a “Top 3” Influence) “T”=Tied


Rank within country US UK Germany Japan Brazil
% % % % %

TV #1 88 #1 84 #1 73 #1 90 #1 75

Magazines #2 49 #2 54 #3 50 #4 47 #2 57

Online #3 48 #3 45 #2 57 #2 61 #3 45

Newspapers #4 42 #4 44 #4 49 #3 54 #4 30

Radio #5 27 #5 17 #5 28 #T7 6 #7 13

Billboards or outdoor advertising #6 10 #6 14 #6 21 #T7 6 #6 14

Social networking sites #7 8 #T9 6 #T11 2 #T7 6 #T10 8

In-theater advertising #8 7 #7 11 #7 6 #10 4 #T10 8

DVDs #8 7 #8 8 #8 4 #11 3 #T8 9

Blogs #9 6 #12 4 #T11 2 #5 13 #13 6

Video Games #10 4 #T9 6 #T9 3 #12 2 #T8 9

Mobile Phone #11 3 #11 5 #T9 3 #6 7 #5 19

Virtual worlds #12 1 #13 1 #13 1 #13 0 #12 7

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Print vs. Online Advertising
• In the U.S., six-in-ten consumers and almost 70% of females tend to pay greater attention to print magazine ads
than any type of advertising on the Internet.
• Over half of U.S. consumers and almost 60% of females say the same for newspaper ads.
• Traditional print remains a particularly important advertising outlet among Matures.

Q. Please indicate how much you agree or disagree with the following statements

Summary of Agree Strongly/Somewhat 1st Edition 2nd Edition 3rd Edition Millennials Xers Boomers Matures
% % % % % % %

I tend to pay greater attention to print advertising in


-- 59 61 62 61 56 68
magazines than any type of advertising on the Internet.

I tend to pay greater attention to print advertising in


-- 55 54 45 55 56 67
newspapers than any type of advertising on the Internet.

Summary of Agree Strongly/Somewhat 3rd Edition Total Males Females


% % %

I tend to pay greater attention to print advertising in magazines than any type of
61 55 67
advertising on the Internet.

I tend to pay greater attention to print advertising in newspapers than any type
54 53 56
of advertising on the Internet.

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Most Influential Online Advertising
• A clear “top 2” emerges, with search engine result advertising continuing to be the top influence, followed by banner
advertising — both of which exhibit a significant increase from last year’s results
• Ads embedded in videos have seen as slight increase in their influence as well
• Although it is only a small percentage, 5% do cite cell phone advertising as being the MOST influential form of
online ads
Q. Thinking now about advertisements you encounter online, which type of online advertising influences you the most?

Internet Advertising Influences

2nd Edition % 3rd Edition Millennials Xers Boomers Matures


% % % % %

Search engine result advertising 78 83 78 85 84 88

Banner advertising 60 72 68 71 76 71

Advertising I interact with that provide


62 57 49 54 64 69
information/entertainment

Pre-roll advertising (ones you must view first before


31 34 36 31 36 34
viewing a video)

Advertising embedded in videos (on the screen while a


17 25 26 30 22 21
video is playing)

Advertising or products placed within video games 15 14 23 13 9 6

Post-roll advertising (additional information that is


19 15 14 17 13 14
provided after a video)

Advertising or products placed within online virtual worlds


17 14 20 15 12 7
(i.e. Second Life; There.com, MTV’s Virtual World, etc.)

Advertising I receive on my mobile phone -- 5 6 5 4 4

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Anyone for Ad-Free Online Content?
• Willingness to pay for ad-free content has declined since last year, still ¼ of US consumers are interested in doing
so
• Among those who would be willing to pay, the proportion who feel that $25+ is a fair price has held steady (and is
highest among Millennials)

Q: Please indicate how much you agree or disagree with the following statements
If you were to purchase online content in exchange for not being exposed to advertisements, what would you consider to be a reasonable amount to
pay over the course of the year?

Summary of Agree Strongly/Somewhat

Millennials Xers Boomers Matures


2nd Edition % 3rd Edition %
% % % %

I would rather pay for online content (news,


information, sports, games, social interaction sites,
37 26 30 25 24 24
movies, music, and TV) in exchange for not being
exposed to advertisements.

$25 or more is a reasonable fee to pay per year for


online content in exchange for not being exposed to
advertisements

Among those who agree they would rather pay for ad-
60 56 60 54 53 55
free online content

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Poll question #2

• What percentage of Americans overall would pay an annual


subscription fee to watch their favorite TV shows without
advertisements?
a. 12%
b. 32%
c. 53%
d. 77%
e. 88%

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Print Advertising — Attitudes
• A strong majority (71%) feel that printed magazines are enjoyed despite knowing the same information could be
found online. In fact, six-in-ten tend to pay greater attention to magazine ads than those on the Internet (true for
newspaper ads as well among over half of respondents) — similar to previous measurements
‒ Traditional print remains a particularly important advertising outlet among Matures
• As seen earlier in relation to the economy, interest in learning about new things through advertising is diminished
from 2007 levels, as is willingness to pay a subscription for TV shows if shown without advertising (advertising has
an accepted presence in non-premium television)
Q. Please indicate how much you agree or disagree with the following statements

Summary of Agree Strongly/Somewhat

1st Edition 2nd Edition 3rd Edition Millennials Xers Boomers Matures
% % % % % % %

I enjoy reading printed magazines even though I know I


71 74 71 69 75 67 74
could find most of the same information online.

I tend to pay greater attention to print advertising in


-- 59 61 62 61 56 68
magazines than any type of advertising on the Internet.

I tend to pay greater attention to print advertising in


-- 55 54 45 55 56 67
newspapers than any type of advertising on the Internet.

An important feature of printed magazines is the advertising


57 63 53 56 55 49 50
that helps me learn about new things for my family and me.

I would pay an annual subscription fee for my favorite TV


-- 39 32 36 34 27 30
shows to watch them without advertisements.

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Appointment TV Redux

• The adoption of the DVR has created a new, growing model for watching
TV.
• Consumers (mostly Gen Xers) place a relatively higher value on being
able to watch what they want on their own schedule — creating a new
version of “appointment TV.”
‒ Consistent with our 2nd Edition, US consumers as a whole (66%) continue to rate TV
as their most preferred type of media
‒ Xers continue to lead the DVR revolution, filtering 56% of their TV viewing through them
‒ The freedom of time-shifting the recorded program continues to be most important to
DVR owners, followed by recording to ensure episodes are not missed

Copyright © 2009 Deloitte Development LLC. All rights reserved.


TV Rules the Roost

• Consistent with our 2nd Edition, US consumers as a whole continue to


rate watching TV as their most preferred type of media
‒ Millennials are more fragmented, with TV, music, movies, and to a somewhat lesser
extent, Internet, all playing an important role
Q. For the following types of media, please rank your top 3, with 1 being the most preferred

Preferred Media: Summary of “Top 3” Ranking

2nd Edition % 3rd Edition % Millennials Xers Boomers Matures


% % % %

Watching television 66 66 47 73 76 75

Watching movies at home 40 51 43 62 57 45

Music/Radio (Net) 43 48 58 43 49 40

-Listening to music (using any device) 43 34 49 29 30 22

-Listening to the radio (any method) na 14 9 14 19 18

Going to the movies 25 29 42 32 24 19

Using the Internet for social or personal interests 42 38 39 39 29 19

Reading books (printed or online) 26 28 22 23 31 43

Playing video games (any method) 21 21 34 19 14 10

Listening to the radio (any method) - 14 9 14 19 18

Reading magazines (printed or online) 16 12 7 9 13 18

Reading newspapers (printed or online) 21 17 3 7 14 31

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


DVR Television Viewing

• Xers continue to lead the DVR revolution, filtering 56% of their TV viewing
through them
• DVR ownership, and the proportion of TV hours being watched “filtered” has
remained steady since 2007
Q. Approximately what proportion of your TV viewing do you watch recorded through your DVR/TiVo?

1st Edition Millennials Xers Boomers Matures


2nd Edition % 3rd Edition %
% % % % %

Own a Digital Video Recorder (DVR, TiVo) 26 31 33 35 39 31 24

DVR Viewing

At least half of all viewing (net) 59 54 56 61 69 43 40

Virtually all my TV viewing 12 11 10 10 16 8 4

About ¾ of my TV viewing 22 14 20 20 29 15 11

About ½ of my TV viewing 25 29 26 31 24 20 25

About ¼ of my TV viewing 31 32 33 29 23 43 44

I watch virtually all TV live; not recorded


10 14 11 10 8 14 15
through TiVo/DVR

TOTAL % OF TV WATCHED FILTERED 49 44 46 48 56 40 36

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


DVR Attitudes

• The freedom of time-shifting the recorded program continues to be most important to


DVR owners, followed by recording to ensure episodes are not missed
• Compared to last year, consumers value of fast-forwarding through commercials has
grown slightly — basically tied with ensuring episodes are not missed
Q. Please rate each item below to identify the best uses for your DVR or TiVo

Top 5 Best Uses for DVR: Summary of A Top/Very Best Use

1st Edition Millennials Xers Boomers Matures


2nd Edition % 3rd Edition %
% % % % %

The freedom to watch my shows on my own


64 65 68 69 66 71 60
schedule, rather than at the scheduled time

The ability to record all my favorite shows,


63 63 63 65 62 64 55
ensuring that I never miss an episode

The ability to fast-forward through commercials 55 54 59 63 56 59 55

The ability to watch one show while recording


52 55 54 53 56 51 55
another

The ability to pause live television so I don't miss


anything important if I'm interrupted during 49 52 48 55 49 39 44
viewing

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Television Multitasking

• Consumers continue to integrate multiple activities into their TV viewing


experience
• Millennials are more likely to watch TV while also socializing (IM, text
messaging, mobile phone use), listening to music, and doing school work
Q. Which are things you typically do while watching TV?

Things typically do while watching TV

1st Edition 2nd Edition 3rd Edition % Millennials Xers Boomers Matures
% % % % % %

Go online — surf websites, general Internet use 52 47 48 54 53 44 36

Email — read, write, send or receive 46 41 41 39 44 40 38

Talk with others on the mobile phone 33 31 34 48 34 27 19

Talk with others on a land line phone 37 29 29 29 24 32 33

IM or text messaging with friends 21 23 27 52 26 12 6

Do homework / work for your job 25 25 26 54 20 11 6

Read a print magazine -- -- 26 24 25 25 29

Read books 28 21 22 23 19 19 28

Read a print newspaper -- -- 21 13 16 27 33

Listen to music 19 18 17 30 16 10 7

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Television Multitasking (cont.)

• Consistent since late 2007, just one-third do nothing else while watching
TV
Q. Which are things you typically do while watching TV?

Things typically do while watching TV

1st Edition 2nd Edition 3rd Edition % Millennials Xers Boomers Matures
% % % % % %

Play video games (any platform) 25* 23* 16 20 15 15 14

Watch YouTube or other video streaming sites 6 9 11 17 12 7 2

Participate by phone or the Internet with


6 7 6 8 8 4 3
something that is currently on my television

Nothing else - just watching TV 10 33 34 29 37 38 32

* Play video games (any platform)” for 1st and 2nd edition is a net of “Play video games on a PC or handheld system” and “Play console or online games”, which by nature of that structure may have
over-stated the incidence if videogames relative to the 3rd edition’s version of asking only one time for “any platform”

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Cell Phones:
The Vindication of the Two-Inch Screen
• Cell phones have become a credible entertainment platform, with
consumers (especially Millennials) continuing to frequently use its variety
of applications…a far cry from the traditional telephone.
‒ A third of US consumers are using their cell phone to entertain themselves, over half of
Millennials
‒ Almost 50% of consumers, 40% of Boomers, and a surprising 35% of Matures are
interested in ease of access to product information via product bar code scanning on
their cell phone/hand-held
‒ Although a very small percentage, almost 5% of every generation considers cell phone
advertising as being the MOST influential form of online advertising
‒ Consistently since 2007, roughly a third of consumers talk on their cell phone while
watching TV — a captive audience for advertising?

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Poll question #3

• In the U.S., which three media/entertainment equipment are most


valued by consumers overall?
a. Desktop PC/DVR/Videogame console
b. Desktop PC/Flat Panel TV/Mobile phone
c. Desktop PC/Flat Panel TV/Laptop

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Top 12 Products (Ownership Base)

• Owners rank flat panel TV’s and Blackberry/PDS’s more favorably than last year (while greater proliferation of Blackberry/iPhone/smart phone also serve to mute
enthusiasm for a more common mobile phone)
• Perhaps a reflection of product maturity, digital cameras and DVD players are relatively less favored, compared to measurement in the previous wave

Q. Of products you indicated you own, which 3 do you value the most?

Overall preferred media/entertainment equipment (% ranked in “top 3” among owners)

2nd Edition 3rd Edition

Total Rank Total Total Rank Total Millennials Xers Boomers Matures
% % % % % %

Desktop computer (PC or Mac) 1 70 1 69 56 63 79 82

Flat Panel TV (LCD or Plasma) 7 45 2 57 38 68 65 71

Laptop computer (PC or Mac) 3 54 3 56 53 62 57 54

Mobile phone 2 59 4 51 57 52 49 45

Digital Video Recorder (DVR, TiVo) 10 33 5 29 21 35 34 35

Videogame console system (Xbox, Xbox 360,


8 25 6 27 38 23 12 3
PS2, PS3, GameCube, Wii, etc.)

Non-Flat Panel TV (CRT or Tube TV) T5 32 7 26 15 23 35 40

Digital camera or camcorder (separate from your


4 24 8 24 18 28 22 31
mobile phone)

Portable MP3 player (Zoon, iPod, Samsung or


11 21 9 22 33 15 9 17
similar)

Blackberry or PDA (personal digital assistant) T17 16 10 20 13 29 19 38

Home theater T13 21 11 17 10 18 24 22

DVD player (in the home) T5 19 12 17 13 18 20 21

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


The Cell Phone as an Entertainment Platform

• A third of US consumers are using their cell phone to entertain themselves, over half of
Millennials
• Almost 40% of males and 30% of females are using their phones for entertainment

Q. Please indicate how much you agree or disagree with the following statements

Summary of Agree Strongly/Somewhat

1st Edition % 2nd Edition % 3rd Edition % Millennials Xers Boomers Matures
% % % %

I use my mobile phone as an


entertainment device. 24 36 32 53 44 11 5

3rd Edition Total Males Females


% % %

I use my mobile phone as an entertainment device 32 36 29

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Number 1 Service (Subscription Base)

• A similar top-tier of preferred services emerge when asking consumers to


rate their most preferred subscription
Q. Of the services you indicated you subscribe to, which 3 do you value the most?

% ranked “#1” among subscribers

3rd Edition

Total Total Millennials Xers Boomers Matures


Rank % % % % %

Broadband Cable Internet Access 1 34 30 35 34 45

Broadband DSL Internet Access 2 31 31 26 36 30

Satellite TV (basic, premium, digital HD) 3 26 17 30 28 36

Mobile phone service 4 23 35 21 17 10

Cable TV (basic, premium, digital HD) 5 20 16 20 23 22

Land-line telephone service 6 9 2 8 9 18

Newspaper subscriptions 7 7 4 4 6 14

Satellite Radio 8 7 3 10 8 7

DVD by mail services (Netflix, Blockbuster) 9 5 * * * *

Pay TV/Pay per View/Video on Demand programs 10 2 * * * *

*Base Size too small to show

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Poll question #4

• Which cell phone feature is most popular with Americans overall?


a. Camera
b. Texting
c. GPS
d. Gaming
e. Email

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Mobile Phone Applications Use

• Overall rank order of more commonly used mobile phone applications has held steady since 2007
• Millennials are the most actively involved with the peripheral features of their mobile phones;
Matures least involved
Q. Thinking about the features included on your cell phone, please check the answer that best describes your usage of each cell phone feature.

Cell phone applications: Summary of use frequently/occasionally

2nd Edition 3rd Edition Millennials Xers Boomers Matures


% % % % % %

Digital camera (still pictures) 63 68 81 77 59 46

Text messaging 61 65 86 75 55 24

Video camera 41 42 56 45 33 23

Games 44 40 60 49 27 13

Internet access 35 36 44 46 26 18

Email 32 34 40 42 27 19

Music Download 29 28 46 29 16 8

MP3 player 27 27 44 30 14 9

Watch user-generated videos (like YouTube) 18 21 30 24 12 8

Update Social Networking Page - 20 33 18 6 7

Watch professionally created content (TV, movies,


19 19 27 21 12 9
news)

Download additional games from online 24 18 33 22 9 3

GPS (global positioning service) 12 9 6 21 7 7

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


The Cell Phone as a Shopping Device

• Almost 50% of consumers, 40% of Boomers, and a surprising 35% of Matures are
interested in ease of access to product information via product bar code scanning on their
cell phone/hand-held
• Although a very small percentage, almost 5% of every generation considers cell phone
advertising as being the MOST influential form of online advertising
Q. Listed below are several new areas of technology/media that may or may not be developed in the future. For each one, please rate how desirable it
is to you.

Summary of Extremely/Very Desirable

2nd 3rd Millennials Xers Boomers Matures


1st Edition %
Edition % Edition % % % % %

The ability to access product information for a


product I’m interested in buying by simply
-- -- 46 54 50 40 35
scanning a bar code with my mobile-
phone/hand-held device

Q. Thinking now about advertisements you encounter online, which type of online advertising influences you the most?

Online Advertising Influences

2nd Edition % 3rd Edition Millennials Xers Boomers Matures


% % % % %

Advertising I receive on my mobile phone -- 5 6 5 4 4

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Video Viewing Platforms

• Home TV is still the most used platform for viewing video content, on a
daily or almost daily basis…
‒ About of a third of consumers are viewing video on their computers
‒ Millennials and Xers tend to view video from a wider variety of platforms then older
consumers
• Rank order of video viewing platforms is steady from 2007

Q. How frequently do you use the following devices to watch video content?

Video Content Viewing Platforms Used (Summary of Daily/Almost Daily)

Millennials Xers Boomers Matures


2nd Edition % 3rd Edition %
% % % %

Home TV 64 65 68 71 60 62

Personal Computer (laptop or desktop) 37 34 38 38 30 24

Mobile/Cell phone 20 18 26 24 13 8

Other portable or handheld device (i.e., Video iPod,


10 7 13 6 3 3
PSP)

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


User-Generated Content:
From Novelty to Habit
• Since 2007, consumers have been spending more than a third of their
time online at sites consisting of mostly user-generated content.
• 70% of consumers are watching user-generated videos — and 80%
regularly watch the full video!
• It’s no longer a fad — and a small percentage are even getting
something in return for their creations.
‒ Millennials’ top reason for viewing is that it’s more entertaining than traditional media,
while Xers watch most often as a result of friends/family recommendations
‒ Word of mouth from friends and family about user-generated content has grown, and
the content viewed is less likely to feature people they know personally
‒ Millennials are the primary participants in all user-generated content creation —
followed by Xers
‒ Almost 10% of Xers have received value for online content they have created (i.e.,
contribution to blogs, photos, music, or software).

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Poll question #5

• What percentage of U.S. consumers overall have purchased a product


based on an online recommendation?
a. 11%
b. 27%
c. 51%
d. 77%
e. 94%

Copyright © 2009 Deloitte Development LLC. All rights reserved.


User-Generated Content: What is Being
Watched?
• Consistent since 2007, consumers spend more than a 1/3 of their time online at
sites featuring user-generated content — Millennials spend almost 60%
• Amateur videos created by strangers have increased in their share of time
watched

Q. Overall, thinking about all the of the time you spend on the Internet, what percent of your time is spent at sites that are made up mostly of “user
generated content” and what percent of your time is spent at sites that were created by a company?
Of all the user generated video content that you watch, which do you spend the most time watching?

Percent of time spent with 1st 2nd Edition % 3rd Edition % Millennials Xers Boomers Matures
content type: Edition % % % % %

Percent of time spent with content type:

User Generated 35 39 39 58 42 27 20

Professionally Generated 65 61 61 42 58 73 80

Type of user-generated video spent most time with:

Amateur videos created by strangers -- 31 47 49 53 44 29

Amateur videos created by friends, family members


-- 21 23 24 18 22 30
or myself

Compilation or parody videos (i.e., videos that have


been produced and edited by someone using
additional editing software) -- 20 18 15 18 22 20

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


User-Generated Content: What‟s the Allure?

• Word of mouth from friends and family about user-generated content has grown,
and the content viewed is less likely to feature people they know personally
‒ Millennials’ top reason for viewing is that it’s more entertaining than traditional media, while Xers
watch most often as a result of friends/family recommendations
‒ Boomers like the novelty’ aspect of it while Matures’ top reason is because it features people they
know
Q. What is the primary reason why you view user-generated content?

Primary Reason View User-Generated Content

2nd Edition % 3rd Edition % Millennials Xers Boomers Matures


% % % %

My friends/family are watching it/recommending it 19 25 23 30 22 22

I find it more entertaining than traditional media


18 22 27 21 16 15
choices (broadcast/cable TV, movies)

It features people I know (friends or family members) 27 20 24 15 15 26

It's unusual and not like professional company


15 18 15 16 24 20
generated content

It is easy to find -- 7 4 8 10 5

Other 21 9 7 8 13 12

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


User-Generated Content: What‟s Getting
Created?
• The top activity overall is maintaining a profile on a social networking site, followed by uploading
photos and contributing comments on a variety of different types of websites
• Millennials are the primary participants in all user-generated content — followed by Xers

Q. Please indicate your experience with each of the following

Content-Generating Activities (Summary of Currently Do)

1st Edition 2nd Edition 3rd Edition Millennials Xers Boomers Matures
% % % % % % %

Maintaining a profile on a social networking site -- 45 48 76 57 31 14

Uploading your own photos to a photo sharing site 8 33 30 44 35 19 15

Adding comments or postings to a newsgroup, message


board, online forum, Usenet group, or any other type of -- -- 29 40 30 23 19
online discussion

Contributing to a blog (not my own) by adding comments or


-- -- 27 42 25 19 14
postings

Adding comments or postings to news or special interest


-- -- 25 33 25 20 20
stories I read on the Internet

Maintaining my own blog (web log) for others to read about


15 17 17 34 17 8 3
myself and my opinions

Maintaining my own website 13 15 15 21 16 13 9

Uploading my own videos on YouTube.com 5 10 12 24 9 7 3

Uploading my own videos to an Internet site other than


4 11 10 20 8 6 3
YouTube.com

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Being Paid For Online Contributions

• Almost 10% of Xers have received value for online content they have
created (i.e., contribution to blogs, photos, music, or software).
• Most commonly, contributors received money in return

Q. Have you ever sold or received value for something you created online (outside of surveys), for instance: your contribution to blogs, or photos,
videos, music, or software that you created, etc.?

Receiving Value for Something Created Online

Millennials Xers Boomers Matures


3rd Edition %
% % % %

% Have Received Value for Online Creation 6 7 9 3 2

Money 48 55 50 * *

A free product or service 28 24 32 * *

Discount, voucher, or credit 15 12 11 * *

Other 9 9 7 * *

*Base size too small to show

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Internet site traffic drivers

Q. How often would you say you visit websites as a result of the following?
Internet site visit influencers: Summary of frequently/occasionally
1st Edition 2nd Edition 3rd Edition Millennials Xers Boomers Matures
% % % % % % %
Someone's recommendation 81 89 83 89 84 79 82
Results from using Internet search engines 83 88 82 81 84 81 79
Seeing an advertisement on TV 63 81 73 72 77 74 66
Seeing an advertisement in magazines -- 72 66 62 70 64 65
Sales and product offers I receive in emails -- 68 61 56 64 64 59
Advertising I see at other websites -- 72 60 63 68 58 50
Seeing an advertisement in newspapers -- 66 58 50 58 61 64
Noticing a product or service placed within
-- 68 58 63 62 56 46
television shows and movies that I watch
Hearing an advertisement on the radio 49 61 56 58 64 56 43
Seeing an advertisement at a movie theater -- 44 38 54 44 31 16
Seeing an advertisement in a video game -- 33 27 46 32 16 6
Seeing advertising or products placed within
-- -- 21 32 23 15 8
online virtual worlds

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


User Generated Content as Entertainment

• The overall growth in self-made electronic entertainment is stabilizing following a sharp increase in 2007 (likely that
while user-generated entertainment has become fairly common, a leveling off is occurring to the point that the
practice is no longer “increasing,” and that more of it is created by a shrinking proportion population of
broadcasters)
• Millennials continue to lead this overall trend of self-made entertainment and broadcasting of their content

Q. Please indicate how much you agree or disagree with the following statements

Summary of Agree Strongly/Somewhat

1st Edition 2nd Edition 3rd Edition Millennials Xers Boomers Matures
% % % % % % %

I am increasingly making my own entertainment


40 54 43 62 47 28 29
through editing my own photos, videos and/or music.

With all the technology available to me today, I


actually consider myself to be a "broadcaster" of my -- 32 28 41 30 20 14
own media.

Millennials Millennials Millennials Xers Xers Xers Boomers Boomers Boomers


1st Edition 2nd Edition 3rd Edition 1st 2nd 3rd 1st 2nd 3rd
% % % Edition Edition Edition Edition Edition Edition
% % % % % %

I am increasingly making my own


entertainment through editing my own 56 69 62 46 62 47 31 45 28
photos, videos and/or music.

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Online Purchase Behavior

• Millennials and Xers are the most likely to use the Internet for
researching items they wish to purchase, and are also the most likely to
offer product information through a message board or online review

Q. Have you ever learned of a new product for the first time online?
Q. Have you ever purchased a product based on an online recommendation?
Q. Have you ever recommended a product to someone online through a blog entry, a message board posting, or an online product review?

Online Purchase Behavior

% saying Yes to Each: Millennials Xers Boomers Matures


3rd Edition %
% % % %

% Learned of a new product for first time online 63 69 72 56 48

% Purchased a product based on an online recommendation 51 58 59 43 40

% Who have recommended a product through a blog entry, message


31 40 40 23 16
board posting, or online review

Trailing Millennials Leading Millennials Xers Boomers Matures


13-18 Yrs Old • 1994-1989 19-24 Yrs Old • 1988-1983 25-41 Yrs Old • 1982-1966 42-60 Yrs Old • 1965-1947 61-75 Yrs Old • 1946-1932

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Chapter Index of Survey Findings

Advertising 3.0 Media Services: Subscriptions & Preferences


Appointment TV Redux Media Time Use
Baby Boomers Media Platforms: Usage & Preferences
Books: Cover to Cover Millennials
Cell Phones Millennials (Leading vs. Trailing)
Content is King; the Network is Queen Movies and DVDs
Disc vs. Download Music Insights
Digital Photography/Cameras Newspaper Insights
Future of the Media Democracy Radio Insights
Gaming Search
Gender Attitudinal Differences Shopping Insights
Generation X Social Networking & Community Insights
Internet Insights Technology Insights
Magazine Insights Telecom Insights
Matures Television & DVR Insights
Media Products: Ownership & Preferences User-Generated Content
Viral/Social Activities

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Questions & Answers

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Join us February 18 at 1 PM EST as
our TMT series presents:

Finance Benchmarking: GPS


for Finance Performance
Improvement?

Copyright © 2009 Deloitte Development LLC. All rights reserved.


Thank you for joining
today’s webcast.

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click the link below.

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Contact info

Ed Moran, Deloitte Services LP


emoran@deloitte.com

Jim McDonnell, Deloitte Consulting LP


jmcdonnell@deloitte.com

Copyright © 2009 Deloitte Development LLC. All rights reserved.


This presentation contains general information only and is based on the experiences and
research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering
business, financial, investment, or other professional advice or services. This presentation is
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any action that may affect your business, you should consult a qualified professional advisor.
Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by
any person who relies on this presentation.

Copyright © 2009 Deloitte Development LLC. All rights reserved.


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Copyright © 2009 Deloitte Development LLC. All rights reserved.


Copyright © 2009 Deloitte Development LLC. All rights reserved.