State of OTT

State of OTT
An in-depth look at today’s over-the-top

content consumption and device usage
Mike Rich Andrew Lipsman

VP of Emergent Products SVP of Marketing & Insights
For info about the proprietary technology used in comScore products, refer to http://comscore.com/Patents © comScore, Inc. Proprietary. 1
Agenda
OTT Market Overview
The Connected Living Room
Household Viewing Segments
OTT Content Providers
Key Takeaways
Q&A
© comScore, Inc. Proprietary. 2

comScore Total Home Panel
Behaviorally measuring all internet

connected devices in a household

About this Analysis
OTT (over-the-top) is defined as using apps to stream video content via the internet to a television set. This presentation leverages two data sources
unique to comScore:
comScore OTT Intelligence™ measures over-the-top streaming content consumption across TV-connected devices.
comScore Connected Home™ delivers insight into the usage of all internet- or router-connected devices in the home – including IoT.
The foundation of these two data sources is the comScore Total Home Panel™, a true single-source research platform designed to measure the
realities of cross-platform media consumption today.
Total Home Panel methodology and information:

• Single-Source Behavioral
• Measures 12,500 Homes and 150,000+ Devices
• Geographically Distributed in the U.S.
• Weighted to U.S. homes with Wi-Fi (93M homes)
• Measures consumption across 52 OTT services which account for the overwhelming majority of OTT usage
Key Contributors to Webinar:

• Brandon Burr – Director of Emergent Products
• Susan Engleson – Sr. Sales Director of Emergent Products
• Farani Haynes – Manager, Digital Media Insights
• Adam Lella – Sr. Analyst, Marketing Insights
• Autum Molay – Product Marketing Manager of TV/Cross-Platform Products

OTT Market Overview

OTT viewing has become a mainstream media behavior in the U.S.
51 MM 54%
Homes used OTT in April Reach
Amongst homes with Wi-Fi
The average home viewed …this was spread across
49 Hours 15 average
of OTT content across the month…
viewing days
Source: comScore OTT Intelligence, U.S., April 2017 © comScore, Inc. Proprietary. 6
The OTT market is steadily growing, with millions of more OTT viewing households
coming online over the past several months
Total OTT Household Penetration Trend
55
51 51
Total Households (MM)
50 49 49 48
46
45 44
40
35
30
Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017
Source: comScore OTT Intelligence, U.S., October 2016 – April 2017 © comScore, Inc. Proprietary. 7
OTT has the same ‘primetime’ as Live TV with viewing peaking in the evening hours
between 8-11pm
Household Share of TV Viewing Type by Daypart

Live TV Over-the-Top (OTT)
9%
8%
Household Share of Daily TV Viewing
7%
6%
5%
4%
3%
2%
1%
0%
Source: comScore TV Essentials & Total Home Custom Reporting, U.S., December 2016 © comScore, Inc. Proprietary. 8
OTT viewing spikes on weekends as viewers spend more time binge-watching their
favorite content
5.0 Over-the-Top Viewing Hours by Day
4.5
4.0
3.5
Daily Hours per Household
3.0
OTT Viewing
2.5
An additional
2.0 25 minutes
of average daily viewing
per household
1.5 on weekends
1.0
0.5
Weekend Weekend Weekend Weekend Weekend
0.0
Source: comScore OTT Intelligence (custom), U.S., April 2017 © comScore, Inc. Proprietary. 9
OTT streaming is not a smaller household phenomenon – it’s actually more prevalent
in larger households
Household Size Index of OTT Streaming HHs vs. Wi-Fi HHs

150
140
130
120 128
123
110
111
Index
100
90
80 85
81
70
60
50
HH Size: 1 HH Size: 2 HH Size: 3 HH Size: 4 HH Size: 5+
When isolated to homes without a pay-TV subscription, OTT viewing skews towards
smaller households
Household Size Index of Cordless OTT HHs vs. Total OTT Streaming HHs
150
140
130 139
120
110
Index
100
90
99 96
80 85 82
70
60
50
The Connected Living Room

The modern living room experience features an expanding universe of connected
devices, from Digital to OTT to the Internet of Things
Connected Home Device Penetration Among U.S. Wi-Fi Households
Media Devices
90% 89%
64%
40%
30% 28% 25%
7% 7%
3%
7%
Computer Smartphone Tablet Streaming Smart TV Game DVR / Set Top Internet Blu- Smart Wearables Home Energy
Box/Stick Console Box* Ray Player Speaker
DIGITAL OTT IoT

Source: comScore Connected Home, U.S., April 2017 © comScore, Inc. Proprietary. 13
* DVR / Set Top Boxes only include those that are internet-enabled
Streaming sticks/boxes and smart TVs are the two most popular OTT streaming
devices
Streaming Sticks/Boxes Smart TVs
38 MM 28 MM
U.S. HHs U.S. HHs
with this device with this device
73% 63%
of these HHs used
of these HHs used
their streaming stick/box their smart TV
to stream OTT to stream OTT
Source: comScore Connected Home and OTT Intelligence, U.S., April 2017 © comScore, Inc. Proprietary. 14
Streaming box and stick devices are propelling the OTT category forward, with Roku
leading Amazon, Google and Apple in device penetration
TV Streaming Boxes/Sticks: Penetration of U.S. Wi-Fi Households
16%
14%
8%
6%
Source: comScore Connected Home, U.S., April 2017 © comScore, Inc. Proprietary. 15
The smart TV market is led by Samsung and Vizio, each accounting for approximately
1/3rd of the market share
Share (%) of Smart TVs by OEM in U.S. Wi-Fi Households
3% 8%
4%
33%
5%
7%
10%
30%
Source: comScore Connected Home, U.S. April 2017 © comScore, Inc. Proprietary. 16
Household Viewing Segments

More than 1/3rd of the OTT audience is cordless and doesn’t subscribe to pay-TV, with
half of those being streaming-only households
Over-the-Top (OTT) Households by TV Service Type
Streaming-Only
Cordless 18%
34%
Cable
44%
Streaming +
Cordless Antenna
16%
Satellite
22%
Source: comScore OTT Intelligence, U.S., April 2017 18

© comScore, Inc. Proprietary.
* Households that use an antenna in addition to their cable or satellite services are included in those respective shares.
Streaming-only households are more likely to use streaming boxes/sticks and less
likely to use Smart TVs
Device Penetration among OTT Streaming Households
66% Total Streaming HHs Streaming-Only HHs
54%
34% 35%
33%
28%
7% 6%
4%
1%
Streaming Box/Stick Game Console Smart TV Internet Blu-ray Player DVR / Set Top Box
Streaming-only households are more intense viewers of all four major OTT content
services
Viewing Hours per Month
Total Streaming HHs Streaming-Only HHs

36.8
35.6
28.9
26.9
18.8
16.9
13.5
10.7
Netflix YouTube Amazon Video Hulu
Cordless viewers can be pay-TV ‘cord-cutters’ or ‘cord-nevers’ and have different
viewing behaviors
Cordless
Cord-Cutter Cord-Never
Streaming + Streaming +
Streaming-Only Streaming-Only
Cordless Antenna Cordless Antenna

Single-person households are the most likely to be both cord-cutters and cord-nevers
Household Size Index of Cordless HHs vs. Total OTT Streaming HHs
150
148 Cord-Never HHs Cord-Cutter HHs
140
130
120 124
110
111
Index
100
90 94 96
90 88 86 87
80 85
70
60
50
Income is a key determinant of cordless behavior, and especially significant among
cord-never households
Household Income Index of Cordless HHs vs. Total OTT Streaming HHs
200
180 Cord-Never HHs Cord-Cutter HHs
160 171
140
120
119
Index
115 111
100 106
96
80 87
80 84
60
63
40
20
-
Under $40K $40K - $59,999 $60K - $74,999 $75K - $99,999 $100K+
Cordless households naturally stream more content than the average OTT household,
but cord-cutters stream significantly more than cord-nevers
OTT Viewing Hours per Month by Viewing Segment
81
61
49
Total OTT HHs Cord-Never HHs Cord-Cutter HHs
Cord-cutters are more intense viewers across most major streaming services
OTT Viewing Hours per Month
Total OTT HHs Cord-Never HHs Cord-Cutter HHs

38
35 36
32
29
27
23
17 18
14
11 12
OTT Content Providers

The four major OTT streaming services account for nearly 80% of viewing time for
OTT households
Share (%) of Total OTT Viewing Hours
Other
21%
40%
7%
14%
18%
Netflix leads the major over-the-top streaming services in household penetration, but
trails Hulu for the most streaming hours per household
Selected Over-the-Top (OTT) Streaming Services by Wi-Fi Household Penetration & Engagement
35.0
30.0
25.0
Avg. Monthly Viewing Hrs. per HH
20.0
15.0
10.0
5.0
0.0
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Wi-Fi Household Penetration
All four major OTT streaming services average 2+ hours of usage per viewing day,
while Netflix viewers use the service on the most regular basis
Key Engagement Metrics for Selected Over-the-Top (OTT) Streaming Services
Monthly Viewing Days per Household Hours per HH per Viewing Day
12.3
2.9
9.9
8.1 2.2 2.1 2.0
5.5
Netflix Hulu YouTube Amazon Video Hulu Netflix YouTube Amazon Video
3 out of every 4 OTT households watch three or fewer OTT content services per
month, with Netflix the overwhelming choice among single-app households
Number of OTT Apps Viewed per Household
74%
30% Half
of single-app HHs
26%
watch
1 out of 4
watch
18%
11%
6%
3% 2% 2% 1% 1%
1 2 3 4 5 6 7 8 9 10+
Netflix is viewed in 3 out of every 4 OTT households
Homes that view OTT content
26% of OTT
74% of OTT homes watch Netflix homes do not
watch Netflix
Some services are doing better than others at attracting a “Netflix free” audience
% of OTT Audience NOT Watching Netflix OTT
31%
26% 26% 25%
15% 15%
Total OTT
Households
While Netflix has significant overlaps with most other OTT streaming services, Amazon
and YouTube have modest household audience duplication with each other
27.4M 18.3M 9.1M 7.6M 16.7M

Total YouTube YouTube-Only Cross-Over Amazon-Only Total Amazon
OTT Households Households Households Households OTT Households
Netflix drives the majority of OTT viewing on Blu-rays and smart TVs, while viewers on
streaming sticks/boxes are more likely to spread their attention across multiple apps
Netflix Share (%) of OTT Viewing Hours by Device
63%
57%
43%
40%
38%
26% 26%
Total OTT Internet Blu-ray Smart TV Amazon Fire Apple TV Roku Google
Player Devices Chromecast
There are clear brand affinities between OTT content providers and streaming devices
in OTT households
Streaming Service OTT Household Reach Index by Streaming Box/Stick

250
200 213
OTT Household Reach Index
178
150
154
128 123 129
121
100 110 109 111
101 95
93 92
78
50
55
Source: comScore OTT Intelligence, U.S., April 2017

* Data represents streaming in households with each respective device, not streaming directly from that device. © comScore, Inc. Proprietary. 35
Skinny Bundles are beginning to gain traction in U.S. households
Skinny Bundle HHs Watch
3.1 MM 5.3 Hours

U.S. Skinny Bundle HHs of Skinny Bundle Content
per Viewing Day
91%
of Skinny Bundle
Homes Use a
Streaming Stick/Box is the Most Popular Skinny Bundle in More
Than 2 Million Homes

* Skinny Bundle HHs defined as viewing Sling, Playstation Vue or DirecTV Now . © comScore, Inc. Proprietary. 36
Skinny Bundles account for more than half of OTT viewing time in Skinny Bundle
households
Skinny Bundle Households: Share (%) of Total OTT Viewing Time

Other
3.2% 9.0%
7.1% Skinny Bundles

9.0%
54.6%
17.0%
Skinny Bundles Netflix Hulu YouTube Amazon Video Other

As replacements for traditional pay-TV, Sling, Playstation Vue and DirecTV Now boast
extremely high engagement on a per household basis
Monthly OTT Hours Viewed per Household
81
69
57
27 29
17
11
Amazon Video YouTube Netflix Hulu Playstation Vue Sling DirecTV Now
Skinny Bundle households are more likely to watch content on the major OTT content
services, especially Amazon Video and Hulu
OTT Service Penetration Among U.S. Wi-Fi Households
Skinny Bundle HHs Total OTT HHs

75% 74%
57%
54%
43%
40%
33%
23%

More than 10 million households watch over-the-top network TV apps, but those apps
account for a modest share of viewing time
TV Network App Households:
10.1 MM HHs Share (%) of Total OTT Viewing Time
That View Network TV Apps via OTT 14%

19%
Network TV Apps
Netflix
Hulu
7%
YouTube
29% Amazon Video
14% All Other
16%

* Network TV App definition excludes premium networks such as HBO and Showtime and Skinny Bundles
such as Sling © comScore, Inc. Proprietary. 40
Cordless and streaming-only households are more reliant on premium channel
content than the average OTT home
Household Reach of Premium Channel Apps by Segment

12.0%
10.8%
8.0%
All OTT HHs Cordless HHs Streaming-Only HHs
Key Takeaways

KEY TAKEAWAYS
OTT has become a OTT consumption The next wave of

1 mainstream behavior, 2 patterns depend 3 content options will
led by well-known significantly on shape the landscape
content services household profile for years to come
• 51 million homes • 1/3rd of OTT households are • Skinny bundle services such as
• More than half of U.S. homes cordless and 52% of those are Sling have incredibly high
with a Wi-Fi connection streaming-only engagement per household
• Households stream an hour and • Cord-cutter HHs are the most • If these services expand their
40 minutes per day intense viewers of OTT content reach, they can become major
at 81 hours per month platforms for audience attention
• Netflix is the leader in
penetration and total • Cord-never HHs view an above • Network TV apps are beginning
engagement average 61 hours per month to penetrate OTT households
• YouTube, Amazon and Hulu all • OTT viewing skews to 3+ • How they transition to the
comprise a strong second tier person HHs overall, but to 1 medium might determine the
person HHs when cordless future of TV

comScore Total Home Panel™:
Capture device usage and content consumption across the connected home.
OTT Intelligence™ Connected Home™ Custom Reports

& Raw Data Feed
Measures over-the-top streaming Delivers insight into the usage of all Provides unparalleled access to
content consumption across TV- internet- or router-connected the complete Total Home Panel
connected devices. devices in the home – including IoT. dataset for custom analyses.
To learn more, visit: comScore.com/TotalHome

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State of OTT

An in-depth look at today’s over-the-top

Mike Rich Andrew Lipsman

© comScore, Inc. Proprietary. 2

Behaviorally measuring all internet

© comScore, Inc. Proprietary. 3

Total Home Panel methodology and information:

Key Contributors to Webinar:

© comScore, Inc. Proprietary. 4

© comScore, Inc. Proprietary. 5

The average home viewed …this was spread across

Total OTT Household Penetration Trend

Household Share of TV Viewing Type by Daypart

5.0 Over-the-Top Viewing Hours by Day

Household Size Index of OTT Streaming HHs vs. Wi-Fi HHs

© comScore, Inc. Proprietary. 12

Connected Home Device Penetration Among U.S. Wi-Fi Households

DIGITAL OTT IoT

Streaming Sticks/Boxes Smart TVs

TV Streaming Boxes/Sticks: Penetration of U.S. Wi-Fi Households

© comScore, Inc. Proprietary. 17

Over-the-Top (OTT) Households by TV Service Type

Source: comScore OTT Intelligence, U.S., April 2017 18

Device Penetration among OTT Streaming Households

66% Total Streaming HHs Streaming-Only HHs

Viewing Hours per Month

Total Streaming HHs Streaming-Only HHs

Netflix YouTube Amazon Video Hulu

© comScore, Inc. Proprietary. 21

180 Cord-Never HHs Cord-Cutter HHs

OTT Viewing Hours per Month by Viewing Segment

Total OTT HHs Cord-Never HHs Cord-Cutter HHs

OTT Viewing Hours per Month

Total OTT HHs Cord-Never HHs Cord-Cutter HHs

Netflix YouTube Amazon Video Hulu

© comScore, Inc. Proprietary. 26

Share (%) of Total OTT Viewing Hours

Key Engagement Metrics for Selected Over-the-Top (OTT) Streaming Services

Homes that view OTT content

% of OTT Audience NOT Watching Netflix OTT

27.4M 18.3M 9.1M 7.6M 16.7M

Streaming Service OTT Household Reach Index by Streaming Box/Stick

Source: comScore OTT Intelligence, U.S., April 2017

Skinny Bundle HHs Watch

3.1 MM 5.3 Hours

Source: comScore OTT Intelligence, U.S., April 2017

Skinny Bundle Households: Share (%) of Total OTT Viewing Time

7.1% Skinny Bundles

Skinny Bundles Netflix Hulu YouTube Amazon Video Other

Monthly OTT Hours Viewed per Household

OTT Service Penetration Among U.S. Wi-Fi Households

Skinny Bundle HHs Total OTT HHs

Netflix YouTube Amazon Video Hulu

Source: comScore OTT Intelligence, U.S., April 2017

TV Network App Households:

10.1 MM HHs Share (%) of Total OTT Viewing Time

That View Network TV Apps via OTT 14%

Source: comScore OTT Intelligence, U.S., April 2017

Household Reach of Premium Channel Apps by Segment

All OTT HHs Cordless HHs Streaming-Only HHs

© comScore, Inc. Proprietary. 42

OTT has become a OTT consumption The next wave of

© comScore, Inc. Proprietary. 43

OTT Intelligence™ Connected Home™ Custom Reports