1

BRAND WARS LEVERAGING CONSUMER COMMENTARY TO UNCOVER WHO WILL WIN + WHY

BRAND WARS. 2015 has been a crazy year for television, streaming services, and everything in

between. You’ve heard about the cord cutters, the Netflix bingers, and the 4.4

million Americans that dished out a collective $440 million to watch the Pacquiao vs.

Mayweather fight.1 It’s a turbulent and evolving space, so we pitted three industry

leaders—Amazon Prime, Hulu and Netflix—against each other and collected

consumer intel to understand perceptions, uses and visions of each brand.

Are streaming services slated to change the face of entertainment in 2015? If so,

who will lead and who will follow? We reached out to 2,500 consumers to ask their

opinions, and monitored Twitter to listen to their commentary.

Read on to find out what they said.

2

3

Need image of streaming devices/logos

for all 3 companies

3

NETFLIX IS THE FAN FAVORITE. Let’s cut to the chase: Netflix is king. It doesn’t matter who you are – young, old,

male, female – Netflix offers clear, tangible benefits. This is no surprise—the brand’s

60 million subscribers watch a collective 10 billion hours each quarter.2 Of those, 40

million users are in the US3 and their streaming accounts for 37% of peak US web

traffic.4

But what makes Netflix such a leader? What do consumers love about it, and where

do they see things heading? Where do Hulu and Amazon Prime fall short, and what

will it take for them to gain a seat at the table (or should we say, on the couch)?

4

5

THE RED-CARPET CLASSIC. When asked about the brand’s personality, consumers describe Netflix using strong

descriptors chocked full of emotion and personification. Netflix’s personality is one

that consumers know and love, and they’re not afraid to share that with you.

Netflix’s exciting and entertaining side takes a backseat to its laid-back, cool nature.

That said, Netflix is there for you – generous, helpful, and resourceful – but be

careful, as it’s engaging nature can be cruelly addicting. Consumers’ experiences,

whether shared or alone, with Netflix are memorable, meaningful, and aplenty.

6

A reliable and resourceful friend who understands

my unique interests. Highly experienced in

entertainment and diversity and she always keeps

a wide audience in mind.

– Female, 18-34

Broadminded, intelligent, exciting,

mysterious, and always there when you

need them most.

– Female, 55+

Fun, entertaining person that is always

there for you when you have nothing to

do, or have some down time.

– Female, 18-34

7

NETFLIX > THE CONTENT. Netflix is the master of variety, from well-loved shows and movies to newer original

series. It’s where friends go for instant access to entire seasons of TV shows (surely

these binges are what the company’s tagline, “Because great things start with

Netflix” is referring to). Consumers see it as a win-win: they can watch what they

want, when they want, without a hefty price tag.

The Netflix brand identity is straightforward and classic, just like the service. The

name hints at what the service offers, which helps recognition to a degree—though

the brand’s ubiquity and dominance are really what drives this.

Tellingly, when consumers talk about the service, they describe “watching Netflix”

rather than “watching show/movie” on Netflix. This is unique to Netflix—that

consumers often decide to embark upon a Netflix binge and then choose a show—

the platform leads and the content follows.

8

9

NETFLIX: WHAT’S NEXT?

THE FUTURE OF ENTERTAINMENT. Consumers see Netflix as a force to be reckoned with, and express their sentiment

through strong language, explaining that the streaming service has the power to

“supplant cable and satellite TV,” “unseat networks,” and hold all providers to a

higher standard of offering and price. 20% of consumers are confident that Netflix

will replace other options altogether. They see “content providers” as the way of the

future and love the “freedom” provided by this new way of consuming content.

To remain relevant, cable providers will need to step up and match Netflix’s

“anything, anywhere” game. And it’s not just networks that are on the chopping

block – consumers refer to Netflix as a service that will “replace movie theaters,”

demonstrating the entertainment industry will need to evolve in order to keep up

with streaming. That said, there’s one thing the service is currently testing that could

throw a significant hitch in Netflix’s domination: commercials.5

10

I see many TV-watchers transitioning over to

Netflix, and with the variety they are adding to the

selection that fits all ages and interests. And the

cheap cost and no commercials are very

appealing.

– Female, 18-34

Netflix could leverage its current position to

become a true powerhouse in online broadcasting

of both original and existing content. I would like

them and other services like them to unseat the

big networks when it comes to entertainment.

– Male, 35-44

Netflix will be the standard for entertainment in

the future. Consumers want all of their video on-

demand, and Netflix is the leader in on-demand

services. They also have high quality original

programming to fall back on if they need to due to

any hurdles in licensing content from other

providers.

– Male, 18-34

11

THE SUPPORTING ACTOR. If Netflix is the star of the show, Hulu is its somewhat-trusty sidekick– entertaining, a

little quirky, but not as cool. Consumers speak very operationally about the service’s

personality, and not always positively. While Hulu is fun to have around, it has some

major downsides, most notably the commercials. Subscribers are shocked and feel

a little betrayed that they have to pay for a service and still watch ads. Consumers

are very vocal about their disdain for commercials, and often reach out to

@Hulu_support on Twitter to share their sentiments.

That said, Hulu serves its purpose and is definitely seen as a big personality with

plenty of stories to share. Those who don’t know Hulu are eager to meet the

service, begging friends for their passwords (10% of those using the service are

doing so on a borrowed account).6 This is often the result of wanting access to a

particular show; consumers flock to Hulu for specific content rather than seeking out

content once they’ve arrived. 12

Hulu is that friend that always has time to hang out and

can be fun but they have too much baggage (the

commercials). So you don’t really think its worth it in the

end so you tend to chill with your Homie Netflix instead.

– Female, 18-34

I would imagine Hulu to be a funny guy that knows quite

a bit. He would be quite popular and a lot of people seem

to talk about him, even without being asked. He can

always liven up boring situations.

– Male, 18-34

Hulu is a friendly acquaintance who is somewhat

enjoyable to hang out with, but isn’t always the first

friend you’d call because they tend to be slightly

irritating.

– Female, 18-34

13

HULU – TV, BUT DIFFERENT. Overall, consumers are less familiar with the brand, some tying the name to Hawaii

or even hula hoops. Consumers who are familiar with the service focus on the TV

offerings as opposed to Netflix’s equal focus on TV and movies. They appreciate the

ability to catch a favorite show the day after it airs, or anytime for that matter, if they

miss it in real-time.

Hulu is a new way to watch TV – not revolutionary, but certainly more convenient.

Younger consumers in particular appreciate the convenience and variety. Hulu’s well

curated portfolio of programming stands out – in particular its recent reported $180

million investment in the entire Seinfeld catalog7 and its acquisition of Fox’s

recently-canceled The Mindy Project.8

14

Hulu allows you to keep up with your favorite

shows without the need for cable. It's cheap per

month, and practically every prime time show is

available for viewing. I personally use it and have

"cut the cable," saving myself $150 a month.

– Female, 35-44

I think it will be a viable alternative to TV for cord

cutters.

– Female, 18-34

I think the commercials are dragging down the

entire industry. Unpaid Hulu with commercials is

fine, but once you start paying for Hulu, there really

shouldn't be commercials.

– Male, 18-34

If Hulu can find a way to deliver a commercial free

product, it can compete with Netflix. otherwise,

Hulu will have a minor future as other ad free and

ad light products enter the market.

– Female, 18-34 15

HULU: WHAT’S NEXT?

CUT THE CRAP (COMMERCIALS). Consumers talk about Hulu alongside Netflix as a service that could replace TV. But

their language on this topic is less assertive than when speaking about Netflix

alone, and they never mention Hulu as a game-changer itself. For many, the

benefits of the service just aren’t clear – 14% of consumers were unable to even

name a benefit when directly asked.

That said, the brand has two clear opportunities to position itself as a more

competitive ringer in the space: cut commercials and add original content, similar to

what Netflix has done with Orange is the New Black or Amazon Prime’s addition of

Transparent.

16

17

THE UNDERSTATED B-LISTER. Amazon’s streaming service is non-descript for most consumers. They explain it like

you’d talk about a distant friend of a friend – they’re vaguely positive but can’t really

think of any defining characteristics or value. Even when asked directly about

Amazon Prime’s video streaming service, consumers speak to the efficiency and

speed of the failsafe 2-day shipping. Those that know of the streaming service more

intimately think of it as a slow, annoying, and somewhat useless– Netflix’s less cool

younger brother.

18

They are very generous, organized,

always carry what they may need

with them, and are extremely fast

and efficient at what they do!

– Female, 18-34

Trying to be like the cool kids but

not exactly getting there.

– Male, 18-34

Diverse, expansive, interesting, and

well-intentioned, but sometimes

there are gaps in follow-through.

– Female, 55+

It’s like a car salesman that only has

three different cars and two of them

are lemons.

– Male, 18-34

19

AMAZON PRIME = SHIPPING. Amazon Prime’s streaming service is not much more than a value-add on top of the

free shipping consumers get with their $99 subscription. In fact, when asked directly

about the benefits of the streaming service, nearly one quarter (23%) of consumers

responded by outlining the benefits of Amazon’s shipping. In their minds, the

streaming is essentially free, which is good, but beyond that they are hard pressed

to think of any benefits it offers. And if they had to actually pay for the streaming

content available through Amazon Prime the value would evaporate.

Older consumers are the group that knows the least about the streaming service.

Even those who have the service aren’t sure of how it works and how to access it.

Those who were more familiar and had tried the service briefly mention the music

and modern movies available. All in all, consumers either aren’t aware or don’t really

care about Amazon’s streaming.

20

They are very generous, organized,

always carry what they may need

with them, and are extremely fast

and efficient at what they do!

– Female, 18-34

Quick and effective and efficient.

– Female, 35-54

21

AMAZON: WHAT’S NEXT?

AMAZON IS STILL A THREAT. Amazon has a long way to go to differentiate itself in the crowded streaming space,

but there are clear avenues to pursue. Its ease of streaming on multiple devices

stands out and could win consumers over if the brand expanded its library of

network shows, improved its original content (just a handful mentioned Bosch and

Transparent), and made its pricing more competitive. Because it’s such a

powerhouse in other arenas, consumers note that if Amazon “gets it right” with

streaming it has the muscle to compete with Netflix.

22

As long as the service continues to have stellar

exclusive and boundary pushing content like

Transparent, I think Prime Video will become one of

the biggest players in the television space. While I

don't personally use the music streaming much, I

think it adds a huge amount of value to Prime

overall. As long as the services continue to work

well, Amazon will be a force to be reckoned with.

– Male, 18-34

Unless they step up their game I don't think they

will continue to compete very well. We subscribe

and it's very difficult to find worthwhile content on

their streaming service. I think their service will

need an overhaul in order to stay relevant.

– Male, 35-54

Amazon prime is in the future of entertainment as

long as it can produce original programming and

shows like Bosch and alpha dogs. The quality of

content is what will make or break Amazon. They

must catch up with Netflix though, who has more

programming than they currently do.

– Male, 18-34 23

THE LAST HURRAH

It’s Netflix’s world and we’re all just streaming in it.

• Netflix will continue to dominate on the power of variety, lack of commercials,

and high global adoption

• The brand identity is creating a new breed of entertainment and its own

vocabulary, with people “watching Netflix” and going on “Netflix binges”

• Consumers see Netflix as reshaping the industry, forcing networks to adapt to

the anything, anywhere low-cost model or risk becoming obsolete

Hulu gets the job done.

• Hulu does one thing and it does it well – delivering the latest episodes of

current TV shows

• Hulu is well positioned to ride Netflix’s coattails in redefining how people

consume content

• But commercials could be the service’s Achilles heel, with consumers growing

increasingly impatient (and increasingly vocal on social media)

Amazon has yet to put a stake in streaming.

• Amazon Prime is only a threat to cable due to its status as a streaming service

• Streaming is an add-on to the brand’s beloved 2-day shipping, but doesn’t

provide value on its own – many consumers are unaware that it even exists

• Amazon will need to ramp up existing and original content offerings should they

want to compete in this space – a feasible goal for a dominant force should

they decide to pursue it 24

25

26

BEHIND THE CURTAIN. We believe that with forethought and careful execution, you only need a few

questions to glean a ton of insight. Using ThoughtPath, our proprietary cognitive

framework, we crafted three questions about each streaming service and asked

them of 2,500 consumers. Feedback in hand, we implemented (iM)merge Analytics,

powered by iModerate’s qualitative expertise and Luminoso’s text analytics

capabilities, to cull through the data, tease apart the nuance, and gain a deeper

understanding of how consumers view and discuss each brand.

To top it all off, we monitored the Twitter mentions of each brand with Luminoso’s

Compass, allowing us to pinpoint what was discussed, and when, as well as scroll

through thousands tweets as they filtered in.

27

WHAT’S THE FUSS ABOUT?

Based on what you know about [Amazon

Prime streaming service/Hulu/Netflix] what

is the biggest benefit that it provides?

WHO ARE THESE PEOPLE, ANYWAY?

Imagine that [Amazon Prime streaming

service/Hulu/Netflix] is a person. How would

you describe them?

WHAT’S COMING NEXT?

How do you see [Amazon Prime streaming

service/Hulu/Netflix] fitting into the future of

entertainment?

THE QUESTIONS:

28

PUT TO THE TEST. In order to pick our winner, we focused on the language consumers used, including

the context in which they discussed the three services and the intensity and

conviction with which they spoke. We assessed brands on a spectrum of two key

factors: brand identity and impact on the entertainment industry. Netflix won by a

landslide in both categories – it’s well known, well understood, and positioned to

shake up entertainment at many levels. Hulu is a respectable second although

consumers aren’t as clear on the service’s offering and value, and don’t see it as a

major force to be reckoned with. Amazon’s primary challenge is recognition – many

don’t realize the e-commerce giant offers a streaming service at all.

29

HIGH IMPACT

ON INDUSTRY LOW IMPACT

ON INDUSTRY

STRONG

BRAND

IDENTITY

WEAK BRAND

IDENTITY

30

CREDIT REEL 1. http://ftw.usatoday.com/2015/05/mayweather-pacquiao-gate-how-many-pay-per-view-buys-

500-million-400-half-billion

2. http://files.shareholder.com/downloads/NFLX/47469957x0x821407/DB785B50-90FE-44DA-

9F5B-37DBF0DCD0E1/Q1_15_Earnings_Letter_final_tables.pdf

3. http://files.shareholder.com/downloads/NFLX/47469957x0x821407/DB785B50-90FE-44DA-

9F5B-37DBF0DCD0E1/Q1_15_Earnings_Letter_final_tables.pdf

4. http://qz.com/414271/netflix-now-accounts-for-nearly-37-of-peak-web-traffic-in-north-

america/

5. http://time.com/3903995/netflix-testing-commercials/

6. http://www.businessinsider.com/netflix-and-hulu-sharing-password-numbers-2015-5

7. http://techcrunch.com/2015/04/29/hulu-scores-streaming-rights-to-seinfeld-signs-amc-deal/

8. http://artsbeat.blogs.nytimes.com/2015/05/15/hulu-picks-up-the-mindy-project/?_r=0

31

THANK YOU QUESTIONS? COMMENTS? SAY HI, WE’D LOVE TO HEAR FROM YOU:

www.imoderate.com / / info@imoderate.com // 303.333.7880