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11
COURAGEOUS THINKINGCOURAGEOUS THINKING
CTAM Connected Consumer 2018:Exploring how to Best Serve Connected
Consumers, Today and in the Future
CONFIDENTIAL AND PROPRIETARY © 2018 by CTAM and Frank N. Magid Associates, Inc. Any duplication, reproduction or usage of this document or any portion thereof without the written consent of CTAM is prohibited
222
"The Jetsons was right." -Forbes, 2018
The smart home category is exciting!
CTAM Connected Consumer 2018
33
▪ Understand how the proliferation of seamless Internet connectivity is changing the way consumers engage with content, information and the world around them, and what they may want in the future
▪ Delve into how the media and entertainment industry can best serve the connected consumer today and in the future
▪ Online survey conducted in May/June 2018 with a total sample 2,401 consumers ages 18+, matched to US Census and representative of the U.S. adult population of Internet users
Objectives & Methodology
CTAM Connected Consumer 2018
44
The Connected Consumer Market is Large and Multi-faceted.
555
…YET IT’S RARE AMONG THEIR PEERS
Consumers see this tech becoming “the new normal”, but not there yet
CONSUMERS CONSIDER IT POPULAR …
52% say it’s already the new
“normal”, or makes sense for most people
58% say none or only a few of their
peers are using it
(…EXCEPT HALF OF CONNECTED EARLY ADOPTERS DO SEE “ALL” OR “MOST” IN THEIR SOCIAL CIRCLE
USING SMART HOME DEVICES)
CTAM Connected Consumer 2018
66
Non-Committals32 M
Connected Early Adopters, 9%
Connected Mainstreamers, 29%
Connection Prospects, 8%
Non-Committals, 14%
Resistors, 40%
The target market exceeds 100 M U.S. adultsSo far, response to connected technologies fits overall tech adoption patterns
CTAM Connected Consumer 2018
Connected Early Adopters 20 M
Connected Mainstreamers 65 M
Connection Prospects18 M
Resistors90 M
PROJECTED MILLIONS OF CONNECTED CONSUMERS
77
Younger adults, especially homeowners and parents, are a key focus.
88CTAM Connected Consumer 2018
9% OF THE MARKET
THE CONNECTED EARLY ADOPTERS
75K+HOUSEHOLD INCOME
69% ESP. MALEFEMALE
31%
ESP. KIDS IN HOUSEHOLD
18-34ESP. AGES
(52%, vs. 31% avg)
(61%, vs. 31% avg)
ESP. HOMEOWNER
(77%, vs. 57% avg)
TECH STATUS:▪ Smart speakers 67%▪ Game Console 82% vs 38%▪ Pay TV customers 89% vs 74%▪ Satellite 27% vs 20% telco 18% vs 12%▪ Home security 69% vs 25%▪ 3+ streaming services ▪ Live TV Weekly+ 91% vs 76%▪ OnDemand 76% vs 38%
(43% vs. 26% avg)
(Less so <40K, 22% vs. 40% avg)
PAY TV
(vs. 74% avg)89%
Much more maleYoungerParents
HomeownersHeavy Tech + Video
99CTAM Connected Consumer 2018
100K+HOUSEHOLD INCOME
50% MALEFEMALE
50%
ESP. KIDS IN HOUSEHOLD
18-34ESP. AGES
(40%, vs. 31% avg)
(40%, vs. 31% avg)
ESP. HOMEOWNER
(64%, vs. 57% avg)
TECH STATUS:
(21% vs. 14% avg)
(Less so <40K, 31% vs. 40% avg)
PAY TV
(vs. 74% avg)79%
29% OF THE MARKET
THE CONNECTED MAINSTREAMERS
YoungerParents
HomeownersMid + Upper $
Streaming Oriented▪ Have smart home tech
▪ Smart speakers 47%, thermostat 32%, cameras 29%, garage door 27%
▪ Video game console 47% (vs. 38% avg)
▪ Smart TV 52% (vs. 40% avg)▪ Home security 42% (vs. 25% avg)
1010CTAM Connected Consumer 2018
20-50KHOUSEHOLD INCOME
48% MALEFEMALE
52%
ESP. KIDS IN HOUSEHOLD
35-54ESP. AGES
(46%, vs. 36% avg)
(35%, vs. 31% avg)
ESP. HOMEOWNER
(52%, vs. 57x% avg)
TECH STATUS:
(40% vs. 31% avg)
PAY TV
(vs. 74% avg)73%
8% OF THE MARKET
THE CONNECTION PROSPECTS
More Gen XMiddle Income
TabletsStreaming Oriented
▪ No smart home tech, but intend to buy it within 6 months (esp. speakers)
▪ Tablet users 65% (vs. 49% avg)▪ Video game console 49% (vs. 38% avg)▪ Less home phone 44% (vs. 54% avg)▪ Less home security 14% (vs. 25% avg)
111111CTAM Connected Consumer 2018
27% intend to buy (more) connected tech. SOON.
INTEND TO PURCHASE IN THE NEXT 6 MONTHS:
16% Any Smart Speaker
17% Any Connected Smart Home Security device
23% Any Connected Smart Home Solution/Device
44% of Caregivers intend
to purchase connected home devices in the next 6 months (vs. 25% of non-Caregivers)
1212
Smart speakers are likely to drive demand and future intent; partnerships and voice-activation integration will be vital
Significant promise in voice controlled digital assistants
Qualitative 2017:
131313
Speakers are big & growing,but aren’t the whole story.
“Own & Regularly Use”
11%
9%
6%
Surveillance cameras
Door locks
Window sensors
13%
12%
10%
9%
9%
8%
4%
Thermostat
Lighting
Garage door openers
Kitchen appliances
Cleaning
Electrical outlets…
Centralized hubs
17%Voice-activated
speakers
Voice-activated SpeakersConnected home Security
Connected home solutions/ appliances
17% 17%27%
CTAM Connected Consumer 2018
141414
0
20
40
60
80
100
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
HDTV
Smartphone
DVR
SVOD
Tablet
Smart TV
Smart Speakers
Smart speaker growth mirrors recent tech
Growth Curves of US Technology Adoption% of HH
Initial U.S. Release DatesAmazon Echo: Jun 2015Google Home: Nov 2016Apple HomePod: Feb 2017
CTAM Connected Consumer 2018
151515
Specific Smart Speakers Owned(among smart speaker owners)
Amazon dominates current smart speaker ownership
0%
10%
20%
30%
40%
50%
60%
AmazonEcho/Echo
Plus
AmazonEcho
Dot/EchoKids Dot
GoogleHomeSmart
Speaker
GoogleHome Mini
SmartSpeaker
AmazonEcho Show
AppleHomePodspeaker
AmazonEcho Spot
GoogleHome
Maxi SmartSpeaker
AmazonEcho
Buttons
None ofthese
Don'tknow
Among Speaker Owners
Among Total
80% 16%
33% 6%
11% 2%
Initial U.S. Release DatesAmazon Echo: Jun 2015Google Home: Nov 2016Apple HomePod: Feb 2017
CTAM Connected Consumer 2018
161616
87%83%
74%74%
71%65%
63%63%63%
61%59%
57%57%
Listen to music
Get weather information
Set a timer or alarm
Look up things on the Internet
Get news headlines
Hear a joke
Get sports scores and schedules
Make to-do lists
Get a recipe or help with measurements of ingredients
Make shopping lists
Check my calendar
Play trivia
Control an Internet TV/video device
“Very Satisfied”(among users)
Speaker functions for TV need improving
Top 13 “used” features, in rank order
Top-Used Smart Speaker Functions(% use among smart speaker owners)
63%
64%
50%
51%
52%
CTAM Connected Consumer 2018
171717CTAM Connected Consumer 2018
Smart Speaker owners use or are interested in many TV functions
20% to 28% Are Using Smart Speaker “TV or Movie Content” Functions,If not using, most are Sampling or are Interested in using each:
(among smart speaker owners, ranked by % using or sampling)
VIEWER ENGAGEMENT
• Launch streaming apps• Learn info on a movie or TV show• Control basic TV functions• Set TV reminders or alerts• Pause, play, rewind, and fast forward• Tune to a specific TV show, movie, or service• Get recommendations• Find out when a movie or TV episode will be
available• Pause on one TV or device, resume on another• Find out new TV shows or movies added to On
Demand• Find out which On Demand shows or movies
are the most popular
• Record a TV show or movie• Play trivia games related to TV or movies• Provide reviews or summaries• Skip ahead through the commercials• Create personalized lists of TV shows or movies
• Play specific scenes on your TV• Play short clips or bonus content• Let TV shows/movies customize your home
atmosphere• Jump back 8 seconds to re-watch something
181818
Connecting to Connected Consumers can mean Enhanced Business.
ACQUISITION RETENTION VIEWER ENGAGEMENT
191919
27% 29% 30%
44%33%
21%
TOTAL Cable MSO TV Satellite TV Telco TV Overbuilder TV No Pay TV
Purchase intent is strong with Pay TV, esp. for Telco TV customers
(% intending any additional device Solutions or Security types not yet owned, or Smart speaker whether owned or not)
by MVPD TV Subscription Status
ACQUISITION
Intend any Connected home device purchase
10%
31%
8%
12%
38%
Connected Tech status among Pay TV customers
Connected Early Adopters
Connected Mainstreamers
Connection Prospects
Non-Committals
Resistors
CTAM Connected Consumer 2018
202020
5136
51
20 25
29
29
25
36 30
2035
24
45 45
Detractor (0-6)
Neutral (7+8)
Promoter(9+10)
RETENTION
CTAM Connected Consumer 2018
Connected consumers are happy TV customers
TV NPS: +32 +2 +27 -25 -20
Connected Early Adopters
Connection Prospects
Non-Committals
ResistorsConnected Mainstreamers
212121
Sources of Video Consumed Weekly
Connected consumers are highly video-active
80%
66%
53%
57%
73%
33%
25%
19%
Live as it airs on broadcast, cable or satellite TVnetworks
Streamed from the Internet on a TV screen
On Demand from cable or satellite
Streamed from the Internet on a portable device
Connection Targets
Non-Targets
VIEWER ENGAGEMENT
CTAM Connected Consumer 2018
222222
29%
17%
19%
17%
17%
22%
17%
17%
40%
31%
34%
34%
42%
44%
45%
44%
Control Internet-connectedTV/video device(s)
Control Internet- connectedlighting
Control or monitor anInternet-connected security
system
Control an Internet-connectedthermostat
Use Occasionally Use Regularly
Finding and controlling TV are common desires and functions
Smart Speaker “Control” Functions Used (among smart speaker owners)
VIEWER ENGAGEMENT
Connected Early Adopters Connected Mainstreamers
CTAM Connected Consumer 2018
232323
TV programmers have an enthusiastic audience in connected consumers
TOP NETWORK DIFFERENCESVIEWER ENGAGEMENT
17%
13%
13%
13%
12%
12%
12%
HBO
ESPN2
Nickelodeon
Disney Channel
Comedy Central
Showtime
Cartoon Network
Connected Early Adopters difference in “regularly watch”
vs. all others+
CTAM Connected Consumer 2018
2424
Providers can still drive value with customers who have experienced pirated content
Password sharing and impermissible content access will continue
Qualitative 2017:
252525
11%21%
34%44%
72%
29%
ResistorsNon-CommittalsConnectionProspects
ConnectedMainstreamers
Connected EarlyAdopters
Total
Video Piracy Services Used(any of the 4 types)
Video piracy is high among connected consumers
The 4 types described were:▪Devices that come with
software▪ IPTV subscriptions▪Deals with free programming▪ Subscriptions thru SmartTV
CTAM Connected Consumer 2018
2626
Simplicityis opportunity.
The best enabler will win
Qualitative 2017:
272727
Instinct is to stay with a single company
44%
24%
26%
5%
Preferred Approach for Smart Home Devices
(among the 3 key Target groups)
“Use one company for as many different devices/services as possible, so things will easily work together”
No preference
“Choose different companies for your various devices/services, as long as you can get things working together”
Don’t know
CTAM Connected Consumer 2018
282828
36%
32%
30%
27%
26%
25%
24%
23%
22%
22%
19%
29%
37%
48%
49%
50%
58%
50%
50%
59%
60%
67%
Centralized hubsWindow sensorsElectrical outlets
Door locksCleaning
Surveillance camerasKitchen appliances
Garage door openersThermostats
LightingVoice-activated speakers
Intend to buy (8-10) Own
84%
17%
17%
18%
17%
17%
18%
17%
15%
17%
18%
13%
10%
15%
18%
21%
23%
29%
21%
27%
32%
26%
47%
among Connected Early Adopters
CTAM Connected Consumer 2018:
Connected Early Adopters want hubs; Connected Mainstreamers are less focused
among Connected Mainstreamers
Connected Home Device Purchase Intent vs. Ownership
47%intend any intend any
292929
59%
44%
42%
38%
35%
34%
32%
32%
30%
27%
22%
Voice-activated speakers
Surveillance cameras
Thermostats
Cleaning
Kitchen appliances
Window sensors
Door locks
Lighting
Electrical outlets
Garage door openers
Centralized hubs
Intend to buy (8-10)
Smart Home Device Purchase Intent(among Connection Prospects, %8-10/Likely to Purchase)
CTAM Connected Consumer 2018:
Connection Prospects likely to enter via smart speakersare
Connection Prospects
8%
3030
Strong emotional benefits help market connected solutions - but do vary by device category.
313131
Connected device appeal shifts by type
Top Important Factors/Appeals of Connected Home Devices(among those who own or are likely to purchase a smart home device)
Smart Speakers = Part Practical, Part Fun• Make tasks easier, enjoy looking up facts• Fun to play with• Enjoy the feeling of control
Smart Solutions/Appliances = Highly Practical• Make tasks easier, make me more efficient,
save me money• Also freedom to check in from anywhere
Smart Security = Strong Feelings• Peace of mind, enjoy the feeling of control,
freedom to check in from anywhere
Overall Brand Choice• Easy set-up• Reliability• Reputation• Overall savings
CTAM Connected Consumer 2018
323232
Most smart home consumer targets embrace future “Internet of Intelligence” features
%4+5/Interested, among the 3 key Target groups
55%Devices that get to know and adapt to me
62%Put together info from multiple sources I use, to anticipate my needs
57%Intelligent lists that seek and make recommendations to me
66%Making my devices, platforms, brands work seamlessly together
67%Remotely program and control displays, lighting, etc. to automatically adjust to my preferences
58%Holographic images and information that float in the air
CTAM Connected Consumer 2018
3333
The recent rapid growth curve should be expected
to continue
1
IMPLICATIONS
2
Pay TV and connected consumers go hand in hand
4Natural convergence of the connected solutions vertical
and heavy video consumption
5
Caregivers remain a great targetgroup for connected solutions
3
Simplicity is a core opportunity
7Strong emotional benefits help
market connected solutions - but do vary by device category
8 8
Smart speakers are likely to drive demand…and voice has definite
promise for TV content discovery
6
Providers can still drive value with customers who have experienced
pirated content
9 8
The Connected Consumer Market is Large and
Multi-faceted