STREAMING VIDEO WARS

STREAMING VIDEO WARS

FEBRUARY 2020PRESENTED BY TIM ANNONI

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Research set-up & objectives

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A GROUPM PROPRIETARY SOLUTION TO UNDERSTAND RELEVANT MARKET DYNAMICS


3

SET-UP OF THE RESEARCH

CAWI interviews with high quality standards on data collection

Solid sample size of 700 people for thorough in-depth analysis

Representative for the Belgian population 18-59

Strict weighting procedures (language, gender, age, region, social groups & education level)

Two interview waves to understand market dynamics: March 2020 (just before COVID-19) December 2020 (2nd Lock down)


1. Could we speak about a COVID-19 effect on the (paid) streaming video behaviour of the

Belgian population?

2. What market dynamics can be observed due to the new competition (paid): who are the

winners and the losers ?

4

TWO KEY RESEARCH OBJECTIVES


5

DETAILED RESULT OVERVIEW

General trend in the streaming world

Awareness of streaming and VOD services

Success free versus paid services

Subscription battle of different actors

Loyalty analysis

Future market potential


Results and key learnings

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A GROUPM PROPRIETARY SOLUTION TO UNDERSTAND RELEVANT MARKET DYNAMICS


STREAMING VIDEOON THE RISEThe paid streaming services boom

7


8

March ‘20 December ‘20

53.5% 57.6%Amount of people with at least one subscription

7.7%Relative increase

STREAMING SUBSCRIPTION BASE INCREASES WITH 8%58% OF BELGIANS NOW HAVE AT LEAST ONE PAID STREAMING SUBSCRIPTION


INCREASED FAMILIARITY FOR PAID STREAMING PLATFORMS

Paid services slowly close awareness gap with free services

9


10

5.324.80

5.335.64

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Free streaming platforms Paid streaming platforms

Average amount of platforms people are aware of

March '20 December '20

2.91

1.38

2.81

1.64

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Free streaming platforms Paid streaming platforms


Average amount of platforms people are familiar with

INTEREST IN PAID SERVICES IS ON THE RISE

AVERAGE NUMBER OF PAID PLATFORMS KNOWN INCREASES


74%

53%46%

53%46%

38%

56%

38%30%

7%16%

8%

54%

16% 18%12% 12%

21% 17% 16%8%

94%88%

84% 84% 84% 84% 83% 82% 80%

52%

44%

32%

90%

77%72%

65% 64% 64% 63%58% 57%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Awareness - Familiarity (December ’20)

Familiarity Awareness

11

FREE SERVICES BEST KNOWN, BUT PAID SERVICES SLOWLY CLOSE THE GAP

NEWCOMERS CONQUER SHARE OF MIND BUT STILL MISS FAMILIARITY

*Data is only based on numbers from the region where the platform is active (National or Regional)


-15%

-10%

-5%

0%

5%

10%

15%

Change in awareness and familiarity (March vs. December ’20)

Awareness Familiarity

12

STREAMZ AND DISNEY+ STRONGEST AWARENESS INCREASELAUNCH OF NEW PAID SERVICES CAUGHT THE ATTENTION



PAID NEWCOMERS GAIN GROUNDFREE VERSUS PAIDSWITCH

Streamz and Disney+ leave their markAmazon Prime also grows in their slipstream

13


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Viewership last 2 months per platform


14

NEW PAID STREAMING SERVICES ATTRACT NEW VIEWERS

STREAMING CONSUMPTION SHIFTS CAUSED BY THE PAID NEWCOMERS

*Q: Which of the following video streaming services, either free or paying, did you watch in the last 2 months?** Data is only based on numbers from the region where the platform is active (National or Regional)


15

March ‘20 December ‘20

76,9%

50,9%

68,2%

54,9%

Free servicesViewership last 2 months

Paid services Viewership last 2 months

-11.3%Relative decrease

7.9%Relative increase

THE PAID SERVICES WIN TO THE DETRIMENT OF FREE SERVICESSHIFT IN VIEWERSHIP PATTERN ACROSS THE STREAMING LANDSCAPE

*Q: Which of the following video streaming services, either free or paying, have you watched in the last 2 months?


THE SUBSCRIPTION BATTLE WINNERS AND LOSERS

The newcomers live up to their promise

16


43%

10%9%

6%

2% 2% 1% 1%

44%

9%11% 10% 11%

3%4% 3%

1%

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Netflix Proximus payingservices (TV Replay

etc.)

Telenet payingservices (Play etc.)

Amazon Prime Disney+ Be à la demande Apple TV+ Youtube Premium Hulu Streamz

Subscriptions % per platform


3%

7%

13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


etc.)



Subscriptions % per platform


NETFLIX STAYS DOMINANT PLAYER IN THE PAID ARENA

NEWCOMERS PASS THE 10% BAR; MOST OF THE REST IN SLIPSTREAM

*Dotted line indicates subscriptions based on active region only (National or Regional)


18

Subscription intentions (March ’20) Actual subscriptions (December ’20)

18%*

DECLARED INTEREST FOR STREAMZ BECOMES A REALITYMEASURED INTEREST IN MARCH FOR STREAMZ CLOSE TO CURRENT SUCCES

0.9%

21.9%

Yes, definitely Yes, I believe soNo, I don't believe so Definitely not

23%80%

conversion

In March ‘20 people were asked about potentially

subscribing to Streamz based on a concept description, but

without price mention.

18% represents the amount of people who have subscribed out of all the people that know the platform.

The current penetration for Streamz is 13% in active zone but only 72% know Streamz for the moment.

*Only based on people who are aware on the platform


Netflix

Amazon Prime

Apple TV+

Disney+

Hulu Youtube Premium

Telenet

Proximus

Be à la demande

Streamz

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Performance based on Awareness (December ‘20)

Awareness

Subs

crip

tions

%

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DISNEY+ AND YOUTUBE ROARING NAMES MUCH BROADER THAN PAID STREAMING CONNOTATION

NETFLIX, PXM & AMAZON CONVERT BEST AWARENESS TO SUBSCRIPTIONS



MULTI SUBSCRIPTION THE CONSUMER TRAP

Number of subscriptions is increasing due to fragmentation of ‘offering’

20


21

69.9%

30.1%

55.9%

44.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

1 Subscription More than 1 subscription

Amount of subscriptions


70%

25%3%

2%

56%

27%

11%6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1 Subscription 2 Subscriptions 3 Subscriptions 4+ Subscriptions

Amount of subscriptions

March November

AVERAGE NUMBER OF SUBSCRIPTIONS IS CLEARLY INCREASINGFRAGMENTATION OF OFFER PUSHES NUMBER OF SUBSCRIPTIONS

Avr. # subscriptions

March 1,4

Avr. # subscriptions

December 1,8

14%With only one

subscription take on at least another one

*Only accounts people who are subscribed to at least one streaming platform


22

13%

1%

3%

4%

7%

11%

10%

9%

11%

44%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Streamz

Hulu

Youtube Premium

Apple TV+

Be à la demande

Disney+

Amazon Prime

Telenet paying services (Play etc.)

Proximus paying services (TV Replay etc.)

Netflix

Current Subscriptions (December ’20)

AVERAGE (MATHEMATICAL) OF 3,2 DAYS PER WEEK VIEWING FOR PAID STREAMING PLATFORMS

STREAMZ & AMAZON PRIME UNDERPERFORM IN VIEWING FREQUENCY

*Q: How often do you watch television via video streaming (website or app) or via VOD (viewing on demand)?** Data is only based on numbers from the region where the platform is active (National or Regional)

3.8

3.2

3.1

2.2

3.7

2.4

3.9

4.1

2.6

3.3

Average days perweek viewed


A LOYALTY AFFAIRWINNING THE HEARTS

Are catalogues of streaming services interesting enough to retain customers?

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84% 82%77%

68%

87%90%

80%86%

81%89%

84% 87%

70% 68%

82%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


etc.)

Telenet paying services(Play etc.)

Amazon Prime Disney+ Be à la demande Apple TV+ Streamz

Customer loyalty among different streaming platforms


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44% 9% 11% 10% 11% 7% 4% 13%# of Subscribers

AVERAGE LOYALTY REACHES 83%SUCCESSFUL PAID STREAMING SERVICES INCREASE THEIR LOYALTY

*Q: For which of the following streaming platforms do you consider ending your subscription within the next 6 months?**Only contains people who are currently subscribed


A HARSH BATTLE IN A GROWING MARKET

The paid streaming market still has a big growth potential, but the cards are not played yet

25


26

10%

2%

3%

6%

10%

8%

9%

8%

40%

3%

2%

2%

4%

10%

3%

6%

5%

4%

13%

6%

6%

5%

12%

50%

18%

57%

48%

53%

53%

42%

47%

49%

34%

28%

78%

35%

43%

36%

23%

42%

36%

37%

10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Streamz

Hulu

Youtube Premium

Apple TV+

Be à la demande

Disney+

Amazon Prime

Telenet

Proximus

Netflix

December '20

Loyal Potentially Lost Recruit Beyond Range Unaware

56%

14%

17%

24%

16%

11%

9%

9%

4%

23%

Potential Subscribers

WILL CHURN INCREASE OR WILL AVR. NUMBER OF SUBSCRIPTIONS GROW

NETFLIX STAYS DOMINANT BUT NEWCOMERS CHALLENGE POSITION



Netflix

Amazon Prime

Apple TV+

Disney+

Hulu

YouTube PremiumTelenet

Proximus

Be à la demande

Streamz

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

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Non-subscribers

Futu

rein

tent

ion

Future intention of non-subscribers (December ’20)

RECRUITMENT POTENTIAL AMONG NON-SUBSCRIBERS (MATH) AVERAGES 7%

NETFLIX, DISNEY+ AND STREAMZ TOP LISTED IN EVOKED SET

Math avr. 7%

*Q: For which of the following streaming services would you consider subscribing in the future?*Data is only based on numbers from the region where the platform is active (National or Regional)


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2%1% 1%

2%1% 1%

11%

5%5% 5%

11%

3% 4%5%

3%

9%

0%

2%

4%

6%

8%

10%

12%

14%


etc.)



Intentions per platform (December ’20)

Sure Possibly

CURRENT TOP 3 IN POLE POSITION BUT STILL HUGE % UNDECIDEDTHE GROSS PENETRATION OF POTENTIAL SUBSCRIPTIONS EQUALS 69%

85% undecided

(possibly versus total)

Gross # potential

subscriptions 69%

*Q: For which of the following streaming services would you consider subscribing in the future?*Data is only based on numbers from the region where the platform is active (National or Regional)


57.6%

9.3%

33.1%

Net potential subscriptions (December ’20)

Current subscribers Potential new subscribers Non-subscribers

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66.9%

THE SUBSCRIPTION MARKET WILL GROW WITH 17%MARKET POTENTIAL OF SUBSCRIBERS ESTIMATED AT 67%

# Net potential subscribers

Belgium66.9%

Net subscribers’ growth is 17%, or 9 percent points increase compared to current situation, this is 58% current subscribers

Gross subscriptions’ estimated growth of 48% confirming the high undecided percentage (85%) and thus harsh battle for the viewer

Based on a current average subscription level of 1.8/HH we estimate a conversion of only 60% of the potential subscriptions increase (69% gross subscriptions)

+17% increase subscribers

+48% potential increase subscriptions

60% estimated conversion


MAIN TAKE OUTSOF THIS SURVEY

In the end the consumer has the final decisionWill the local offer be able to compete with the global players?

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CONCLUSIONS

Paid streaming subscriptions on the rise 12

3

4

58% of Belgians 18-59 declare having a subscription with a paid streaming platform; a rise of 8% December compared to March.

Shift in streaming consumptionResults show, to a certain degree, a shift from free streaming services to the subscription-based services between March andDecember 2020. Paid streaming viewership increases with 8% and free streaming viewership decreases with 11%.

Newcomers do not miss their entranceStreamz and Disney+ pass the bar of 10% subscriptions with respectively 13% (on active region) and 11% with most of the otherpaid platforms in their slipstream. A battle between Proximus and Telenet becomes visible.

31

Paid platforms increased awarenessNewcomers conquer share of mind, but still miss familiarity. Disney+ and Streamz pass the 70% awareness bar, but stay underthe 20% familiarity score.

5Multi subscription evolution

6Paid streaming market is booming

The average number of subscriptions is rising from 1.4 to 1.8. Platform loyalty is 83%. Streamz and Amazon prime still have somecatching up to do on weekly viewing frequency. They underperform, with resp. 2.6 and 2.2 days per week viewing, whilst theaverage is 3.2.

The subscription market will grow with 9 % points, bringing the total percentage of subscribers to 67%. Netflix, Disney+ andStreamz are in pole position to recruit (resp. 13%, 12% and 10%). More than 85% is still undecided. We calculated that only 60%of the potential subscriptions (intention to eventually take a subscription in the future) will be really converted.


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STREAMING VIDEO WARS