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MAPPING THE EVOLVINGENTERTAINMENT LANDSCAPE

A Consumer Insight Proposal- Syndicated Study -

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SECTION #1

Background and Research Objectives

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“As entertainment moves increasingly digital and online, content ownership isn't proving to be a defining advantage, as consumers demand convenience of usage, affordability and wide range of choice for gadgets and Net-linked services’’

Howard Stringer, Chief Executive, Sony Worldwide

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BACKGROUND: THE CHANGING FACE OF ENTERTAINMENT

The Entertainment industry is changing at a pace that has never been seen before, fuelled by the explosion of new digital technologies which are shifting the point of gravity, enabling consumers to choose which content they wish to see and, more importantly, when and where they want to see it.

Driven by technological advances such as the development of DVD in ’93 and the invention of digital and 3D projection capabilities at the start of the last decade, more recent developments such as the advent of High Definition technology, Blu-Ray and changes in the multi-faceted digital and mobile platforms, mean the industry is facing a revolution which, by its very nature, is re-defining the entertainment frame of reference for consumers.

This is already putting major pressure on the traditional ‘window’ system; is forcing new business models to be developed, and adds commercial complexity due to the increasing number of new platforms available to the consumer.

And the Future? The switch from Analogue to Digital TV and introduction of 3D TV mean that advances in in-home entertainment technology and networking are set to continue. The revolution continues apace.

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RESEARCH PROPOSAL: DEFINING THE OBJECTIVES

First Movies are proposing to carry out a comprehensive multi-platform and multi-channel pan-industry syndicated study, with a view to mapping out and defining the current and emerging entertainment landscape, from theatrical through to digital and mobile platforms.

The main objectives of the research will be:

a) To understand consumer perceptions of and their actual behaviour within today’s holistic Entertainment spectrum, and how this might differ by demographic; socio-economic criteria, or life-style choices: What are consumers prepared to watch and to play? In which environments? On what scale?

b) To determine how the different entertainment platforms inter-relate and, as such, the price elasticity within each of these: How do consumers navigate between the various platforms? What are consumers prepared to pay for each of these platforms?

c) To project future consumption behaviour of individual platforms and how they’ll fit into lifestyle expectations / choices: Is there any cannibalisation effect as a result of the multi-platform consumption? Is overall movie consumption increasing as a result of the new mediums?

The study will embrace a range of different socio-economic and cultural segments and will roll out across key International markets, beginning with the UK; Germany and France; followed by Japan and South Korea later on .

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RESEARCH PROPOSAL: DEFINING THE SCOPE OF THE STUDY

II. HOME ENTERTAINMENT 

I. THEATRICAL 

DVD (Standard & Blu-ray)

Rental

3D TV

High Definition TV

Games – Consoles; Online; Mobile

MP3 Players

PHYSICAL MEDIA/ HARDWARE

 

DIGITAL 

2D

3D

IMAX

DIGITAL

CINEMA 

SVOD (TV)

TVOD (TV)

Catch Up TV (TV)

Subscription TV (TV)

Streaming (PC)

Downloading (PC)

DVD Digital Copy (PC)

Mobile Viewing (Mobile Devices)

The study will explore perceptions of and the consumption levels across the following platforms / channels:

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The research findings will allow you to:

1. Understand the holistic picture of Entertainment today, with an in-depth focus on Movies and Gaming: a) What platforms are being used and by whom? b) What are consumer views of the current cinema experience? c) How are traditional movie consumers adjusting their relationship with film outside of the theatre with reference to home entertainment and VOD? d) What impact is the dynamic Gaming sector having upon movie consumption?

2. Determine how the Entertainment landscape will evolve over the next 12 to

18 months and longer term: a) What is the prognosis for DVD based on current consumer views / behaviour? b) What about the future of theatrical viewing? c) Is there a strong future for Blu-ray based on how consumers see this technology today? d) Is 3D at home likely to be embraced and valued? What are the technological barriers? e) What is being viewed ‘on the go’ and how are consumers utilising mobile technology?

3. Determine how you as a studio should rise to the challenge of a greater digital age. How do you identify and design new digital business models based on relevant consumer insight: a) What platforms are consumers actively embracing digitally and how do they inter-relate? b) What are they prepared to pay for these platforms? c) How is piracy influencing behaviour? d) How are they becoming educated about these platforms? e) What is the relationship between DVD and download sales? f) Which is winning the battle and how will increased / easier access to digital files impact DVD?

RESEARCH PROPOSAL: WHY GET INVOLVED?

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SECTION #2

Study Design

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RESEARCH STRUCTURE

MODULE 2:

THE THEATRICAL EXPERIENCE

MODULE 3:

THE ROLE OF HOME ENTERTAINMENT (MOVIES;

TV, and GAMES)

MODULE 4:

THE DIGITAL PLATFORM

MODULE 5: NEW TECHNOLOGY:

BLU-RAY / 3D

MODULE 6: THE IMPORTANCE OF

DIFFERENT MEDIA / THE ROLE OF THE INTERNET

MODULE 1:DETERMINING THE CURRENT MINDSET

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THE RESEARCH STRUCTURE

The diagram below outlines the proposed holistic research structure, with a detailed explanation of each module on the following pages. It should be noted, that this approach is flexible; meaning that individual elements of the research, within each stage could be added or removed to prioritise specific research objectives, or to accommodate potential budget constraints:

PRICING ELEMENT

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(1) Segmenting consumers based on their socio-economic background; life-style choices / attitudes, and claimed media consumption / ownership:

Determining ownership levels of hard media and consumption levels of digital alternatives / frequency of cinema-going

Understanding in what context different media types are consumed (if at all); and determining loyalty levels

Future purchase intent of selected media types

Attitudes towards cinema vs. digital alternatives

General attitudes (life-style choices; aspirations;)

Social class / region / decision maker classification

(1I) Understanding how consumers navigate the current Entertainment landscape against a backdrop of social, societal and family commitments:

How is leisure / entertainment time structured and for whom?

How do consumers plan their entertainment time and for what specifically?

What leisure / socialising / family (demographic) choices are being made?

What impact does work-life balance / in-balance have upon leisure behaviour?

Determine the monthly allowance for leisure activities and the share allocated to film related activities

THE RESEARCH CONTENT

MODULE 1: UNDERSTANDING THE CURRENT CONSUMER MINDSET

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THE RESEARCH CONTENT

Understanding where theatrical viewing sits in relation to alternative platforms:

What drives theatrical choice as compared to home viewing? Do consumers see certain genres of films as more suited to home viewing / made for DVD? Why?

How do consumers decide to view a movie compared to other alternative leisure sources?

How do consumers view the current cinema experience ? (And are they prepared to pay more for an improved experience?)

Is going to the cinema considered a treat or an everyday experience? Why is this?

What value (emotionally) does cinema-going hold over other activities? How disposable is movie-going when finances are strained? Determining price-value perceptions of cinema-going vs. other alternatives.

What is cinema-goers’ appetite for seeing films in 3D or at IMAX? What are the perceived advantages / drawbacks of a 3D viewing? How have these perceptions changed since the success of AVATAR?

How do consumers view the current window constraints in relation to film? What impact does it have upon TV / Rental / VOD / DVD viewing?

Hollywood v Local: what is the relationship between Hollywood and local product,? How is each perceived? Is local fare perceived as more suitable for home viewing? Why? Are there gaps in the market for local product? (Source materials etc.)

MODULE 2: THE THEATRICAL EXPERIENCE

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THE RESEARCH CONTENT

Determining the factors driving the choice in Home Entertainment (HE):

Whether and how frequently do consumers utilise the various HE options (DVD; VOD; Gaming; TV; etc.) and whether consumption of individual HE options differs by demographic or socio-economic factors?

What key devices / viewing sources are used: consoles / set-top boxes / laptops etc.?

What motivates the purchase or rental of a movie on DVD?

Determining the frequency of buying / renting DVDs (and sources) as well as ownership levels;

Whether Gaming is affecting movie and TV consumption? Is there a cannibalisation effect?

What are consumers’ perceptions of 3D technology for the home? Can they see a role for 3D TV? Would they embrace this?

Determining satisfaction levels with TV content and its impact on choice of other HE alternatives.

MODULE 3: THE ROLE OF HOME ENTERTAINMENT

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THE RESEARCH CONTENT

(1) Understanding how consumers interact with and navigate the current digital platform:

What digital content is being viewed and paid for? What is the motivation behind the consumption of digital content?

How does digital consumption fit into the lifestyle? Does it increase or decrease the overall viewing volume? How and where digital copy is viewed?

Whether and how ‘Catch Up TV’ and video on demand impact consumers’ viewing habits? Is the linear TV broadcast becoming redundant?

Whether and how frequently consumers watch video on mobile phones and MP3 players?

Who are the consumers who are already happy to pay for online content?

Whether and how does digital content influence behaviour in relation to traditional film activity (theatrical and HE).

(1I) Understanding consumers’ behaviour and attitude towards online piracy:

How do consumers view both physical and digital pirate activity?

Is piracy seen as illegal? To what extent are consumers involved in this activity? Are there generational differences?

MODULE 4: THE DIGITAL PLATFORM

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THE RESEARCH CONTENT

Establishing consumers’ perceptions and attitudes towards Blu-ray and 3D technologies:

Have consumers bought into the concept of High Definition and Blu-ray?

What are the barriers, if any, to the uptake of BD technology?

Assessing the potential for 3D at home: is the technology perceived as innovative / evoking aspirations? Or is 3D considered a theatrical treat?

MODULE 5: NEW TECHNOLOGY – Blu-ray / 3D

Establishing the role of the Internet in connecting users of information sources, word-of-mouth and film:

What are the key uses of the Internet by demographic group? (news; social networking; email; blogs; etc.)

How does the Internet influence behaviour in relation to film activity? How are consumers interacting with film on-line? (official film sites; fan sites; celebrity gossip sites; genre sites; etc.)

How is the Internet being used by the older generations? Are they trusting blogs? (or indeed even interested in them?)

What is the volume and frequency of downloading / streaming movies and TV content (both legal and illegal)?

MODULE 6: THE ROLE OF THE INTERNET AND OTHER MEDIA

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SECTION #3

Research Methodology(including timings and cost)

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THE RESEARCH METHODOLOGY

To address these six modules of research objectives we would recommend conducting an online quantitative study, with the option of a qualitative extension at a later date:

Quantitative Research

We would recommend beginning with a broad quantitative on-line survey to answer the following objectives:

To gain a nationally representative; up-to-date picture about consumers’ interaction with different Entertainment platforms currently available;

To segment consumers according to their socio-demographic; economic background and behavioural / attitudinal patterns (e.g. ‘early adapters’; ‘traditionalists’; etc.);

To gain ‘topline’ understanding about the current consumers’ mindset and uncovering current trends in relation to the Entertainment overall and across individual Entertainment platforms

Optional Extension Study

The findings from the quantitative stage would be further enhanced by a stage of

qualitative research, allowing for an in-depth exploration of the ‘specific’ consumer

groups (e.g. ‘early adopters’) or individual topics, such as accessing ‘the role of Internet

‘or any other of six Modules (e.g. The digital platform; the role of Home Entertainment;

etc.)

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THE RESEARCH METHODOLOGY – FLOW CHART

STAGE 1: QUANTITATIVE- On-line study comprising

6 modules -

RESEARCH OUTPUT

- Nationally representative picture of current Entertainment landscape;

- Solid base for a calibration / in-depth exploration for a qualitative stage;

- Detailed client de-brief and Insight / Strategy Workshop

STAGE 2: OPTIONAL EXTENSION STUDY

- Qualitative study allowing for further probing, focussing on in-depth

exploration of key areas - RESEARCH CONTENT Exact content will be defined based on the

findings from the quantitative stage (for example: What type of video content is being watched on-line and for how long? Is it just about TV shows and user generated clips or are sports and news significant? Why?)

A wide range of qualitative techniques could be applied;

RESEARCH OUTPUT In-depth understanding of behavioural /

attitudinal patterns Detailed client de-brief and Insight /

Strategy workshop

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THE RESEARCH METHODOLOGY : QUANTITATIVE STAGE

Spring 2010: Quantitative exploration in the UK; France and Germany

Autumn 2010: Quantitative exploration in Japan and South Korea

Beyond these, the research programme could be extended to other markets

SELF-COMPLETION ON-LINE QUESTIONNAIRE

SURVEY LENGTH: 40 MINUTES

SAMPLE:

N=2,000

NATIONALLY REPRESENTATIVE:- 13-65 years;- Quotas on gender / age / region.

TIMINGS:

TBC. The study will roll out in three European markets in the first half of 2010; followed by Japan and South Korea in the second half of 2010.

DELIVERABLES:

Written report and face-to-face verbal de-brief / Strategic Workshop

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THE RESEARCH METHODOLOGY : QUANTITATIVE STAGE

PROJECT FEE

UK +FRANCE or GERMANY

SOUTH KOREA + JAPAN

4 MARKETS COMMISSIONED

ONE CLIENT £113,641 £98,112 £199,558

TWO CLIENTS* £63,400 £57,500 £129,800

THREE CLIENTS* £47,500 £44,500 £99,800

* FEE PER CLIENT

UK +FRANCE or GERMANY

SOUTH KOREA + JAPAN

4 MARKETS COMMISSIONED

ONE CLIENT $180,690 $155,999 $317,297

TWO CLIENTS* $100,806 $91,425 $206,382

THREE CLIENTS* $75,525 $70,755 $158,682

* FEE PER CLIENT

ONE COUNTRY (FRANCE or GERMANY)*

£69,200 $110,028

* FEE PER CLIENTFEE CALCULATED AT THE EXCHANGE RATE: £1 = $1.59

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THE RESEARCH METHODOLOGY : QUALITATIVE STUDY

Stage 2: Optional Extension study will comprise of a number of qualitative research tools that could be used to explore the 6 modules in greater depth:

Focus Groups – a useful tool for exploring objectives in greater depth amongst specific consumer groups or segments that may be identified by the initial quantitative stage. Focus groups provide rich feedback as well as an opportunity to show stimulus to respondents and drill down into the reasons behind behaviour.

In Home Observation / Ethnography – in support of the feedback from the focus groups, a more ethnographic approach could be taken whereby moderators can undertake depth interviews within the homes of a pre-defined sample, observing usage and behaviour of a range of entertainment devices with specific groups in situ.

Web Labs – particularly relevant to module six (The Role of Internet and Other Media), web labs are similar to focus groups but each respondent is provided with a PC or laptop with which to explore/ demonstrate their online behaviour, specifically in relation to how they access entertainment content and related information.

Online Diaries / Blogs / Forums – additional online tools which allow us to record entertainment behaviour over time with core segments, set respondents specific tasks, or follow up on any further objectives or particular queries that may arise during the earlier stages of research.