media forecast

2018

The way people consume their media is constantly changing. We’ve been tracking these habits through the annual Stuff* media channel study and the results are pretty interesting.

We’ve used the study for a few years to judge what we expect to happen. While we aren’t 100% accurate, we’re usually not too far away.

It’s our view on the world coupled with our view on what we can expect. Nothing too grandiose, just simple facts along with our view. We hope you find it useful for planning what to expect in 2018.

* Previously the Fairfax Media channel study on 1st Feb 2018, Fairfax Media rebranded to Stuff

Drivers of Change - Fibre acts as an enabler for disruption

Household connections speeds and bandwidth are increasing. Fibre penetration and increased connections will be the major distruptive force in 2018

*Source: http://thedownload.co.nz/benchmarks/, Chorus Network Connections and Speed, Dec 17.**Stuff are shareholders in Stuff Fibre. A Fibre only ISP

Connected Devices - Usage & Shifts

Over half of NZ Homes have TV connected devices

VOD & SVOD services now bigger than PVR and we expect further declines in PVR use.

Increases in video consumption enabled by increased fibre connections

Source: Nielsen Consumer & Media Insights Q1-Q42015 Dec-fused, Q315–Q216 Aug fused, Q316-Q217

YE Q4 2015 YE Q2 2016 YE Q2 2017

Personal video recorder

Game Console Over the top/Multimedia devices

(OTT)

Smart TV / 3D TV Smartphone Tablet Streaming video on demand (SVOD)

Video on demand (VOD)

38%36%

32%

7%10%

16% 18%23%

27%

61%65%

73%

34%38%

41%

7%

16%

31%

55%61% 61%

49%47%

44%

Video/Movie/TV Streaming - Usage & Shifts

Base: 2017 National Sample 2015 N=2,011, 2016 N=1,010, 2017 N=1,0012015/2017: Which, if any, of the following video/movie/TV streaming services do you currently use? 2016 Q. Which of the following have you used in the last week?

Stuff Pix is a streaming movie service due to launch early 2018 and Stuff Fibre are shareholders

2015 2016 2017

YouTube Netflix Lightbox Neon HULU+ None of these

TVNZ On Demand

TV3 On Demand

62%65%

59%

12%16%

48%

8% 7%

20%

42% 40%

29% 27%

1%7%

1% 1%1%

22%

8%8%

• Netflix rules and Lightbox will also grow, with Netflix to be on par with YouTube in 2018

• Any new entrants can expect growth with potentially 7-10% usage in year one achievable

Online Social Platform – Usage & Shifts

• This is the first time that we have seen weakening in sentiment towards facebook

• While facebook has strong reach, those using facebook ‘less’ likely to be younger i.e. 28% of under 35s using less often (but net change is similar at -3%)

• Trivial and time-consuming nature of facebook is what’s driving decrease in usage, in addition to the lack of control over content

• Of those leaving, around half have not replaced facebook with anything

• Those who have replaced facebook are mainly using Instagram, Twitter, email, face-to-face or phone conversations

• This fatigue, coupled with increased competition between social platforms means we expect social media fragmentation to accelerate in 2018

Base: 2017 National Sample N=1,001, Fairfax Sample N=1,114Q: Thinking about Facebook, which of the following apply to you in relation to your use of Facebook in the last 12 months?Please select all that apply.

*Net change = Less often + stopped – more often

*Net Change

-3%

Using facebook MORE often 20%

Using facebook LESS often 19%

STOPPED using facebook completely 4%

REDUCED the number of facebook friends I have 10%

Considered LEAVING faceboook 12%

Haven’t changed the use of my facebook 35%

NA- Haven’t used facebook in the last 12 months 14%

New Zealand online news sites 7% 40% +33% +29%

Social media sites 11% +23% NA34%

Online/digital newsfeeds/news alerts 8% +21% NA29%

International online news sites 8% 23% +15% +13%

Local community newspapers 19% 20% +1% -7%

Neighbourly 14% 15% +1% NA

Daily newspapers 30% 15% -15% -22%

Food magazines 22% 10% -12% -21%

Lifestyle magazines 25% 8% -17% -30%

Sunday magazines 29% 8% -21% -34%

Gardening magazines 19% 6% -21% NA

Media Consumption Trends - Reading

Base: 2017 National Sample N=1,001, 2016 N=1,010Q: Which of the below are you reading MORE / LESS than you were 6 months ago?

Less often More often 2017 2016Net Gain / Loss

Kiwis connection to news likely to remain

strong over 2018.

Print declines likely to reduce

making it three years in a row if forecast

holds.

Media Consumption Trends - Viewing & Listening

• Over last 12 months, only small changes in use of traditional media. Growth in video media channel solely due to streaming services

• Results show streaming services have overtaken SKY in terms of overall watching

• Online streaming will continue to grow in 2018

• In 2018, we expect traditional broadcasters to experience declines in the same order of magnitude as 2017

• Consumers will continue to take more control and we’ll therefore see ongoing growth in streaming services

Base: 2017 National Sample N=1,001Have watched/listened/used in past 12 months. Q: Compared to 12 months ago are you watching/listening/using the following MORE or LESS often, or about the SAME?

Less often

More often

Watched/listened/used in the past 12 months

Net Change

TV

Radio

Video/movie/TV streaming services

Sky TV

Music Streaming Services

92% 21% 17%

12%

45%

17%

35%

26%

17%

24%

19%

88%

63%

54%

51%

-4%

-14%

+28%

+16%

-7%

85% of respondents have used streaming services.

Spotify and YouTube the most popular music streaming services.

Media Consumption - Streaming Services

Video/Movie/TV streaming services

Music streaming services

Base: 2017 National Sample N=1,001Q: Which, if any, of the following video/movie/TV streaming services do you currently use?Q: Which, if any, of the following music streaming services do you currently use?

YouTube 59% Spotify 49%

YouTube 49%

iHeart radio 9%

Apple Music 8%

iTunes Radio / iCloud 8%

Pandora 7%

Google Play Music 7%

SoundCloud 6%

TuneIn Radio 3%

Rova 3%

Grooveshark 2%

Other 2%

None of these 14%

Mix Cloud 1%

Beats 1%

Sony Music 1%

Music Unlimited 1%

RDIO 0%

Netflix 48%

TVNZ On Demand 40%

TV3 On Demand 27%

Lightbox 20%

Sky On Demand 17%

Apple TV 8%

Neon 7%

Tivo 2%

HULU+ 1%

Quickflix 1%

Igloo 1%

Other 1%

None of these 8%

YouTube

most used a video streaming

service followed by Netflix

In our view the major disruptive media force will be driven by increased bandwidths and speeds being consumed by NZ households. The fastest growing segment of fibre connections is at 100MB+ and this opens up more opportunities across 2018. From more streaming to households experimenting with new Internet enabled devices including voice assistants

Takeaway - Drivers of Change

News plays an important role in online content consumption and we expect this to stay strong and keep growing in 2018

Traditional print will see further declines, however these should slow for the third consecutive year - newspapers <10%, mags ~15%

TV & Radio can also expect to see declines of around a similar magnitude as 2017 as these platforms become disrupted further by streaming services - TV ~5-10%, radio ~14%

Takeaway - Traditional Media

Streaming services will continue to grow across 2018, with continued significant growth of music streaming through Spotify and YouTube.

Netflix growth will continue, solidifying its leadership position in video streaming services. Its penetration will increase to mid 50% range

Takeaway - Streaming Services

Expect social media to remain strong in terms of reach, with facebook continuing to lead

But expect it to fragment further driven by those aged <35 who are moving to other platforms such as Instagram and Snapchat

First signs are showing that facebook may have an engagement problem with a portion of users stating that they are moderating their activity or considering leaving - expect reach to fall slightly or stay stagnant

Expect average age of facebook users to increase fast as <35s migrate to other platforms

Takeaway - Social Media

About This Study…

This report shares the first wave of data from the

annual Stuff media channel study

Sample: N=2,115

• N=1,001 National sample

• N=1,114 Study Conducted by The Thinking Studio and sample sourced by Yabble

• Supplemented by other data from Nielsen CMI, and Chorus

• Media forecast for 2018 developed by the Stuff Business Marketing & Insights Team

It is designed to provide a holistic view of market performance

This wave provides baseline measures

and where appropriate compares to the previous brand

health tracker

Majority of study conducted online between Q3/Q4 2017 by The Thinking Studio

Like to chat about how these findings might impact your business or marketing in 2018? Email us at businessmarketing@stuff.co.nz