Measuring the New Media Base: Moving from TV HHs to Video HHs Paul Rappoport, Centris

The Base

1. How large is the serviceable housing market?

2. What are TV households and why is this measure insufficient for estimating video households?

3. What is required to measure video households?

4. How large is the over-the-top market?

© CENTRIS 2012 | PROPRIETARY AND CONFIDENTIAL 2

Serviceable Housing Measures

© CENTRIS 2012 | PROPRIETARY AND CONFIDENTIAL 3

The Housing Inventory

11-Apr 12-Mar 12-Apr

TOTAL RESIDENTIAL UNITS

132,893,125 133,486,792 133,559,094

OCCUPIED UNITS 117,655,548 118,469,119 118,622,147

OCCUPANCY RATE (% OF TOTAL UNITS)

88.6% 88.7 88.8%

VACANT UNITS 10,551,379 10,253,799 10,190,187

VACANCY RATE (% OF TOTAL UNITS)

7.9% 7.7% 7.6%

SEASONAL UNITS 4,686,198 4,763,874 4,746,760

SEASONAL RATE (% OF TOTAL UNITS)

3.5% 3.6% 3.6%

Which measure should one use? 1.  Measuring TV

penetration and the # of TVs is at best problematical

2.  Multiple ways to connect to video. Now what?

What is a Video Household?

© CENTRIS 2012 | COMPANY CONFIDENTIAL | SUBJECT TO NON-DISCLOSURE AGREEMENT 4

Non TV HHs

Pay

TV H

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eho

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Broadband Households

Wireless Households

Ho

use

ho

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Research and Data Requirements

1.  What is the penetration rate of broadband, preferably by speed (with particular emphasis on fiber and DOCSIS 3.0 deployment)?

2.  What percent of households are “broadband only” (within the group of non Pay TV households)?

3.  What is the penetration rate of devices that can be used to consume video? Specific interest in mobile connection using smartphones, tablets, computers, and devices that connect to the TV (Roku, Apple TV …)

4.  Is the focus the household or the individual or both? 5.  What are households consuming in addition or in place of

traditional TV programming over the TV? How much of their consumption is free streaming? Paid or subscription based streaming?

6.  How can one project these requirements to local geographies?

© CENTRIS 2012 | PROPRIETARY AND CONFIDENTIAL 5

Methodology

Centris fields a continuous national address-based household survey and properly marries the results to a companion Internet panel survey to collect and track information on a household’s video services (including Pay TV provider, paid and free streaming services, devices and so forth). The combined sample size is well over 100,000 surveys per year. Centris tracks broadband available and adoption using a set of very large scale Internet transactions databases. This information is then overlayed against telco and MSO footprints to provide share by provider. Centris tracks fiber by census block Centris’ unit of geography is the census block and census block group. Households are computed by census block. Census then models consumption of video by genre, the number and choice of devices, and a household’s spending on Pay TV as well as their willingness to spend on all forms of video

© CENTRIS 2012 | PROPRIETARY AND CONFIDENTIAL 6

USAGE SEGMENT CLASSIFICATION

Pay TV HHs: 87% Q2’11 Q1’12 Change

Cord Loyalist Uses Pay TV service only

Used No OTT services in Past 30 Days

41% 34% -7%

Cord  Coupler Uses Pay TV service and

Has Used OTT services in Past 30 Days

46% 53% +7%

NON-PAY TV HHs: 13% Q2’11 Q1’12 Change

Cord Cutter Uses No Pay TV service but

Used OTT and/or OTA services

5% 5% --

 Cord Non Converter Never Used Pay TV service

Uses OTT and/or OTA services 5% 5% --

Cord Rejecter Uses No Pay TV service and

Uses No OTT services 3% 3% --

SUBSCRIPTION SEGMENT CLASSIFICATION (prelim.)

Pay TV HHs: 88% April’12

Doesn’t Subscribe or Use OTT Service 29%

Has Subscription OTT Service 34%

No Subscription--Pays Per Use/Download 6%

Has Only Used Free OTT Service 19%

NON-PAY TV HHs: 12% April’12

Has Subscription OTT Service 6%

No Subscription--Pays Per Use/Download 1%

Has Only Used Free OTT Service 3%

Never used OTT Service 2%

© CENTRIS 2012 | COMPANY CONFIDENTIAL | SUBJECT TO NON-DISCLOSURE AGREEMENT 7

Classifying “over-the top”

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KEY Solid Bars Q1’12 Clear Bars Q4’11 Lightly Shaded Bars Q3’11

CORD LOYALIST

CORD COUPLER

CORD CUTTER

CORD NON-CONVERTER

Total Video Viewing

CORD REJECTER

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4

Q1  5%   100%  

Q1 53%

Q1 34%

Q1 5% Q1 5%

Q1    3%  

“Over-the-top” is subject to multiple interpretations

0%

20%

40%

60%

80%

100%

. .. Q2'11 Q3'11 Q4'11 Q1'12

Device Ownership Trend Total Internet HHs

Desktop (D) Laptop (L) Smart Phone (S)

Tablet (T) Media STB (M) Gaming Console (G)

Internet Enabled TV (TV)

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Q2 ‘11

Q1 ‘12 Change

D 83% 78% -5

L 71% 77% +6

G 51% 59% +8

S 46% 58% +12

ITV 22%

(Q3’11)

24% +2

T 12% 22% +10

M 7% 8% +1

APRIL’12 DEVICE OWNERSHIP

DVD/Blu-ray Player connected to the TV

85%

DVD/Blu-ray Drive on a Computer 75%

Paul Rappoport prapp4@gmail.com 484-535-1021