Reality check State of the media democracy Multi-National Third Edition, select highlights Contents 1 4 Survey Overview Select Country Insights 5 Advertising 6 Online Activities 7 Print & Publishing 8 Music 9 Technology 10 Cell Phones 11 Television 12 Video Games 13 Select Multi-National Findings 14 Advertising 3.0 17 Appointment TV Redux 20 Cell Phones: The Vindication of the Two-Inch Screen 23 Content is King, and the Network is Queen. God Save the Queen! 27 Disc vs. Download: Dim Future for Shiny Discs?? 31 Millennials: The Global Early-Adopter Generation 34 User-Generated Content: From Novelty to Habit 38 Want to Learn More? Survey Overview About Deloitte's “State of the Media Democracy” Survey • This is the third edition of research that was commissioned by Deloitte’s Media & Entertainment practice – and the first to focus on consumers across five international markets. • Focusing on four generations, the survey provides a “reality check” on how consumers between the ages of 14 and 75 are interacting with media, entertainment, and information — and what their preferences might be in the future. • Fielded by an independent research firm from September 17th – October 20th, 2008, the survey employed an online methodology among 8,824 consumers: Brazil: Germany: Japan: United Kingdom: United States: 1,022 1,882 1,841 2,023 2,056 • Several companies have continued to help us shape the survey and discussed the initial results with us. • For meaningful differences, we look for differences in yearover-year tracking and generations of at least 5 percentage points. For data in hours, we look for year-over-year differences of 0.5 hours and 1.5 hours when comparing generations. • We will repeat the Survey annually to spot emerging trends and changes in behavior and technologies. Why a Media Democracy? Because this is a global age in which everybody contributes – not just the traditional media companies. Empowered by new technologies, customers now "vote“ through their actions for new sorts of content, new access devices, distribution platforms, advertising models, and pricing schemes. 1 Talking ‘Bout the Generations Each edition of Deloitte’s “State of the Media Democracy” Survey focuses on four generations: Millennials: Trailing Millennials: Leading Millennials: (Birth Years: 1994 -1983) Generation X: (Birth Years: 1982 -1966) Baby Boomers: (Birth Years: 1965 -1947) Matures: (Birth Years: 1946 -1932) 62-75 43-61 0 Millennials Generation X Boomers Matures *U.S. Census Bureau - Population Division U.S. Interim Projections 200 - 2050 2008 U.S. Population* 80 14-25 14-19 20-25 60 Millions of people 40 26-42 20 2 Chapter Index of Survey Findings Deloitte’s “State of the Media Democracy” Survey, Third Edition provides insight into dozens of topics, including those listed below. This document provides findings in just a few of those areas. Advertising 3.0 Appointment TV Redux Baby Boomers Books: Cover to Cover Cell Phones Content is King; the Network is Queen Disc vs. Download Digital Photography/Cameras Future of the Media Democracy Gaming Gender Attitudinal Differences Generation X Internet Insights Magazine Insights Matures Media Products: Ownership & Preferences Media Services: Subscriptions & Preferences Media Time Use Media Platforms: Usage & Preferences Millennials: The Global Early-Adopter Generation Millennials (Leading vs. Trailing) Movies and DVDs Music Insights Newspaper Insights Radio Insights Search Shopping Insights Social Networking & Community Insights Technology Insights Telecom Insights Television & DVR Insights User-Generated Content Viral/Social Activities 3 A Page head at autat nit nim nim ing et acilit alit ipsum Select Country Insights 4 Advertising • Television advertising is universally considered the most influential across all five markets. • A consistent second-tier of influence also emerges including traditional outlets such as magazines, newspapers, as well as online sources. • With the notable exception of Brazil, consumers find online advertising to be more intrusive than traditional outlets such as magazines and newspapers. • Japan is least likely to pay greater attention to print ads in magazines and newspapers versus online ads. • German consumers are the least interested of any of the five surveyed countries in targeted online advertising, and least interested in advertising which provides some sort of quid pro quo such as free content. • Consumers in Brazil and Japan are generally more open to interacting with online advertising, if it is targeted to their specific needs and particularly if it delivers a tangible upside such as information or free content. • The majority of consumers do not wish to pay a significant amount of money (less than $25 in the U.S.) for an ad-free online experience. • The top two Internet advertising influences across all countries are search engine results and banner ads. 5 Online Activities • Using search engines is the most common online activity across all countries. • The majority of consumers across all five countries feel their computer has become more of an entertainment device than their television. • Internet use skews somewhat higher in Japan, and considerably higher in Brazil, where consumers spend almost twice the amount of time on the Internet (NOT including business/ school time) as they do watching TV. • Brazilian consumers are highly engaged in a variety of online activities — specifically interaction with user-generated content, downloads, and social networking. • Across all markets except Japan, contributing to social networking pages is the most common outlet for creating online content (in Japan, blogs are the most common form of this activity). • Consumers in all markets are spending a significant proportion of their online video-watching time on user-generated content — particularly in Brazil. • A majority of consumers have learned of a product for the first time online — this is especially true in Japan and Brazil. • Consumers in Germany and Japan place relatively less value on always having the absolute fastest Internet service available to them. • Perceptions of being limited by their Internet access (‘I would download more videos if my connection was faster’) are strongest in Japan and Brazil. 6