TREND INSIGHTS MEDIA & TECH TRENDS FOR 2017

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1 TREND INSIGHTS MEDIA & TECH TRENDS FOR 2017

2 MEDIA & TECH TRENDS FOR 2017 There were several noticeable tech and video trends in 2016 that impacted consumers and marketers; they may become even more prominent in Below are six of them. esports turns video game playing into a spectator sport. This activity has been growing in popularity. With over 40 million viewers, many of them young males, and rising, content is available online and on TBS. Can we expect a breakout year in 2017? In 2016, with political news, sports and the debut of Facebook Live live streaming video became a popular. In 2017, Hulu will offer live streaming service to subscribers from broadcast and cable networks. Virtual reality (VR) provides viewers with a 360-degree immersive experience. In 2016, Syfy introduced a short-form series in VR, and NBC aired some Olympic content in VR. Major tech companies are continuing to invest in VR. A big phenomenon in 2016 was Pokemon Go, which became a household name in July. The augmented reality app was popular with consumers and location based marketers see great promise. 2 TRENDS INSIGHTS

3 Now that high def TV has a household penetration of over 90%, here comes 4K TV, or Ultra HD, with four times greater the picture resolution. Household penetration is expected to grow with prices dropping, but 4K content is lagging. In 2016 there were 455 original scripted entertainment shows, more than doubling the amount from With more original content coming primarily from Netflix, Amazon and other streaming sources, there could be 500 programs in esports: esports is video game competition played by professionals for spectators online, on television or in person. According to Deloitte Global s report esports: Bigger and Smaller than You Think released in 2016, a major esports event can have 40,000 people watching in person, and tens of millions watching over the web. A 2016 Nielsen esports Report Highlights Rapid Growth in Fandom of Professional Competitive Gaming, found 14% of Americans age 13+ were fans of esports, an increase from 8% in 2015 [1]. Nielsen also said esports is particularly popular with males (77%) and Millennials (61%). A 2016 study by Newzoo The U.S. esports Audience, said there are 41.7 million regular or occasional viewers to esports in the U.S [2]. Moreover, the Nielsen s report found fans spend an average of four hours each week with esports. It s already been a popular online activity, led by YouTube and Amazon s Twitch.tv [3]. In June 2016, Activision Blizzard announced plans to stream esports content on Facebook Live [4]. esports made it TV debut in May 2016, when TBS began airing an eleague series on Friday nights [5]. For 2017 Mashable expects larger prize money for competitors, more viewers and traditional sports franchises (e.g., NBA teams) getting more involved with esports [6]. Live Streaming Video: With sporting events, awards shows and political news coverage, live streaming video became popular with viewers in With more video content, the growth of mobile, and a push from social media, live video streaming is poised for growth in Live streaming first became popular with the launch of Meerkat and Twitter s Periscope apps in early 2015 [7]. In 2015 Facebook Live was launched for celebrities only, before becoming available to all users in April 2016 [8]. Also in early 2016 Twitter outbid Verizon and Amazon to live stream ten NFL Thursday night games [9]. In addition, in December 2016, CBS All Access also began streaming live NFL games [10]. For 2017, Hulu said it will launch live programming from cable networks and broadcast networks including content from two of its parent companies Disney and Fox as well as CBS [11]. TRENDS INSIGHTS 3

4 Hulu said the live service will cost subscribers less than $40 monthly. The new live service will complement its current on-demand offerings [12]. Virtual Reality: Virtual reality (VR) could be ready for growth in VR provides viewers with a 360-degree immersive experience in a simulated environment requiring specific equipment. PC World reported in 2016 there were several VR headsets introduced to the market, some were connected to high-end PC s, others to a mobile phone powered by VR [13]. Although VR content is more prevalent with video gaming, there was also some television content available. For the 2016 Rio Olympics, NBC televised 85 hours in virtual reality [14]. In September 2016, Syfy premiered Halcyon, a 15-part series. According to The Hollywood Reporter, the series had ten episodes to view on Syfy s linear channels globally and online; with five additional episodes viewable only in VR [15]. CNBC reported that so far, there have been a limited number of VR advertisers in such categories as tech, automotive as well as a few prominent marketers [16]. Business Insider anticipates the first killer app will hit the VR market in 2017 [17]. PC World says in 2017 there will be more VR content and expects the cost of equipment to drop boosting consumer adoption [18]. Augmented Reality (like Pokemon Go): Augmented reality (AR) overlays virtual and digital content into an existing (real-world) environment on a smartphone or tablet. For the first six months of 2016, few people had heard of augmented reality. That changed on July 6 when Pokémon Go was launched in the U.S. Variety reported that Pokémon Go became the most popular game app in U.S. history on both Android and iphone in its first week [19]. At its peak, in mid-july, Bloomberg reported there were 45 million daily users worldwide playing on smartphones, running around looking for virtual demons. Bloomberg also noted the game s popularity did later cool off [20]. In a report released in July 2016, Statista said in the U.S., 63% of the Pokémon Go players were female with nearly half of them 18 to 29 year olds (who remembered Pokémon as a kid). Sensor Tower said that on July 11, 2016, iphone users spent an average of 33 minutes and 25 seconds daily on Pokémon Go, more than time spent on Facebook, Snapchat, Twitter or Instagram. Marketers are also interested in AR, The Guardian said McDonald s was the first advertiser, as restaurants became Pokémon Gyms in 3,000 locations across Japan [21]. 4 TRENDS INSIGHTS

5 TRENDS INSIGHTS 5

6 4K TV: 4K TV (also known as Ultra HD) has four times the picture resolution of high-def (HD) sets. At present, 4K content has been limited, although NBC had 83 hours of the 2016 Olympics available in 4K [22]. Many 4K programs are available on Netflix and Amazon (many 4K sets are web enabled) as well as some movies and sporting events [23]. According to IHS, U.S. penetration of 4K TV sets will increase from 10% in 2016 to 34% in 2019 [24]. Driving growth is cost; in 2016, the average price for a 4K TV set dropped below $1,000 for the first time and IHS forecasts the price to average $830 in 2017 [25]. As 4K TV becomes a commodity, can 8K TV be far behind? According to Consumer Reports, some TV manufacturers are already showing examples of 8K displays, or TVs with four times the resolution of 4K sets [26]. 6 TRENDS INSIGHTS

7 More Scripted Entertainment Shows: The number of scripted entertainment programs (excluding daytime dramas, children s shows and specials) continues to grow each year. According to FX Research, which tracks the figure each year, in 2016, there was a record high 455 scripted programs across broadcast, cable, pay cable and online services, an increase of 34 from This was more than double the 216 scripted shows produced in 2010 [27]. Although basic cable is the top provider of original programming, online providers have been fueling the growth recently. The number of scripted programs on online services doubled in 2016 (from 2015) to 93 [28]. This trend will continue, Netflix announced it will commit $6 billion to content in 2017, increasing from $5 billion in 2016 [29]. In its second quarter 2016 earnings report, Amazon said it plans to double its budget for original content in the second half of 2016 compared with that of the second half of 2015 [30]. In 2017, CBS All Access will debut online The Good Fight (a Good Wife spin-off) and Star Trek: Discovery [31]. Furthermore, Apple is reportedly in talks with Hollywood producers about offering original video content that could be available as soon as the end of 2017 [32]. FX says 500 programs in 2017 is possible [33]. FOOTNOTES: [1] Nielsen s esports report released on November 4, 2016 [2] Newzoo esports study released on July 26, 2016 [3] Fortune, February 26, 2016 [4] Variety, May 12, 2016 [5] Adweek, February 8, 2016 [6] Mashable, December 28, 2016 [7] Fortune, April 27, 2016 [8] USA Today, April 6, 2016 [9] Fortune, April 15, 2016 [10] Variety, December 1, 2016 [11] Wall Street Journal, January 4, 2017 [12] Variety, January 4, 2017 [13] PC World, December 22, 2016 [14] Variety, June 30, 2016 [15] Hollywood Reporter, February 12, 2016 [16] CNBC, August 19, 2016 [17] Business Insider, November 18, 2016 [18] PC World, December 22, 2016 [19] Variety, October 24, 2016 [20] Bloomberg, August 23, 2016 [21] The Guardian, July 20, 2016 [22] Variety, July 27, 2016 [23] Consumer Reports, December 16, 2016 [24] Fortune, June 2, 2016 [25] USA Today, January 3, 2017 [26] Consumer Reports, January 7, 2017 [27] Variety, December 21, 2016 [28] Business Insider, December 23, 2016 [29] Forbes, December 27, 2016 [30] CNBC, July 28, 2016 [31] Hollywood Reporter, January 5, 2017 [32] Forbes, January 12, 2017 [33] Hollywood Reporter, December 21, 2016 TRENDS INSIGHTS 7

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