Entertainment Market Research & Business Solutions

Entertainment consumption and distribution patterns are evolving, as are the traditional profiles of consumer demographics and usage habits. Entertainment Trends in America (ETA), a consumer tracking study delivered through a series of semi-annual reports, takes an in-depth look at shifting consumer behavior in entertainment consumption.

The NPD Group, in exclusive partnership with the DECE and clients, leads the way in understanding digital consumers and their perceptions, reactions, and usage levels of UltraViolet and other forms of digital video. Our exclusive UltraViolet Research Report, a multi-client UV research study, explores awareness and adoption of UV, the consumer decision cycle, and market size and share trended across multiple waves.

Explore Consumers' TV Viewing Hours. Now you can examine the latest video consumption habits of video-capable device owners. Our new Video Consumption Study delivers new insight straight from consumers. See inside the nearly 50 hours the average US household spends watching TV each week.

How content-hungry are smart device owners? Learn how connected devices and digital content work together to create greater demand for connected devices for video, music, gaming, and other content. Our report, Digital Content and the Role of Smart Devices, covers connect rates and content transactions by device type.

Entertainment consumption and distribution patterns are changing. So are the traditional profiles of consumer demographics and usage habits. Entertainment Trends in America (ETA), a consumer tracking study delivered through a series of semi-annual reports, takes an in-depth look at shifting consumer behavior in entertainment consumption.  It answers these questions and many more:</p>

Year over year, the number of homes with an installed connected TV device increased by six million, now totaling 60 percent of U.S. internet homes, according to the NPD Connected Intelligence Connected Home Entertainment report. As the number of connected TV homes continues to grow, the devices used to make those connections have shifted. In January 2017, streaming media players were the most commonly installed internet-connected TV device. Thirty-five percent of U.S. internet homes now have a streaming media player, up from 29 percent last year.

According to the NPD Connected Intelligence Connected Home Forecast, by the end of 2019, 238 million installed devices are expected to be connected to the Internet and able to deliver apps to TVs, representing 59 percent growth from 2015 to 2019. Connected TVs are projected to drive 45 percent of the growth over the coming four years, while less expensive, content-heavy streaming media players are projected to drive 35 percent growth.

More brands and manufacturers are competing for a place in the crowded activewear space, causing shifts to happen in terms of consumer perception and shopping outlets of choice, according to global information company The NPD Group. In the sports space, this is having an impact on more traditional and technical athletic product sales.

The Super Bowl is the nation’s highest profile sporting event, with strong appeal that extends far beyond that of football fans – in fact, nearly one-half of those who watch the Super Bowl on TV are not football fans, according to global information company, The NPD Group. All of these added viewers are tuning in for the halftime show, the buzzworthy TV ads, and/or as part of a friendly social gathering.

Choosing Olympic athletes for endorsement deals depends on more than just aligning with the right product category; the athlete’s fan base and the brands they use are equally critical to a successful partnership between brands and athletes, according to global information company, The NPD Group.

Political ideology aside, consumers share a lot of common ground in their entertainment choices, and they also have some very distinct differences, according to data from global information provider The NPD Group. According to NPD’s BrandLink, the most popular movie genres, music types and video games are favored equally by both Republicans and Democrats.

More than half (52%) of all U.S. Internet homes have at least one TV connected to the Internet, representing an increase of six million homes over the past year, according to The NPD Group Connected Intelligence Connected Home Entertainment Report.

Rihanna is the most marketable of all big-name celebrities, with fans that have more distinctive brand preferences than any other big-name celebrity in any genre (including athletes, actors, musicians, and others), according to data from global information provider The NPD Group. NPD’s new BrandLink database identifies the brand preferences of fans to help marketers identify the celebrities with which brand users are most likely to engage.

Today’s kids are growing up in a technology driven world, but that does not mean they are trading in dolls and board games for tablets and video games. In fact, the latest report from global information company The NPD Group, Kids Share of Time and Wallet 2015, found that traditional and technology play are co-existing as kids are devoting about the same amount of their time on both types of activities.

The NPD Group announced that it has purchased Nielsen’s VideoScan point-of-sale retail tracking service for the home video market. Combining the acquisition with its existing data assets and new services in development will enable NPD to offer unprecedented information and insight to help the entertainment industry understand and anticipate how consumers are acquiring entertainment.

Have you streamed video? Of course you have, as the majority of U.S. homes subscribe to a streaming service such as Netflix, Amazon Video or Hulu.

Have you watched programming on a 4K TV? Maybe, as 15 million U.S. homes already have one.

Have you streamed a 4K video on that TV? The odds are probably higher than you think. Here’s a quick overview of the landscape… bottom line is, the ability to stream 4K video content is ramping up fast.

4K UHD TV sales are accelerating rapidly and the resulting installed base tripled over the past year. In fact, a majority of consumers that purchased a 55-inch or larger TV during 2016 opted for a 4K model. But for 4K streaming content to reach viewers, they must also have enough bandwidth. Generally, consumers need a steady Internet speed of at least 25 Megabits per second (Mbps) for 4K content streaming.

Source: The NPD Group, Inc. / Retail Tracking Service;
NPD Connected Intelligence Connected Home Entertainment Report – January 2017

To observe viewer’s in-home Internet speeds a broadband speed test was embedded into our surveys. This does not track the speed consumers pay for, but how much they get throughout the day, as the average home has eight connected devices that may be eating up bandwidth. 

The net result showed that approximately six in ten 4K TV homes have fast enough Internet speeds to stream 4K video – totaling nine million households. The growth in 4K TV sales and fixed broadband speeds enabled this audience to grow from only 2.4 million homes one year ago... And the projections for the next few years, well, that chart looks like a hockey stick.

I often catch myself humming a song that’s stuck in my head. Maybe it’s something I heard mixed into the Pandora Top Hits station, or it could be from a video that auto-played on Vevo. Eventually, I’ll learn the name of the artist, and come to find out they’re from a genre I didn’t think I liked. Does my liking and singing a song by an artist known as a country singer mean (*gasp*) I’m a fan of country music? If so, how does that affect my interest in listening to their music or watching them perform? Is my shower-singing of Carrie Underwood’s Before He Cheats the start of my journey down a road of country music?

Apparently I am not that unique! It turns out that being a fan of a song does not necessarily mean that you are a fan of the artist that sings it; and being a fan of an artist does not necessarily mean that you’re a fan of the genre that they belong to. Who knew?

Carrie Underwood is unique however – as one of country music’s biggest stars, she has over 73 million fans, according to The NPD Group’s BrandLink service. Her popularity extends far beyond country music; and only one-half of her fans also describe themselves as a fan of country music! That’s a lot more than normal (typically about 70 percent of an artist’s fans do also consider themselves to be fans of the artist’s genre.)  Of these non-country-music-fans who are Carrie Underwood fans, a whopping one-third are African-American/Hispanic, which is double the incidence of African-American/Hispanics among self-identifying country music fans.

The upcoming Country Music Awards broadcast on Nov. 2 will likely attract droves of Carrie Underwood fans who want to see her named CMA’s Entertainer of the Year. Adding in the other nominees -- Garth Brooks, Luke Bryan, Chris Stapleton and Keith Urban – it brings the collective fan base of all nominees to over 100 million. Will the broadcast attract more viewers this year, perhaps pulling in those who otherwise don’t consider themselves to be fans of country music?  If so, that could mean not only a higher viewing audience overall, but one that was more diverse than advertisers might have expected.

Everyone loves a winner.  Athletes who competed in the Rio Games have more to look forward to than victory parades and talk show guest spots. Advertisers of every stripe clamor for Olympian endorsements, promising lucrative contracts in exchange for promoting their brands. It sounds like a simple enough quid pro quo proposition, but picking the right athletes depends not only on pedigree and personality, but also matching them to the brands used by their fans.

Champion athletes rooted in the same sport can draw distinctly different fan bases. Accordingly, brand endorsements by one athlete don’t automatically make sense for another. Case in point:  swimmers Missy Franklin and Katie Ledecky.  Missy was the darling of Team USA back in 2012 when she brought home the gold at the London Olympics, several times over.  After swimming for Cal-Berkely for two years, Missy turned pro and it released a flood of pent-up endorsements including Visa, United Airlines, Wheaties and Minute Maid. According to NPD’s BrandLink, Missy’s fans drink more juices than the average consumer, and specifically more Minute Maid juice; therefore, this endorsement lines up well with existing purchase behavior.

Fast-forward four years to the Rio Games, and Katie Ledecky’s record-shattering Olympic wins put her on every would-be sponsor’s wish list.  Like Missy before her, Katie will postpone turning pro and her swimming for Stanford is sure to tantalize brands waiting to piggyback on her rising star. Based on the beverages that Katie's fans drink, soft drink brands Coke & Pepsi will be a better fit than the juice brands that match Missy’s fans.   Clothing, footwear, personal care, and financial services are also viable sponsor categories, but vetting of specific brands will be needed to align with her fans' preferences.

If any further evidence is needed to highlight the earning potential of Olympic endorsers, Usain Bolt is a case study in riches beyond his collection of gold medals. Since the 2008 Beijing Games, Bolt has lent his name to worldwide brand powerhouses such as Visa, Nippon Airways, Optus Telecom and Gatorade, to the tune of $33 million in the past year. Puma is one of his longest endorsement deals and goes back to 2002; today, Usain Bolt’s fans are three times as likely to wear Puma shoes than the average person, a sign that the deal has been beneficial for both sides. After his third championship Olympics, Bolt will no doubt have even more potential sponsors come knocking on his door; nevertheless, selective partnerships with the brands that his fans already use would be prudent, regardless of how popular he has become.

Athletic endorsements can come from unexpected brands, extending beyond sports apparel and adjacent product categories. Although Ryan Lochte’s Speedo sponsorship has ended, there are numerous partnerships that could be equally successful for him, due to his upscale fan base of young, single women.  Lochte fans buy high-end cosmetics (e.g., OPI, Urban Decay and Lancôme) and fashionable shoe brands (e.g., Coach, Toms & Nine West) at much higher rates than the general public. These advertisers possess an aspirational quality, as do champion swimmers who may not automatically be considered a strong match for make-up or shoes.

Bringing home the gold is the lifelong dream of every Olympic athlete. With the right brand partnerships, their legacy will extend far beyond the five interlocking rings and the 2020 Games in Tokyo.

Celebrity star-spotting is either a national pastime or collective guilty pleasure, depending on how you look at it. Have you ever glanced up when someone nearby exclaimed, “Look! It’s Tiger Woods/Gwen Stefani/ Sean Penn/(insert other famous person here)”?  Or have you tried to figure out which team the TV ad spokesperson plays for? How about peeking at the tabloids while standing in line at the grocery store? We have such a fascination with fame that using celebrities to endorse products is a natural extension of their attention-getting qualities.

Celebrities bring a lot to the table: name recognition, built-in brand equity and millions of consumer fans who want to emulate them. In this election year, endorsements mean appealing to Republicans and Democrats for their votes.  It’s no easy task since the different parties must certainly have different favorites, right? As it turns out, there’s a lot of overlap between top ranking celebrities that cuts across political party lines, according to NPD’s BrandLink. Iconic musical groups The Eagles and Fleetwood Mac have conservative fans, liberal fans, and fans in-between. Ditto for Troy Aikman, Taylor Swift and Leonardo DiCaprio. Celebrity is a meritocracy based on talent, and top-tier status means being popular among both red and blue state voters.

Republicans and Democrats have many favorite celebrities in common, but that doesn’t mean they line up on everything.  Conservative Republicans are more likely than liberal Democrats to choose athletes as celebrities whom they "like very much”, such as NFL quarterback Sam Bradford, pro golfer Jordan Spieth, and football legend Roger Staubach.  Men of both political parties admire athletes, but Republican men are more devout sports fans, elevating a host of other football stars and golfers to the top of the GOP’s celebrities list as well. 

In contrast to Republicans’ athletic roster, Democrats favor an entertainment-skewing mix of musical performers and actors. Liberal-leaning consumers are a younger, diverse group, and their tastes are reflected in favorites including Stephen Colbert, Felicity Huffman, Lisa Ling and Regina Spektor. Appreciation of the arts and different cultures is also evident in a wider variety of top-ranked music (Latin and World music) and film genres (indie and foreign films), especially among Democratic women.

The end-goal of any endorsement is to change minds and prompt fans into action. In the case of politics, candidates use borrowed equity to energize their core fan base and to help convert undecided voters.  In this election year, A-list stars have shown an unprecedented amount of support on the campaign trail and at both parties’ national conventions. But what lies beyond the obvious endorsements by Amy Schumer and Kerry Washington for Hillary vs. Kid Rock and the “Duck Dynasty” Robertson family for Trump? What happens when fans’ political leanings don’t necessarily line up with the celebrities’ appearances and endorsements? This dynamic seems inevitable for major stars like Leonardo DiCaprio and Josh Groban who appeal to both sides of the aisle. Rather than being problematic, it’s a golden opportunity to gain new voters who are fans of the celebrity, but who wouldn’t have necessarily considered that candidate before.

Be it a credit card, a retail store or a political race, a successful endorsement means winning over new fans while keeping the ones you have. Now if only picking a Presidential candidate were so easy.

“Is anything good on TV tonight?” --  it was the daily question in my house growing up as we finished dinner and migrated towards the TV set in the living room. Of course, each of us already knew our favorite show’s schedule – which channel, what time it was on and the critical status: was tonight a new episode (yay!) or just a re-run (boo!)? As these shows faded and were replaced with new ones, we faced a purely First World problem: what are we supposed to watch on TV now?

Today, the search for something good to watch is exponentially more complicated than it once was. Viewers can buy, rent or stream virtually anything they want to see, provided they know where to look. In a world of digital delivery pipelines, it sounds easier than it is. Scouring 200+ cable channels and the multitude of digital video retailers covers only the pre-Netflix world; subscription streaming accounts for over 80 percent of all home video consumed, and the list of new services grows almost every month. Furthermore, SVOD’s mix of content is in constant flux, proving to be both a blessing and a curse for viewers simply looking to be entertained.

With so many possible sources of content, device manufacturers are making search functionality a high priority in their new product development. DVRs may have blazed the trail by searching across cable channels, but smart TV and media player makers now strive for comprehensive source coverage as a new killer app. It’s admittedly trying to hit a moving target to: 1) cover all major rental, buying and streaming retailers, 2) include entertainment-adjacent categories like news or unscripted/reality shows, and 3) future proof against what emerging media content viewers might want, such as virtual reality. Sorting results by price is a standard output (e.g., free and subscription options are listed first, followed by higher priced paid options), vs. availability alerts for new releases that provide valuable intel. It’s no wonder that basic search tools are must-haves, and the more advanced interfaces such as voice control are quickly becoming the new normal.

Comprehensive search results are useful when you know what you want, but what if you’re looking for something new? Recommendations are a natural extension of searchability and viewing history. Lists of titles within the same genres, movies that feature your favorite actors, or what’s popular among your friends are fairly common within a retailer’s own app. Now imagine harnessing that knowledge across all content sources used. Comprehensive recommendations would be that much richer, if they could bridge all of our viewing platforms and shopping outlets.

Coming full circle, search results benefit content marketers too. By mining the data for what viewers are looking for, program creators and licensors can identify the most promising deals and projects in development. Is the popularity of a quirky pilot episode a good omen? When does interest in a niche title reach critical mass for greater investment? Following these clues may increase the odds of producing another Sense8 while avoiding the next Hemlock Grove. And by profiling consumers’ searching vs. actual viewing behavior, we’ll also know more about who they are, how much they spend, and which retailers they prefer. The net result will be an optimized assortment of content that benefits studios and viewers alike.

Finding great shows will soon be as easy as asking for it. Then there’s finding time to watch them all, which is a problem the binge watcher in me is more than happy to have.

I love free stuff — free samples, free trials, and who doesn’t like a free lunch? By reaching out to folks like me, Amazon Prime has engaged droves of online shoppers via free two-day shipping, with a paid annual membership fee; five years ago, the deal got even sweeter with free streaming video content. Prime’s initial assortment of TV shows and classic movies has grown over time to include new release theatrical blockbusters and a roster of critically-acclaimed, award-winning original shows like Transparent and Mozart in the Jungle. With marquee titles like these, now Amazon can attract viewers with its library alone, and by launching a stand-alone streaming service, it’s staking a claim and announcing its status as a bona fide video destination.

Amazon’s new streaming offer — independent of Prime — brings focus to a high profile arena, and squares off toe-to-toe against category leader Netflix. But lest we forget, Amazon isn’t a new video contender either; the e-commerce giant has had its hand in home entertainment for years. Leveraging its online retail heritage, Amazon is second only to Walmart in disc sales. Amazon’s video street cred is also evident in its share of downloads and online rentals, both of which grew last year to rival iTunes’ popularity. When you factor in Prime Video’s stature as the first SVOD platform to offer 4K content, Amazon’s streaming video was destined to be its own line of business.

The $8.99/month price point for all-you-can-eat video feels like a good deal. It’s not only cheaper than Netflix’s most popular $9.99 subscription, it’s a lower cost of entry than Prime and more flexible than a $99 annual commitment. Although the cost of the stand-alone service adds up to $9 more annually (e.g., $108), the single-digit price point is easier for financially constrained households to swallow than a one-time hit of a hundred dollars. In addition, being unbundled from Amazon’s endless marketplace could be a good thing for consumers who are trying to avoid the temptation of impulse shopping.

By appealing to a new market segment, Amazon’s savvy move will expand its SVOD market share, and increase its video transaction business as well. It’s an easy transition from streaming to renting or buying titles when Amazon’s recommendations feature presents them side-by-side. Did you just watch Hunger Games: Mockingjay Part 1? Click here to buy or rent Mockingjay Part 2. Are you a fan of Tom Cruise movies? The Amazon library of titles has them all, in both free streaming or paid options – what you pay is up to you. By bringing more viewers into their ecosystem, Amazon greases the wheels for all of its video business to succeed.

In a world where viewers can get entertainment from virtually anywhere, Amazon has a lot of reasons to keep me coming back, for watching video and a whole lot more. Even if it’s no longer “free.”

This year’s Super Bowl made headlines, not just for the Broncos’ stunning upset over the Panthers, or the superstar-powered halftime show, but for the 3.96 MM people who streamed the Big Game live. Live streaming provides another point of access for cord-cutters and cable subscribers alike; however, the true revolution lies with the potential for fans to self-curate the game. Fans will be the obvious winners in a realm of D-I-Y sports programming, while broadcasters also have a lot to gain when advertisers seek out these highly targeted and engaged audiences.

Taking a step back for a moment, streaming sports has been gradually making its way into our viewing world for a while; Sling’s skinny bundle of channels included ESPN streaming last year, and Super Bowl 50 was actually the fifth time that fans could stream it. On the baseball side, MLB’s streaming app has been widely popular on millions of iPhones/iPads/iTouch and Android phones, and is taking things up a notch with At Bat for Apple TV this spring (which will include an extremely handy split-screen in HD option, among other features). As fans embrace this digital content pipeline, local blackouts will likely continue to frustrate them, and since the streamed content is the same as linear broadcasts, it begs the question: what’s the real benefit of streaming live sports?

What if streaming fans could customize their live feeds? Sports telecasts are already multi-camera affairs and future-proofing by shooting with 5K lenses; fans could choose from hyper-zooming shots, 360-degree camera angles, their favorite sportscaster commentary, etc. at will. Imagine watching the entire game mid-field with the coaches, from in-stadium bleachers, or on the sidelines with the cheerleaders (no judgements…); watching the standard linear feed would always be an option, too. Toggling between different vantage points is a natural fit since the devices that support streaming video – laptops, tablets, smart TVs and smartphones – are ones that people use for multi-tasking already. Other dynamic options such as real-time chat windows would be like a Game Day house party with friends, and perhaps celebrity commentators, real athletes, or coaches could even join the conversation. (NBC’s Winter Youth Olympics coverage from Lillehammer will include streaming and scheduled chats, but as separate, non-integrated events.) Akin to DVD special features, interactive streaming options would elevate the viewing experience, that some diehard fans might even pay more for.

Sporting events with simultaneous contests have most to gain from live streaming camera options. The Olympics, Grand Slam tennis and other multi-venue match-ups do their best to satisfy as many viewers as possible, but it always feels light on the sports I want to see, and too much on those I don’t. (Thanks, Bob Costas – I’m good on coverage of synchronized swimming and weightlifting). NBC’s Olympics live-streamed a few events from the Sochi Winter Games, but by creating a multitude of live streaming channels for the Rio Summer Olympics – perhaps one for every sport – they could inspire a wider variety of fan demographics to give streaming a try.

The opportunity to leverage sports streams can be huge for advertisers. After different sports are up and streaming, brand marketers seeking out specific target audiences can reach them in their native environment. Omega timepieces on the Track & Field channel. Forever 21 on the Gymnastics channel. Coppertone on the Beach Volleyball channel. In addition, brands receive a halo effect from the championship environment, and all the intensity of hard-fought victory that comes with it. Ads on live sports streams are a long-term play as well; interactive viewing leaves digital footprints, informing future targeted ad buys and customized creative campaigns that can change on the fly.

The ultimate payoff for streaming sports will be organic creation of an e-commerce platform. Brands that run ads on live streaming need only enable “click to buy” buttons to close the sale. Want to buy a Broncos jersey and show off your Super Bowl pride? Is there a sale on Djokovic shirts at Uniqlo? Does seeing the Olympics in Rio make you want to visit? Streaming live sports will embody the entire purchase funnel from awareness-to-sale on one screen, without missing a beat.

There’s nothing like a live game to get sports fans’ adrenaline going. But if streaming live sports lives up to its full potential, that’s something everyone can get excited about.

Netflix and Amazon turned up at Sundance with their wallets stuffed, looking to spend. And while they may not have left with everything they wanted, they certainly stormed the party and took some of the best stuff with them, such asLove & Friendship (Amazon) and The Fundamentals of Caring (Netflix). The spending binge highlights an expansion of their respective strategies, moving them beyond original TV-like content, expanding towards a more art-house, niche segment. As a result, movie fans will soon be able to get their indie film fix at home, as easy as binge-watching Mad Men or Downton Abbey.

Sundance bestows status to independent films; simply by being screened at the legendary venue which recognized iconic sex, lies and videotape, American Splendor, and the like; being picked up by a movie studio is a sure path to mass audiences and used to be every filmmaker’s Holy Grail. But now that one-in-three US homes have a streaming subscription, major studios are no longer the only game in town that can offer original movie content. This is clearly good for the industry in terms of the available cash and options available to filmmakers, although this New World is still not necessarily one that everyone is enamored of yet.

A case in point was the sale of the high-profile historical film, The Birth of a Nation, which went to Fox Searchlight. Apparently, filmmaker Nate Turner passed on an additional $2.5MM from Netflix, to guarantee a theatrical distribution for his oeuvre. (let’s pause for a moment: Turner left $2.5MM on the table, whereas the vast majority of acquisitions last year were less than $1MM). There is the perception that Netflix, big as it is, still offers a more limited audience which would net less than the classic studio model and its associated box office revenue. This perception will presumably change over time, and a mix of genres and pipelines — blockbusters in the multiplex, indie films in art house venues and niche films to stream — will fill distinct viewing needs and peacefully coexist for the foreseeable future.

And, of course, for these streaming services, it’s not simply a matter of throwing money down on the table: Netflix, Amazon and Hulu have proven their acquisition savvy by successfully identifying viewers’ favorite TV shows and movies. Netflix and Amazon won multiple Golden Globes and Emmys for original content that has kept their viewers entertained for several years running; snapping up feature-length productions at Sundance is a natural source for their evolving context mix. And as the Globes, Emmys and even Oscars roll in, the value and prestige of being linked to these pipelines will surely grow.

Leading in to the 2015 holiday season, there were few technology categories that provided as much intrigue as drones. On top of drones being a new gadget with all the requisite buzz and interest from early adopters, privacy and security concerns, and an evolving use case have added some extra excitement to the category. FAA guidelines requiring drone owners to register their devices also went into effect on December 21, right in the middle of the holiday shopping season. Questions have loomed whether the pending guidelines would dampen consumer interest in this burgeoning product category, both for the 2015 holiday season and beyond.

Sales results during this holiday and the first weeks of 2016 indicate there was no reason to fret. The NPD Group is set to release drones as an official consumer technology product category in early 2016; however, a preliminary sample of retail sales data from 2015’s final weeks suggest the holiday season was as successful as many had hoped. Unit sales for the five-week period beginning with Black Friday week increased four times over last year’s holiday total, while revenue grew nearly five times. Even more, NPD’s preliminary data indicates 2015 holiday sales were 16 percent higher than the preceding 12 months (Nov ’14 through Oct ’15). Clearly, demand for drones this holiday season was high. NPD’s Weekly Retail Tracking Service data on drone sales also reports post-holiday dollar sales are four times higher than the same period in 2015 – an indication that demand for drones has continued after the holidays.

Despite the sales growth, opinions on drones continue to be mixed, according to a November Omnibus study commissioned by The NPD Group. When asked if they expected to buy a drone for themselves in the next two years, 12 percent of respondents indicated they would. Demographically, consumers 18-34 (17 percent) and 35-44 (18 percent) over-indexed for purchase interest as did those with incomes above $75K (14 percent). By comparison, 50 percent of those polled said they definitely would not buy a drone.

The large portion of “never adopters” are almost certainly impacted by the well-publicized privacy and security concerns around drones, but the device’s current niche-but-evolving use case is also challenging purchase interest. This is why I believe 2016 will be the year the drone market develops distinct segments. The 2016 CES was an indicator of which new subcategories will emerge. DJI’s recent stake in high-end camera company Hasselblad is an effort to appeal to pro-sumer photographers as well as serious hobbyists. The popular Lily will appeal to outdoor enthusiasts and extreme sports lovers looking to document their adventures. And Parrot’s recently-announced Disco is a departure from the quad-copter formfactor in favor of something more resembling an airplane, with its own set of capabilities.

The growing diversification in the market is aimed at finding a drone (and a buyer) for every occasion, which is hugely important for the category. Once the buzz around drones subsides, consumers will need practical reasons beyond simple curiosity to invest in these products. We’ve already seen the transformation of drones from interesting tech conference sideshow to bonafide market force. Now, drone makers must uncover the killer app (or apps) that can make these products a must-have for more households.

Like many gamers, when the new Xbox One and Playstation 4 became available at the end of 2013, I was excited to add another system to my household.  It is now eight months later and I can report that although I enjoy the new platforms I am still waiting for that defining game.  So when I look at the latest sales figures it does not surprise me to see that the tie ratio of games sold to systems is down from the previous console launches.

On average, Canadians so far have purchased approximately three games for every PS4 or Xbox One sold; that number is 11 percent less than when the PS3 and Xbox 360 launched.  And while digital is growing in importance, the lack of truly compelling content at this time in either digital or physical format is what’s at play. This is a short-term issue seen during new platform launches, but it will be resolved in time for the holidays.

Despite this drop in average number of games being sold for each system, the sales results for the latest consoles remain very strong eight months after launch.  Comparing the launch this past year with the previous launch of the Xbox 360 and PS3, console sales in Canada have never been stronger.  Combined these two systems have outsold their predecessors during launch by 127 percent.  Along with strong console sales, software sales have doubled versus previous launches, with sales up 102 percent.  Accessory sales, although up 29 percent, remain the softest area of growth for these new systems.  So despite the overall Video Game market showing negative growth these past eight months, the latest consoles are delivering very strong results and pushing the market to positive revenue results overall.

As noted in the title, there remains more opportunity for this market, and with the announced titles planned for release over the next six months, it seems likely that the market will build off this early growth momentum. There are potential areas of growth, including  increasing the tie ratio between games and consoles, which will improve as platform libraries (games) grow, and accessory sales, which will depend on a myriad of factors, including the continued push towards new market opportunities (e.g., toy-based games).  So far, neither have been a focus from either the PS4 or Xbox One, but we can expect to see momentum on all fronts in the near future.