It’s been a very long time since you had to sit in the dark with strangers to watch a movie (not that there’s anything wrong with that.) Today’s audience is everywhere -- in every room, on every device, on every platform. Whether streaming or downloading, buying or renting, in the theater or on the couch, big screen or phone screen, consumers can watch entertainment anywhere and anytime.
It’s true that there’s no business like show business. It’s also true there’s no business like show business for observing the disruption of digital technology, Web culture and the rise of Millennials.
The NPD Group offers insights and solutions that equip studios, content distributors, retailers, financial analysts, entertainment marketers, talent management companies, and others in the entertainment industry to stay on top of shifting tastes and trends.
NPD has tracked consumers’ entertainment behavior for more than 10 years, leading to unmatched industry perspective.
BrandLink℠ provides a fact-based rationale for creating highly targeted marketing programs around sponsorships and endorsements. Even when there is an obvious alignment between an entertainment category and a product category – such as football players endorsing a fast food chain or a popular beverage sponsoring a music tour– there can be big differences in how individual celebrities align with specific brands. The BrandLink service identifies individual consumers’ preferences – the athletes, TV personalities, comedians, and musicians they are fans of and the brands they use, stores and websites they visit, movies and TV shows they watch, and games they play. It reveals the celebrity best positioned to meet a brand’s specific marketing objectives, and then informs activation decisions that will unlock the full potential of that investment.
Entertainment Trends in America
Get a wide-angle view across entertainment categories, with Entertainment Trends in America’s in-depth analysis of the music, film/video, and games industries. This series of reports, combined with our industry-leading consumer and point-of-sale information, delivers a clear understanding of the many entertainment options competing for consumers’ time, attention, and wallet share. The reports are based on a multi-part consumer study conducted twice a year to explore attitudes and behaviors. They can help your company identify who your customers are, examine the entertainment options they are choosing, and evaluate potential opportunities and risks for your business.
Look to the only source that constantly monitors the home video market for reliable market research information on market drivers and consumer behavior. VideoWatch® covers purchases of new and previously-viewed titles, store-based and subscription-based rental, pay-per-view (PPV), video-on-demand (VOD), paid digital downloads, and free streaming.
Gain perspective into the rapidly-growing digital video sector with this comprehensive service. VideoWatch Digital provides an in-depth look at how consumers are interacting with both paid and free digital movies and TV shows. This service measures consumer choice for streaming and downloading digitally on an ongoing basis, including where people go and which devices they use to stream and watch digital video.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
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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>
Activewear Sales Seeing Dip in Athletic Specialty/Sporting Goods Channel, As Lines Blur Between Technical and Lifestyle ProductsMore 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 NPD Group Finds Art of Matching the Right Athletes With the Right Brands a Challenge for MarketersChoosing 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.
49 Million U.S. Internet Homes Now Own a Connected TV or Attached Content Device, According to The NPD GroupMore 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.
10 Ways Younger and Older Millennials Shop Differently
The retail world is obsessed with Millennials.
It wouldn’t be a normal day if newsletters, tweets, and the media didn’t overflow with headlines on the latest Millennial trend, how to “harness” their alleged power, or how to reach this malleable and unpredictable segment.
Who are these Millennials? Do a quick Google search, and you’ll learn they’re foodies. Social media savants. Selfie experts. Experience seekers. Value hunters. Convenience junkies. Savvy shoppers. They’re “authentic.”
In demographic terms, they’re people between the ages of 18 and 34 who reached young adulthood around the year 2000.
But Millennials don’t like to be stereotyped as Millennials. We get it, Ryan Seacrest—they’re tired of being generalized into a broad demographic box and find the label patronizing. They just want to be treated as unique individuals.
When it comes to the wide-spanning age bracket, they do have a point—the difference between life in your late teens and life in your early 30s is pretty substantial. Do 18-year-old you and 34-year-old you want the same things, behave in the same way, or buy the same stuff?
With this in mind, we decided to divide the group into two smaller segments for study: younger and older Millennials. We set out to learn how these groups differ, both attitudinally and behaviorally, in their retail choices. We learned a lot, like the fact that older Millennials over-index in loyalty apps. And younger Millennials shop more at department stores.
If you’re a retailer or manufacturer looking to better understand the complexities of these highly-coveted sub-segments across the retail and foodservice spaces,
The Gen Y Gold Rush
Before we dive into retail specifics, let’s review an economic reality to set the context: U.S. Millennials haven’t had it so easy. Coming of age during the Great Recession, 13.8 percent of those 18-29 are unemployed or out of the workforce, far above the national jobless rate of 5.1 percent. And they’re a “boomerang” generation—33 percent stay at home with their families and fewer live independently. (Who can blame them? Seven out of 10 college grads from 2014 have a student loan, owing an average of $28,950 per borrower.)
But debt and other deterrents haven’t kept Millennials from buying things.
Any obsession with the Millennial demographic—also known as Gen Y—is with good reason. U.S. Millennials outnumber Baby Boomers by nearly 10 percent, surpassing them as the nation’s largest living generation in 2015, according to the U.S. Census Bureau. They’re estimated to reach $1.4 trillion in annual spending by 2020—roughly one-third of all retail spending. So retailers and manufacturers need Gen Y’s share of wallet to increase their market share. And this dependence will only intensify as Boomers continue to age and the Millennial segment gains purchasing power. Frankly, if you’re a retailer who’s not focused on this budding segment, we’re seriously concerned. (Please call us immediately and we’ll help.)
Given that Millennials are such an expansive, diverse group, our Chief Industry Analyst Marshal Cohen reminds us that there are many ways to divide up this set for study; segmentation by age is just one way to showcase their differentiated spending. But make no mistake about it: age really does matter. As consumers navigate through shifts in life stage, it reflects back in their purchasing behavior.
When we divide the group into two segments (ages 18-24 and 25-34), there are already some major demographic differences to note. For one, older Millennials are more educated and have a higher income, shown by data collected by our partner, CivicScience. But with more than one-third of 18- to 24-year-olds still in college, they can’t be expected to have the same level of education or earning power. Older Millennials are less racially diverse and are primarily white (74 percent compared to 68 percent of young Millennials). A greater percentage of young Gen Yers are single/never married (80 percent compared to 44 percent of older Millennials), fewer are married (only 10 percent compared to 40 percent of older Millennials), and fewer parent a child (10 percent compared to 40 percent of the old Gen Y segment).
The two groups think and behave differently, too. Younger Millennials are more optimistic about the state of our economy. They’re less likely than their older counterparts to think Donald Trump would make a good president, and more likely to see the new “Star Wars” movie. Younger Millennials are more likely to applaud Bernie Sanders’ performance in the first Democratic debate. And they eat granola with a higher frequency than their elder Millennial brethren.
So how do these differences play out on the retail floor? Here are 10 ways the groups differ in their shopping behavior:
1. Young Gen Y Specialize in Beauty
We studied the receipts of 8,766 Millennials through our Checkout TrackingSM service, following the purchases they made during the first half of 2015, both online and offline. This revealed younger Millennials devoted a greater share of spend to specialty beauty retailers compared to the total Gen Y population. The younger set significantly over-indexed at retailers like Lush, meaning they are more likely than the senior Gen Y group to visit a specialty beauty retailer when they need new concealer or mascara.
But there were also some “neutral” beauty brands that earned consistent share of wallet across the Millennial age bracket. Both Gen Y groups devoted about 20 percent share of beauty spend to Bath & Body Works and 22 percent share to Sephora. The only specialty beauty retailers where older Millennials significantly over-indexed compared to their younger comrades were The Body Shop and bareMinerals.
But it’s not all about specialty shops when it comes to cosmetics. In an online poll of 15,031 U.S. adults conducted from January 2014 through January 2015 through our partner CivicScience, we asked respondents where they buy most of their makeup and cosmetics. The result? Millennials do the majority of this shopping (49 percent) at superstores like Walmart, Target, and Costco—a greater share compared to that of the total U.S. adult population (45 percent). And younger Millennials demonstrate a slightly greater affinity for superstore makeup than older Millennials.
When it comes to how Millennials shop for beauty products, their purchasing behavior is pretty consistent throughout the segment, but there are also some differences. Our Shopper Engagement survey fielded in August 2015 showed Millennials old and young are equally likely to browse in store and buy in store (58 percent). Younger Millennials are more likely than older Millennials to browse and buy online (20 percent vs. 17 percent), less likely to browse online and buy in store (14 percent vs. 15 percent), and less likely to browse in store and buy online (8 percent vs. 10 percent).
"With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending"
2. Young Millennials Shop More Specialty Apparel
The Millennial segments demonstrated the biggest discrepancy when we looked at share of wallet devoted to specialty apparel stores. Young Gen Yers like shopping in specialty stores for specific items, devoting 3.2 percent share of wallet to this retail channel, compared to older Millennials’ 2.1 percent share and the total adult population’s 1.9 percent share, shown by Checkout Tracking receipt data.
Marshal Cohen thinks reaching younger Millennials requires laser-like focus. “With so many retailers and brands trying to court this segment, it becomes very competitive and challenging to win share of younger Millennials’ discretionary, hard-to-come-by spending”, he explains. Millennials want to shop and play at places that market their products directly to them. If they feel you’re “for real,” or in other words, not only including them, but genuinely speaking directly to them—they will be more inclined to shop with you.
Specialty fashion retailers are the perfect example. We took a deep dive into data on some of these top retailers to see at which specific retailers younger Millennials over-indexed compared to more senior Millennials over a 12-month period. One look at the over-indexing stores on this list, and you’ll see just how these specialty stores fared with the younger Millennial.
Here we see very clearly how young Gen Yers spend a significantly lower share of their apparel spend at children’s retailers (Carter’s and The Children’s Place) compared to the older Millennial segment. The data reflects young Gen Yers’ preference for stores like Hollister and American Eagle over places like Ann Taylor and Banana Republic.
What we found particularly significant was the fact that two of the most neutral apparel retailers—Lululemon and The North Face—earned similar wallet share among Millennials of all ages, demonstrating activewear’s ability to transcend ages 18 to 34.
But Department Stores Aren’t Dead
Given younger Millennials’ affinity for specialty apparel retailers, perhaps we can understand Macy’s decision to mimic this specialty/boutique feel by opening a basement floor dedicated entirely to the younger consumer (Gen Z and young Millennials), only showcasing the brands most relevant to this age group.
But it is important to note that across the entire channel, Millennials of all ages devote a greater share of wallet to department store spend than the rest of the U.S. adult population. And younger Millennials are also more likely than older Millennials to have shopped at department stores. While the younger group is more likely to have shopped at Nordstrom, the older group is more likely to have shopped at Sears.
Interestingly, while younger and older Millennials differ in their likelihood to have shopped at Nordstrom (26 percent vs. 15 percent), the likelihood of the groups to have shopped at Nordstrom Rack, the fashion retailer’s off-price subsidiary, is not as polarizing (25 percent versus 22 percent respectively). Though less significant, younger Millennials are slightly more likely to have shopped at Marshall’s, while both age groups are equally likely to have shopped at TJMaxx.
3. Younger Millennials Are Sportier
Though activewear share of spend is consistent across the Millennial spectrum, budding Millennials are more likely than older ones to have shopped at sporting goods stores (29 percent vs. 20 percent reported to have shopped at one in the past year). The differences were significantly pronounced at REI (49 vs. 16 percent). There were also marked differences at footwear retailers Nike (40 vs. 19 percent) and Finish Line (32 vs. 19 percent).
So does this mean younger Millennials are more active than their older counterparts? Our Sports Industry Analyst Matt Powell shed light on this question. “I’ve been talking a lot about viewing the generational changes on a spectrum (from the oldest Boomer to the youngest Gen Zer), rather than as distinct and dramatic changes,” he explained. For example, Boomers are mostly white, conservative, less technically inclined, lavish, and not particularly focused on health or fitness. In contrast, Gen Z is less white, liberal, tech-reliant, frugal, and very health/fitness focused. And Millennials fit somewhere in between on this spectrum.
“So when we think of changes moving along a spectrum over time, it is logical that younger Millennials behave somewhat differently than older ones, and in this case—have a greater focus on fitness and health,” Matt explains.
That’s not to mention that as older Millennials buy homes and start families, they spend less money on themselves (and less on things like sports equipment), while the younger Gen Yers do not yet have those financial obligations.
4. Younger Millennials Eat Healthier, Cook Less, and Shop Wholesale
When it comes to the food and beverages they order, younger Millennials are more likely than older Millennials to look for benefits they can obtain by eating healthier, seeking items that provide energy, are filling, reduce stress, and build muscle. These are messaging opportunities for building a younger Millennial customer base.
In addition, young Gen Yers are more adventurous than older generations in their food choices, with 47 percent of younger versus 40 percent of older Millennials claiming to choose something new (compared to only 34 percent or less for older generations). And younger Millennials have other considerations when trying something new. For example, convenience is at the top of the list. Items that are quick to order, prepare, and consume with easy portability and little mess satisfy this need.
An analysis of data from CREST®, our flagship restaurant and foodservice information service, found the Millennial segment experienced the greatest decline in restaurant visits of any generation from 2007 to 2014. This decline was greatest among the older Millennial segment (the group more likely to have kids under age 13 in the household). And if you’ve ever been responsible for a child at a restaurant who is having a meltdown or making a concoction out the table condiments, you get it. Not to mention the impact of having more mouths to feed; the relatively cheaper expense of eating at home was the primary reason for the decline in visits among older Millennials. Healthy eating concerns also played an integral role in the decision to eat at home.
Older Millennials are also more into cooking than are younger Millennials, with just over half of the older segment saying they love or like to cook. It may be easier to attract younger Millennials back to restaurants because they are not as tied to cooking at home.
Last month Whole Foods revealed it will open a line of grocery stores specifically targeting the Millennial shopper. These smaller stores will offer curated, limited selections of products at value prices. While research indicates Millennials do like to specialize, our Checkout Tracking receipt data indicates an affinity for wholesale clubs across this segment. When it comes to at-home food purchasing, younger and older Millennials devoted the greatest share of wallet to wholesale clubs Costco and Sam’s Club, and were similarly likely to have shopped at each grocer. Younger Millennials over-indexed at BJ’s and Publix, but under-indexed at Safeway.
"When it comes to accessories, younger Millennials are not the robust market one would think they are..."
5. Young Gen Yers Devote Less Spend to Accessories
Accessories are growing fastest among the Millennial segment. These consumers are responsible for the greatest share of the category’s purchases, with spending up 15 percent from one year ago. Younger Millennials, however, under-index (compared to total Millennials) in the share of wallet they devote to this category. We found this stat surprising, so we asked our Chief Industry Analyst, Marshal Cohen for his thoughts on the trend.
“When it comes to accessories, younger Millennials are not the robust market one would think they are,” Marshal explains. “Traditional thinking has younger Millennials spending more on accessories, as they tend to be more affordably priced than apparel items. But with less discretionary funds, young Millennials need to be very picky about what and when they buy. Spending across a wider scope of ‘necessities’ like phones, data plans, and even food competes for young Millennial spending on experiences—and that means things like accessories will fall short on the priority list for spending.”
6. Older Millennials Use More Loyalty Apps
Older Millennials are more likely than younger Millennials to be a member of a retailer’s loyalty program. But one surprising trend is that older Millennials are more likely than tech-reliant younger Millennials to have at least one retailer’s app downloaded on their mobile device (48 percent vs. 33 percent). The older group is also more likely to frequently use the downloaded app (46 percent often use their app to browse, look for product information, or shop compared to 38 percent of young Millennials). Older Gen Yers substantially over-indexed for use of mobile apps from Target, Walmart, CVS, Dollar General, eBay, Rite-Aid, Best Buy, Gamestop, and Costco.
7. Millennial Youth Need Less Stuff and Shop Less in Store
Younger Millennials are more likely than older Millennials (28 percent vs. 23 percent) to say they have shopped at brick-and-mortar stores less often than last year, primarily because they don’t need to buy as much as they used to (41 percent). This is also a factor of Millennials’ attraction to experiences, and their desire to do more and buy less.
Older Millennials are more likely than younger Millennials to shop less at brick-and-mortars because they cannot afford to shop as much as they used to (32 percent vs. 25 percent)—perhaps a reflection of the financial demands of parenting.
Both groups are similarly likely to have shopped at Amazon and to be members of their loyalty program, though younger Millennials are more likely to be familiar with Amazon as a place to buy consumer electronics. Older Millennials are more likely to have shopped at direct mail/e-commerce sites like eBay.
When it comes to shopping for apparel, younger Millennials are more likely than older Millennials to browse in store and buy in store (62 percent vs. 51 percent), but less likely to browse online and then buy in store (10 percent vs. 16 percent). Younger Millennials are also less likely than older ones to browse in store and buy online (8 percent vs. 14 percent).
8. Younger Gen Yers Are More Adam Levine, Older Are More Metallica
Our BrandLink® solution reports that if you’re looking for a celebrity endorsement that would appeal to Millennials of all ages, B.o.B. and JT are your guys (that’s Bobby Ray Simmons, Jr. and Justin Timberlake to all you non-Millennials). Both would be good fits to target younger Millennials (index 225 and 132 respectively) and older Millennials (index 167 and 137 respectively).
If you want to home in on younger Millennials, Adam Levine and Daniel Radcliffe are good choices (index 138 and 134 respectively), but they could miss the mark for older Millennials.
Only trying to target older Gen Y consumers? Metallica and Guns N’ Roses would fit the bill (index 130 and 121 respectively), but might not have the same recognition, let alone impact, with young Gen Yers.
9. Older Millennials Buy More Kids’ Stuff
Younger Millennials under-indexed compared to the total Millennial segment in child-related categories: baby products and toys. Specifically, older Millennials are more likely to have shopped at Babies R Us, The Children’s Place, Toys R Us, and Party City. This isn’t surprising, since the 18-24 segment is less likely than the 25-34 segment to parent a child. And in today’s day and age, baby photos don’t really start to take over your Facebook or Instagram feeds until you hit your mid-to-late-20s.
The same trend applies to pet products: older gen Yers are more likely than Millennial youngsters to have shopped at pet stores like PetSmart and Petco.
10. Older Millennials Have More Home-Related Expenses
We know it might sound shocking, but younger Millennials also under-indexed in home improvement, appliances, tools, and home textile purchases. Older Millennials are more likely to have shopped at home hardware stores like Home Depot and Lowe’s in addition to home specialty stores like Bed Bath and Beyond, Crate and Barrel, West Elm, and Pottery Barn. But, really—no surprises here. What 20-year-old do you know who is remodeling her new home, buying a fancy KitchenAid, investing in a state-of-the-art power saw, or ordering a new line of linens? Let’s face it, whether you’re in school or starting your first job, it’s all about scrounging up repurposed furniture from older family and friends or simply sticking with mom and dad for a few more years until you get your feet on the ground. And when young Millennials finally do uproot themselves, typically this means moving to an urban environment where there are more jobs and inhabiting smaller, rented, and/or shared homes that require fewer furniture expenses.
Older and Younger Millennials: Two Distinct Segments
In the world of market research, people aged 18-34 are typically grouped into one giant segment for study. But they do not share the same experiences, think, or act the same. Half the group grew up on Britney Spears, the other on Justin Bieber. Some grew up with Facebook in middle school, while the rest didn’t create an account until after having their first child. Moreover, this 16-year span represents a pivotal coming-of-age period, and the differences between the oldest and youngest Millennial can be great, as evidenced by our top 10 list. It’s time to start treating these segments as two distinct groups, to better get to know them and to speak to them directly if we want to earn their precious spending power.
Insights and Opinions from our Analysts and Experts
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.
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