Q4 2017 THE NIELSEN LOCAL WATCH REPORT A FOCUS ON STREAMING TRENDS IN OUR CITIES Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved.2 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 EVEN STREAMERS CANT RESIST THE ALLURE OF TRADITIONAL TV Did you know that the average streaming adult aged 25-54 consumes two hours and 28 minutes of over-the-top (OTT) content per day? Even if you did know, you probably didnt realize how much this demo still relies on traditional TV. In fact, in a typical day during November 2017, 93% of streamers watched traditional TV. Forty-seven percent (47%) of those streamers watched TV only, 46% were reached by a mix of traditional TV and streaming, and 7% streamed exclusively. Technology has officially taken over our living rooms. The average American now has more ways than ever before to view content. First, it was the exciting entry of VHS into the world. Then came video game consoles, DVD players and the life-changing DVR. Soon after, small screens became a thing. And now, were knee deep in TV streaming devices. As of November 2017, over 65 million U.S. homes own an enabled device capable of streaming content to the TV. Thats a big number, and it continues to grow. While 59% of U.S. homes are streaming enabled, the story varies by market. With “OTT-savvy” homes more likely to be in urban areas, mid-size markets are showing more growth. San Diego is currently winning the race, with 71% of homes having access to an enabled streaming device. In this edition of Local Watch, we examine over-the-top trends in our cities and how its redefining the media landscape. With todays streamer transcending a broad spectrum of geographies, generations and household types, there is a unique opportunity to reach audiences in new ways that can drive incremental reach. Further evidence of TVs stronghold reveals itself when examining streamer segments. Traditional programming shows impressive resilience in todays digital age. Even the heaviest of streamers cant seem to shake broadcast viewing. A true story in Nielsen data, reaffirming the powerful reach and relevance of local media in our daily lives. JUSTIN JUSTIN LAPORTE VP, AUDIENCE INSIGHTS3 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING TRENDS Q4 20174 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 65.3 MILLION US HOMES HAVE AN INTERNET ENABLED DEVICE CAPABLE OF STREAMING CONTENT TO THE TV, WHICH INCLUDES VIDEO GAME CONSOLES, SMART TVS OR INTERNET DEVICES SUCH AS ROKU, APPLE TV, GOOGLE CHROMECAST OR AMAZON FIRE TV. AS OF NOVEMBER 2017, THIS GROUP ACCOUNTS FOR 59% PERCENT OF THE TOTAL POPULATION AND CONTINUES TO GROW EACH YEAR. 59% Source: Nielsen NPower, Total US Households, Excludes BBO Homes, November 2017.5 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 GROWTH ACROSS ALL MARKET TYPES PERCENT OF HOMES THAT OWN ENABLED STREAMING DEVICES Nielsen Npower, November 2017, TV Households (excludes BBO homes), Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV). Remainder Market group includes Code Reader and Diary markets. WHILE PENETRATION OF STREAMING DEVICES IS HIGHEST IN URBAN AREAS, ALL MARKET SIZES SHOW GROWTH, WITH MID-SIZE MARKETS INCREASING MOST OVER LAST NOVEMBER LPM MARKETS SET METER MARKETS REMAINDER MARKETS +6.2% +6.7% +4.8% 2017 2016 57 .3% 63.5% 51.6% 58.3% 45.0% 49.8%6 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING DEVICES IN LPM MARKETS PERCENT OF HOMES THAT OWN AN ENABLED STREAMING DEVICE 0:39 Los Angeles Washington, DC San Francisco New York Denver Dallas Boston Houston Portland Phoenix Miami Charlotte Detroit Cleveland Atlanta Seattle Chicago Sacramento Orlando Philadelphia Baltimore Minneapolis Tampa St. Louis Pittsburgh 70% 69% 68% 68% 68% 66% 65% 65% 64% 64% 64% 63% 63% 63% 63% 62% 62% 61% 61% 61% 60% 60% 59% 59% 55% Source: Nielsen Npower, November 2017, TV Households (excludes BBO homes), Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV).7 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING DEVICES IN SET METER MARKETS PERCENT OF HOMES THAT OWN AN ENABLED STREAMING DEVICE Source: Nielsen Npower, November 2017, TV Households (excludes BBO homes), Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV). San Diego Salt Lake City Jacksonville Columbus Norfolk Cincinnati New Orleans Indianapolis Dayton Bualo Nashville Albuquerque Tulsa Greenville Las Vegas Austin Providence Hartford Raleigh San Antonio Milwaukee Oklahoma City Knoxville Greensboro Memphis 71% Ft. Myers West Palm Beach Kansas City Richmond Louisville Birmingham 69% 66% 66% 65% 64% 64% 63% 62% 61% 61% 61% 61% 60% 60% 60% 60% 60% 59% 57% 57% 56% 55% 54% 54% 53% 53% 52% 52% 52% 43%8 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING DEVICES ATTRACT A YOUNG, AFFLUENT AUDIENCE STREAMING DEVICE HOUSEHOLD PROFILE White Hispanic Black Asian Other 66% 15% 13% 4% 2% RACE/ETHNICITY INCOME <40K 40-100K 100K+ 01 02 03 04 05 06 0 15 5 25 10 22% 25 25 Total US Enabled Device 30% 56% 48% 43% 22% Total US Enabled Device Category 4 02 04 06 08 0 100 5 19.9% 40 25 25 Category A Category B Category C Category D 44.1% 35.9% 32% MORE LIKELY TO HAVE CHILDREN 17% MORE LIKELY TO HAVE A COLLEGE DEGREE Under 35 Age 35-54 Age 55+ INDEX 134 INDEX 123 INDEX 73 Source: Nielsen Npower, LPM Market Average, November 2017, TV Households (excludes BBO homes), Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV). White Hispanic Black Asian Other INDEX 98 INDEX 111 INDEX 95 INDEX 126 INDEX 91 100K+ 40-100K <40K9 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 A MONTH IN THE LIFE MONTHLY REACH AND FREQUENCY AMONG STREAMING DEVICE USERS HOW MANY HOW OFTEN HOW LONG TOTAL US LPM MARKETS SET METER MARKETS REMAINDER MARKETS How Many: Monthly reach percent of streamed content among streaming enabled homes; How Often: Number of days of usage in the month; How Long: Daily hours: minutes spent watching streamed content on the TV. Source: Nielsen Npower, November local measurement, Persons 25-54, Excludes BBO Homes, Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV). Remainder Market group includes Code Reader and Diary markets. 2017 2016 80% 71% 79% 71% 87% 76% 77% 68% 12 10 11 10 13 10 12 11 2:28 2:38 2:34 2:37 2:10 2:18 2:52 3:0410 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING VARIES BY CHARACTERISTIC MONTHLY REACH AND FREQUENCY AMONG STREAMING DEVICE USERS How Many: Monthly reach percent of streamed content among streaming enabled homes; How Often: Number of days of usage in the month; How Long: Daily hours: minutes spent watching streamed content on the TV. Source: Nielsen Npower, November 2017, Persons 25-54, Excludes BBO Homes, Streaming Device Home = Access to Internet Enabled Game Console, Smart TV or Internet Connected Device (Roku, Google Chromecast, Amazon Fire or Apple TV). HOW MANY HOW OFTEN HOW LONG BROADCAST ONLY CABLE BLACK ASIAN OTHER HISPANIC WHITE WITH CHILDREN WITHOUT CHILDREN INCOME <40K INCOME 40-100K INCOME 100K+ 89% 78% 81% 78% 81% 81% 80% 82% 79% 79% 80% 79% 15 11 11 11 11 12 12 12 11 12 11 12 3:11 2:18 3:10 2:07 2:29 2:28 2:22 2:20 2:39 3:15 2:33 1:5411 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING DEVICE USAGE AMONG USERS IN LPM MARKETS How Many How Often How Long Market Nov-16 Nov-17 Nov-16 Nov-17 Nov-16 Nov-17 LPM Average 71.3% 78.6% 10 11 2:37 2:34 Atlanta 73.5% 79.8% 9 11 2:40 2:49 Baltimore 70.3% 85.1% 9 11 2:03 2:34 Boston 68.4% 80.6% 10 12 2:29 2:14 Charlotte 63.3% 76.5% 11 13 3:16 2:45 Chicago 68.2% 80.7% 9 12 2:36 2:13 Cleveland 70.5% 83.8% 10 13 2:30 2:15 Dallas 72.0% 82.9% 9 12 2:59 2:53 Denver 73.7% 82.7% 11 12 2:53 2:23 Detroit 70.5% 80.2% 10 11 2:19 2:22 Houston 72.6% 74.5% 10 12 2:46 2:42 Los Angeles 70.3% 79.4% 9 11 2:37 2:26 Miami 68.4% 76.6% 9 11 2:58 2:30 Minneapolis 73.7% 84.0% 11 12 2:30 2:38 New York 67.0% 75.1% 9 11 2:29 2:25 Orlando 81.3% 80.9% 9 12 2:25 2:27 Philadelphia 69.2% 77.6% 9 12 2:24 2:33 Phoenix 74.4% 81.7% 10 11 2:36 2:37 Pittsburgh 66.8% 76.4% 9 11 2:38 2:09 Portland 74.1% 83.4% 9 12 2:30 2:15 Sacramento 74.4% 83.9% 9 11 2:13 1:54 San Francisco 68.1% 77.1% 9 10 2:22 2:08 Seattle 78.3% 87.7% 10 11 2:31 2:05 St. Louis 68.6% 77.4% 11 12 3:05 2:51 Tampa 67.6% 83.6% 9 12 2:23 2:12 Washington, DC 67.1% 77.7% 10 11 2:37 2:34 How Many: Monthly reach percent of streamed content among streaming enabled homes; How Often: Number of days of usage in the month; How Long: Daily hours: minutes spent watching streamed content on the TV. Source: Nielsen Npower, Persons 25-54, Excludes BBO Homes MARKET WITH HIGHEST STREAMING USER REACH IN NOV17 MARKET WITH GREATEST INCREASE IN USER REACH OVER NOV16 MARKET WITH HIGHEST TIME SPENT STREAMING IN NOV17 SEATTLE TAMPA DALLAS12 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMING DEVICE USAGE AMONG USERS IN SET METER MARKETS How Many How Often How Long Market Nov-16 Nov-17 Nov-16 Nov-17 Nov-16 Nov-17 Set Meter Average 75.9% 86.6% 10 13 2:18 2:10 Albuquerque 73.9% 85.0% 12 13 2:22 2:34 Austin 66.5% 85.9% 11 14 2:15 2:27 Birmingham 60.7% 83.6% 9 12 2:39 2:15 Buffalo 58.5% 89.5% 9 13 2:26 2:04 Cincinatti 80.9% 89.8% 9 13 2:18 2:17 Columbus, OH 69.9% 89.5% 10 13 2:43 2:06 Dayton 67.6% 91.6% 9 13 2:43 2:13 FT. Myers 75.0% 88.8% 8 12 2:13 1:44 Greensboro 75.8% 88.2% 9 13 2:31 2:23 Greenville 69.9% 81.7% 10 12 2:40 2:29 Hartford 65.5% 83.8% 8 12 1:44 1:38 Indianapolis 75.5% 86.6% 10 14 2:15 2:27 Jacksonville 64.7% 79.9% 9 13 2:16 2:19 Kansas City 68.6% 86.6% 9 13 2:09 2:12 Knoxville 64.0% 81.4% 10 12 2:01 1:56 Las Vegas 68.1% 88.9% 11 12 2:26 2:11 Lousiville 71.2% 86.2% 10 13 2:15 2:07 Memphis 63.4% 82.9% 8 13 2:12 2:26 Milwaukee 76.5% 88.9% 10 13 2:11 2:09 Nashville 77.6% 87.2% 11 13 2:51 2:25 New Orleans 69.1% 87.8% 10 12 2:45 2:16 Norfolk 72.4% 87.4% 9 14 2:15 2:20 Oklahoma City 67.9% 85.7% 11 13 2:49 2:15 Providence 67.5% 92.1% 9 12 2:21 2:19 Raleigh 67.4% 85.9% 11 13 2:27 2:25 Richmond 68.1% 87.7% 9 12 2:07 1:59 Salt Lake City 75.4% 86.2% 10 13 2:05 1:47 San Antonio 60.0% 84.7% 9 12 2:07 2:21 San Diego 75.1% 90.0% 9 13 1:45 1:37 Tusla 74.4% 87.5% 8 12 2:00 1:59 West Palm Beach 60.3% 80.2% 8 11 1:45 1:53 How Many: Monthly reach percent of streamed content among streaming enabled homes; How Often: Number of days of usage in the month; How Long: Daily hours: minutes spent watching streamed content on the TV. Source: Nielsen Npower, Persons 25-54, Excludes BBO Homes MARKET WITH HIGHEST STREAMING USER REACH IN NOV17 MARKET WITH GREATEST INCREASE IN USER REACH OVER NOV16 MARKET WITH HIGHEST TIME SPENT STREAMING IN NOV17 PROVIDENCE BUFFALO ALBUQUERQUE13 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 STREAMERS SHOW STRONG ENGAGEMENT WITH TRADITIONAL TV Despite the growth of streaming device adoption, its proving hard to unseat traditional TV (live and time-shifting) as the dominant medium. Even the average streamer is spending the majority of their time with traditional television. For the purposes of this analysis, a “streamer” is defined as adults 25-54 who used a streaming device during November 2017. In an average day during this period, 93% of streamers were reached by traditional cable or broadcast programming. This group is almost evenly split among those who watched only TV (47%) and those who used a combination of TV and a streaming device (46%). Only 7% of streamers exclusively streamed content to the TV set in a typical day. AVERAGE DAILY REACH AMONG STREAMING ADULTS 25-54 Source: Nielsen Npower, 25 LPM Market Average, Average daily reach among P25-54, Excludes BBO Homes, November 2017 93% OF STREAMERS ARE REACHED BY TRADITIONAL TV IN AN AVERAGE DAY TV Only TV and Streaming Device14 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 DAILY TV USAGE AMONG STREAMERS IN LPM MARKETS Source: Nielsen NPower, Average Daily Reach Among Persons 25-54, Excludes BBO Homes, November 2017 Detroit Baltimore New York Atlanta Pittsburgh Washington, DC Phoenix Boston Los Angeles San Francisco Philadelphia Chicago St.Louis Seattle Houston Sacramento Dallas Miami Charlotte Tampa Cleveland Minneapolis Denver Orlando Portland TV Only TV and Streaming Device Streaming Device Only 53% 39% 8% 51% 42% 7% 50% 44% 5% 5% 6% 5% 6% 7% 5% 7% 5% 4% 5% 10% 6% 9% 6% 7% 4% 10% 8% 12% 6% 12% 12% 50% 50% 50% 48% 48% 48% 48% 48% 47% 46% 46% 46% 46% 45% 45% 44% 44% 44% 43% 43% 42% 41% 45% 44% 45% 46% 45% 47% 45% 47% 49% 49% 43% 48% 45% 48% 48% 52% 47% 48% 45% 52% 45% 46%15 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 DAILY TV USAGE AMONG STREAMERS IN SET METER MARKETS Source: Nielsen NPower, Average Daily Reach Among Persons 25-54, Excludes BBO Homes, November 2017 Knoxville Greenville West Palm Beach Birmingham New Orleans Richmond Ft. Myers San Antonio Bualo Tulsa Nashville Jacksonville Las Vegas Providence Dayton Louisville Hartford Milwaukee Columbus, OH Memphis Raleigh Albuquerque Oklahoma City Greensboro Norfolk San Diego Kansas City Cincinnati Indianapolis Salt Lake City Austin 56% 38% 6% 54% 42% 3% 54% 40% 6% 3% 2% 9% 7% 5% 5% 6% 7% 7% 6% 6% 6% 6% 4% 8% 7% 8% 13% 53% 52% 52% 51% 50% 49% 49% 49% 49% 48% 46% 46% 46% 45% 43% 39% 42% 45% 43% 45% 44% 43% 44% 46% 44% 46% 45% 44% 46% 45% 49% 46% 47% 47% 44% 4% 7% 7% 7% 7% 8% 8% 6% 8% 9% 54% 50% 50% 49% 49% 49% 49% 49% 48% 48% 48% 46% 45% 43% 41% 43% 45% 44% 46% 47% 51% TV Only TV and Streaming Device Streaming Device Only16 Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved. THE NIELSEN LOCAL WATCH REPORT | Q4 2017 NOT ALL STREAMERS ARE ALIKE STREAMER SEGMENTS BEHAVE DIFFERENTLY, YET ALL SHOW ATTACHMENT TO BROADCAST TV Source: Nielsen NPower, Average Daily Reach Among Persons 25