Saw this article today in the LA Times, “Wii titles drag down July video game sales“, by Alex Pham. It shows that while video game console sales are up, overall spending is down 1%, the fourth month of consecutive sales decline. According to the article, the lack of Wii title sales are contributing most to the decline. I wondered why and was curious to know if the economy has anything to do with this trend?
In looking at first quarter Economic Impact data from New Media Measure™, it appears that the economy might be a contributor. In my analysis, I excluded those that haven’t used their console in the last 3 months and chose instead to study active users. If a console hasn’t been used in a household in the last 3 months, that household is likely not an engaged video game consumer. Isolating this group will help me to see the impact of likelier buyers.
When asked the question, “as a result of the current economic situation, you have cut back your spending a lot” all active console owners, whether Wii, Xbox 360 or PS3 are less likely to agree with this statement than the average household. However, when asked, “as a result of the current economic situation, you have cut back your spending a little“ active Wii owners are 12% more likely to agree to this statement compared to active PS3 owners and 15% more likely to agree compared to active Xbox 360 active owners. On the flip side, active Xbox 360 and PS3 owners are much more likely to agree with the statement, “as a result of the current economic situation, you haven’t changed your spending habits,” while active Wii owners don’t agree as much with this statement. So, it does appear that active Wii households are somewhat more impacted by the economy and very well could be why Wii sales are down.
Plastic Logic announced yesterday they are canceling the release of their Que ebook reader device. The decision is a good one. It would have been near impossible to compete in a marketplace at a price point of $649 – especially in light of Amazon Kindle’s recent price reductions – and also because the market is well served at the higher end by Apple with its iPad device.
It got me thinking about the market in general so we pulled some data from our New Media Measure™ product, which is this week’s “data point of the week” (#DPOW).
The current mix of owners is skewed male, but women appear to be the more voracious consumers of novels/books, downloading slightly more than 3 novels/books compared to men over the last 6 months (almost double). Moreover, when we looked at planned purchase (i.e. “plan to own within the next 3 months”), women are slightly more likely than males to purchase an e-reader device. This should be very good news for Amazon as the price for the Kindle is now at a point where most consumers won’t need to second guess the decision. It is not too far-fetched to believe the prevailing sentiment at the checkout counter is/will be - it almost pays for itself given the price differential between electronic books and hardcover books – not to mention the savings in gas and time efficiency not having to go to the bookstore.
At the higher end of the market, where “bells and whistles” are an important consideration in buying such a device, the iPad would be difficult to topple. However, while a superior device to the Kindle in terms of features and style elegance, the iPad is not the “Kindle Killer” many had predicted. What appears more likely is that the Kindle and the iPad can pleasantly co-exist, with Amazon the ultimate winner in terms of ereader etailing. As someone who owns both devices, I definitely find myself gravitating towards the iPad more often because of its broader utility, but even so, I’m buying books through the Kindle app! I suspect I’m not alone.
August 16th, 2010 in
Digital Media |
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In a report written by Interpret’s Marissa Gluck, “Getting Moms to the Movies” moms and dads show some distinct differences in their media behavior. According to data from the report, which comes from New Media Measure™:
Dads tend to spend more time on entertainment-related activities, such as watching cable, watching movies on DVD or Blu-ray, watching videos on the Internet, or downloading movie content. In contrast, moms spend more time on social networking activities, spending 4.3 hours per month on average, while dads spend almost an hour less per month, or 3.42 hours on average.
While the behavior of dads isn’t surprising, what is interesting and notable is the amount of time moms are spending with social media. Spend anytime at home during the day watching television, based on the content of the advertising, it is clear advertisers are largely focused on women and/or stay-at-home moms. Again, this shouldn’t be a surprise to anyone as according to the U.S. Census, nearly 35 million households have a child under the age of 18, which means a large potential audience of stay-at-home moms (and dads, in some cases). Not only significantly large, but an influential audience as these are generally the key household purchase decision makers.
This data shows that these are no longer merely passive viewers (wipe away the archaic vision of women at home ironing their husbands shirts while watching a soap opera). Instead, these are active consumers who are engaging more with interactive media – not only social networking for communication, but our data also shows a high propensity for social network gaming as well. Marketers take note. This channel of communication is becoming increasingly more important and the need to understand its unique nuances (which change by the day at the hands of Facebook/MySpace/Twitter programmers) is crucial for reaching and influencing key consumer segments.
Today, we are releasing data and analysis from our New Media Measure™ interpretations report, “3D State of Union: Are Consumers Ready?” Leading up to, and after the release of “Avatar,” discussion and debate about the viability of 3D entertainment has been on the rise. Will it succeed? What will be the impediments to success? What do consumers think? Is 3D in the home appealing enough to drive purchases of new televisions? For the first time, thanks to Michael Cai and Brenton Lyle of Interpret, we now have quantitative data to answer many of these questions and begin to build a perspective on the future of 3D entertainment.
With research data, people tend to look for the “ah-hahs!” but often some of the more interesting data are what confirms our suspicions. In this case, we intuit that the 3D glasses are a major impediment to the success of 3D, which the data supports not surprisingly. Interestingly, though, the people you would expect to have greater comfort with the glasses are the 3D theatergoers. In fact, just over half of 3D theatergoers report wearing glasses as their primary dislike of the technology, versus 3D game players, only 37% of which have concerns about the technology. The other way to look at this, and perhaps the more pessimistic view, is that those with more experience with the technology are more likely to dislike it. All of which means, the glasses are a problem no matter what your experience with 3D.
The glasses aren’t the only impediment. We found that the average amount of time between consumers replacing the primary television in their household is 4.5 years with nearly half claiming it takes 6 or more years. We, like many others, believe that consumers looking to upgrade their primary televisions are now facing a choice between HDTV and 3D. Consumers will need to weigh the relative value of purchasing either type of television. A key finding from the study that should cause concern in the industry, is that consumers are very confused about 3D, and in fact, are misinformed about how the technology actually works. Consumers tend to be much more informed about HDTV and believe the length of time the technology has been in the market will be to their benefit in terms of price.
The consumers most likely to purchase a 3D set are early adopter consumers – who just happen to be those that already bought an HDTV set. Of the 54% of consumers who currently own an HDTV, they purchased it on average approximately 1.7 years ago. So, promoters of 3D television sets have their work cut out for them.
There is good news - 5% of heads of households in our study stated that they are “definitely interested” in purchasing a 3D TV in the next 12 months. As Michael Cai points out, “Even though consumer self-reported purchase intention needs to be discounted significantly, the percentage of 3D TV intenders is nothing to be sniffed at. Based on consumer data, we anticipate more than 4 million 3D TV sets to be sold in the United States in the next 12 months.”
That is perhaps a large enough number to keep content creators interested in producing for the format. Without their support, 3D will once again experience a stalled start and we’ll all be discussing what could have been.
Based on Interpret’s Q4 2009 New Media Measure™ survey, approximately 46 million people are playing social network games such as “Farmville” and “Mafia Wars” on sites such as Facebook. A smaller but still significant group of over 11 million only play these games and don’t play games on platforms such as the Wii or PS3. According to Brenton Lyle, Senior Strategist at Interpret, “social game players are not only sophisticated users of social networks, but they are very amenable to advertising as well.” According to the data, users who play games only on social networking sites are twice as likely to visit company profile pages and click on advertisements or sponsors versus the average social network user.
The above comes from a press release from my company, Interpret. Other than selfishly showing off, I couldn’t let this news go without comment. For the last three years, we have been tracking on a quarterly basis a wide variety of media (traditional, digital, video gaming, etc.) behaviors among 12-65 year olds in the US. For most of those quarters, we didn’t see much change in the size of the gaming audience. The incidence hovered around 47% fairly consistently, until late 2008 when we saw a huge spike in gaming – 28% increase, to be exact. It set off major alarm bells in our office as our first concern was that there must be something wrong with the data. After several late nights, much analysis, and the harried nerves of our analysts, we determined the data was correct. Over the following quarters, video gaming in the US held at those higher numbers. The Wii had been in the market since December 2007, so we attributed some of that growth to it. But, another interesting trend was emerging that was slowly proving to be a major factor in expanding the gaming audience – social networking. From Q3 of 2008 to Q3 of 2009, the video gaming audience increased 28%; over the same time period, social networking grew by 56%.
Facebook has now become as important to gaming as other casual gaming sites. Between 3rd and 4th quarter of 2009, Facebook surpassed Yahoo! as the number one casual gaming website among casual gamers.
My dear Kindle — please forgive me for any neglect you may have felt over the last week. I’m sure you are curious about my feelings and our future together. I must admit, I’ve been stricken by the iPad – it’s sleek design, the promise of augmented multi-tasking capabilities, casual browsing and video. I know it’s cliche - I’m falling for a younger, more silicon-endowed, graphically appealing model – but, I’m still not completely fulfilled. So, I have a proposition. Would you consider “device polygamy” and become a sister-wife to the iPad? It might help if I explained what’s attracting me to the iPad and away from you.
First, the screen is impressive – color helps obviously, but the resolution is crisp and seemingly not too taxing on the eyes. As a result, my viewing and reading experiences are significantly enhanced. This was a big concern for me as Kindle’s digital ink is a closer approximation of actual ink on a page and backlighting can be a real strain. It’s still early so we’ll see how longer-term exposure changes (or not) this sentiment. Second, the experience of reading newspapers (I’ve tested the Wall Street Journal app) is a better parallel to reading the print edition, even surpassing online web versions (credit perhaps goes to WSJ for designing the app extremely well). In fact, I cancelled my Kindle WSJ subscription in favor of the iPad app, even though it’s several dollars more per month (but justified in that it allows me access to WSJ online as well). I found reading newspapers on the Kindle to be too constraining and almost claustrophobic in its layout on the page. The WJS iPad app lays out the page in a way that I can get a quick digest and then launch into any story. Moreover, a right-side scrollable tool bar provides a brief title of other stories in the section which are easily linked to. Third, having casual web browsing at my fingertips is truly a life-changer. I’m more efficient now in both my information and news gathering as well as in stealing moments of entertainment. I really hated the idea of either reading the Kindle close to my computer or writing down things to look up later. Now, additional information is a quick click away. Fourth, I haven’t tried it beyond novelty usage, but I can intuitively see how video will expand my entertainment options and also enhance my information sources. Just the mere fact that I can get videos is a net positive. Finally, apps are the “blue ocean” that will continually drive me into the arms of the iPad. I have found many apps on the iPhone/iPod Touch to be very useful, but the power of apps for someone of my lifestage/lifestyle (i.e. 30-55) will truly be realized on the iPad. The screen size and the choice of a myriad of cost-effecient, highly useful apps combine to create a heightened experience in terms of productivity, ideation and organization.
With all that, I’m sure you’re wondering why I’m even still considering keeping you in my life? For starters, your association with the Amazon store is too compelling to ignore. In fact, after several failed attempts to find specific books I was interested in reading on iBook, I resorted to downloading the Kindle app so I could find the books through Amazon. I also went ahead and moved several of my favorites from the archives so I now have them available to me on the iPad. And, while the bookmarking and annotation is much nicer and easier to use, the one big downside is that I can’t look up words (if it’s possible and I haven’t figured it out yet, someone please help). Of particular concern, is what impact will the weight of the iPad have on my susceptibility to carpal tunnel syndrome! Holding the Kindle in one hand while reading in bed is manageable. Doing the same with the iPad is less so and requires hand-to-hand shifting more frequently. Finally, while I’m careful with the Kindle, I’m ultra-sensitive about where I take the iPad. Kindle and I have gone to the beach, ate lunch together, sat at an outside table at Starbucks. Will I treat the iPad a bit more preciously and not take it as many places? Simple answer. Yes.
Not much to hang a relationship on, is it, Kindle? Can you live with co-habitation? Hopefully, you are allowed to innovate and expand your capabilities through your app on the iPad, which will definitely extend our relationship. But, sooner or later, the iPad will address all the above, and more (that I haven’t even thought about yet). So, a more apt, albeit unlikely and unrealistic, hope is that you guys (Amazon and Apple) find a way to co-exist and allow each other to do what you do best – Apple, you design highly engaging consumer experiences through your hardware products, and Amazon, focus on selling the best library of literary and information material available anywhere. Now, that’s a marriage I would support.
We all want to be special. In fact, we all think we are special. So, it’s no surprise that I don’t consider myself immune to such hyperbole. As I was writing one of my prior posts, it struck me that I’m quite possibly a member of the most important generation (at least as it relates to media today). Not Gen X, which is far too narrowly defined. I’m talking about the group of consumers that is in between those that have no interest in new media and those that are defining a wholly different paradigm for media consumption. Lets call it the “in-betweener” generation. We are old enough to remember a time that we had to get off the couch and physically turn a dial to change the channel and young enough to know that in order for us to be relevant and remain competitive we better figure out how to use new media.
Why are we so important?
1) we have disposable income to purchase essential and non-essential products.
2) we continue to buy traditional media products with that disposable income. We have grown accustomed (not to the point of inflexibility, mind you) to buying and renting DVDs; we are still going to the movies (much higher prevalence of family and animated movies given the ages of our children); we watch a lot of television (Tivo is less about skipping commercials and more about getting through an hour show, which takes a couple hours with all the distractions – “can I have a glass a water”, “PJ is bothering me”, “I can’t sleep”); and we still actually read physical print.
3) we are at the point of our lives where we still carry some influence – maybe not as much as our younger, hipper Gen Y friends might think we have, but certainly given the stage of our careers we can be an impediment or a catalyst. Which means, we actually do play a role in helping to forward the progress of new media both from a usage standpoint as well as from an executive or business positioning.
Am I reaching? Maybe, but I still think there is something there there. What do you think?
I’m leaving Las Vegas. Not because I lost too much money. Not because I’ve eaten too much and need to get back to healthy LA. No, I’m leaving because I can’t conduct any business on my cell phone. Ironically, I’ve been here in Vegas attending the CTIA Wireless Convention. Perhaps it’s just that the incidence of cell phone users is higher among those in the mobile industry. Or, the wireless networks are overloaded with all the innovations handset manufacturers, mobile software companies and carriers are showing off at the convention. That’s what I’ve been telling myself to maintain sanity, but the reality is that I’ve been experiencing these problems with increasing frequency over the last year.
This is the by-product of a growing number of feature-rich smartphones that have hit the market in the last several years, and the pace of innovation isn’t slowing down anytime soon. Phones have become an extension of our personal and professional lives and these aren’t mutually exclusive. Consumers spent $41B in 2009 on wireless internet, up 28% from the year prior; smartphones are expected to reach 400 million units within the next 4-5 years, representing 25% of all handsets. We are clogging the network with a crushing amount of data from text-messaging to interacting with our social network apps to surfing the web to playing games to downloading videos, and, oh right, making phone calls. Now with a growing list of uniquely valuable and fun GPS location based services, this is only going to get worse.
Much of the discussion at CTIA and earlier this year at CES has been about network infrastructure. The conversations have been happening on stage, in the halls of the convention center, at social gatherings, but there is no real consensus other than the simple fact that something needs to be done. The FCC’s plan calls for freeing up 500MHz of wireless spectrum, but that isn’t expected to make a difference for another 5 years, minimum. Without a viable solution for managing our current network constraints consumers growing conditioned to using their cell phones for everything from communication, community to content will feel the same frustration I’m feeling right now. That could seriously impact many of the businesses emerging now that are being built with bandwidth-sucking innovations.
The good news is that the industry knows this is a problem and is looking beyond government to help solve the problem. We are going to start hearing a lot more about new technologies like femtocells, LTE, Wi-Max as solutions. I witnessed LTE in action at a Verizon briefing and if it’s half as good as the demo, we are headed in the right direction. If only I could have stayed in the Verizon booth the whole time.
For those of us who grew up with traditional media, the experience of coming home, checking the mail and seeing a freshly printed, new copy of a favorite magazine is still special. There is an excitement unique to print media that comes with thumbing through every page until you reach the Table of Contents – if it’s a special interest magazine, even the advertisements are perused – wouldn’t want to miss anything relevant.
Given my lifestage, I straddle traditional and new media. I’m old enough to remember a time without the Internet, cell phones and 500 cable channels; yet young enough to find tangible value in many of the new media technologies from streaming tv shows to Twitter. As an “in-betweener” I’m beginning to see more clearly where the destruction of some forms of traditional media are being hastened by the utility of new media. One example. Back to my magazine experience. I sat down to read Time magazine the other day. There were no less than 3 articles I found particularly interesting, which I would love to have shared with my social network. One problem. I’m lazy. The thought of going to my computer, searching for the articles on Time’s website and Tweeting them was sufficiently annoying to keep me supine and reading on.
I’m beginning to realize more and more everyday that my media experience is something I want to share and discuss. It’s no longer just a singular, individual experience. The fact that I’m coming to this realization increasingly may say more about my life-stage, but it isn’t insignificant. If part of the experience of me enjoying media is to share it, how can a physical media product compete? It can’t. I wonder how many others out there are like me….
Two competing services are vying for regulatory approval to create a futures exchange for movies. Now (at least for the Cantor Fitzgerald exchange), anyone can buy futures contracts on upcoming movies. The pricing is determined by first 4 weeks of box office, which moves up or down based on volume of trades and armchair quarterback predictions. One issue to ponder is whether the studios and/or producers in Hollywood would look to use the service as a hedge by shorting the stock of their movies. Definitely not in a public way, but likely? Hmmm. Also interesting is whether Hollywood insiders will have an information advantage over other traders – if so, could be a lucrative side business playing the arbitrage game.
