Today, consumers have a vast array of choices for accessing premium video content. But online video, particularly streaming, is the fasting growing category. In the United States, 48 percent of consumers have increased their streaming in the last two years. And while free/ad-supported video is the most common, opportunities for monetizing content are being driven by the convenience of multi-screen access and the growing breadth of content. More info: http://cs.co/ibsg-streaming

1. Streaming Enters the Mainstream
The Upward Arc of Online Video,
Driven by Consumers
@CiscoIBSG
For more information: http://cs.co/ibsg-streaming
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 1

2. Consumers Now Spend More Time Watching Internet Video
Than DVDs/Blu-ray, VoD, or Live Premium Cable Channels
% of Time Spent Watching Categories
of Professionally Produced Video  Internet video captures
13.8% of time spent watching
Live television professional video, comprised
4.09
6.82 of downloaded Internet at
Recorded television (PVR) 2.84% and streaming Internet
6.96 video at 10.92%
Streaming Internet video
42.91  Streaming internet video alone
10.93 Downloaded Internet video is tied with DVDs or Blu-ray
discs use
DVDs or Blu-ray discs
2.84  Internet video use at 13.8%
may soon surpass PVR use
Live premium cable
10.92 at 14.53%
channels (e.g., HBO, Starz)
Movies in the  Live TV remains the largest
13.8% 14.53 cinema (e.g., AMC Theaters) component at 42.91% of
Video on demand (VOD) time spent
Sample Size = 1152
Q: Of the time that you spend watching professionally-produced video,
what percentage is in each of the following categories?
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 2

3. 2012 Olympics Saw Significant
Viewing Online, on Multiple Platforms and Devices
Audience (M) 4.9M to 7.3M Unique Daily Browsers
10000
4800
1000
100
52
36
10
Usage by hour across the day by device - for 28 July to 9 Aug
1
Global TV UK TV UK Online
Connected TVs Showed a Strong Usage
Source: BBC, 2012; Cisco IBSG Analysis
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 3

4. Internet Video Use Is Rising Across All Devices, With Tablet Use
Increasing the Most and Desktops the Least
Change of Watching Internet Video in Last Two Years by Device Types
(Current Users of Each Device)
Net
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Change
Tablet computer 4% 36% 61%
57%
50%
e-Book reader 6% 39% 56%
49%
Streaming Internet video device 7% 37% 56%
49%
Smartphone 7% 37% 56%
47%
Gaming console with Internet connection 9% 35% 56%
48%
Laptop computer 7% 38% 55% 46%
Connected HDTV 6% 42% 52% 39%
Portable gaming device with Internet connection 11% 39% 50% 39%
Cable, satellite, or IPTV set-top-box connected to the Internet 8% 45% 47% 33%
Portable media player 11% 44% 44% 31%
Desktop computer 13% 43% 44%
37%
Other 13% 38% 50%
Decreased Stayed the same Increased
US Broadband Users; n=791
Q : How has the amount of Internet video you watch on each of the following
devices changed over the past two years? (professionally –produced video)
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 4

5. But Television and Set-Top Boxes Still Rule for Those Who Are
Already Watching Internet Video
% of Internet Video device users by time/week watching Internet Video by device types
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cable, satellite, or IPTV set-top-box connected to the Internet
Connected HDTV
Streaming Internet video device
Gaming console with Internet connection
Laptop computer
Tablet computer
Portable gaming device with Internet connection
e-Book reader
Desktop computer
Portable media player
Smartphone
Other
1-29 min./ week 30-59 min./ week 1-2 hours/ week 3-5 hours/ week 6-8 hours/ week 8 or more hours/ week
Q: How much Internet video do you watch on each of the following devices? US Broadband Users; n= 809
(professionally—produced video)
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 5

6. Free/ad Supported and Subscription Sites Are Used More
Frequently Than Transactional VoD and Pirated Video
Frequency of Watching Internet Video by Source Types
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Free Internet video from media company sites 10% 33% 21% 9% 28%
Free Internet video from aggregator sites 13% 28% 18% 9% 32%
Paid Internet video subscriptions 14% 24% 12% 6% 44%
Television programs, accessible online as part of your subscription 7% 18% 12% 7% 56%
Individual rentals of Internet video 2% 11% 15% 9% 62%
Internet video from file sharing sites and torrents 5% 10% 11% 6% 68%
Individual purchases of Internet video 2% 8% 9% 5% 76%
Daily Weekly Monthly Yearly Never
Q: How often do you watch Internet video from the following sources? US Broadband Users; n= 809
(professionally produced video)
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 6

7. 42% of Consumers Watch TV Shows Over the Internet Daily;
52% Watch Online Movies Weekly
Frequency of Watching Internet Video by Content Types
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
TV shows 42% 32% 9% 10% 6%
Movies 12% 40% 22% 12% 14%
Short videos 13% 28% 23% 14% 21%
Music video 12% 23% 20% 18% 27%
Sporting events 8% 26% 14% 16% 35%
Mini-sodes 5% 16% 15% 14% 50%
Other events 3% 13% 20% 28% 36%
Daily Weekly Monthly Yearly Never
Q: How often do you watch the following categories of professionally US Broadband Users; n= 809
produced Internet video?
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 7

8. Consumers Seek Free Content and Convenience but
Will Pay for Quality of Experience and Specific Content
Most Important Factors Influencing How and Where to Watch, and Willingness to Pay
Whether I have to pay
At a time of my choosing
Ability to watch “catch-up TV” (i.e., watch recent shows you missed when they…
Absence of technical problems (i.e., no delays, freezing)
Most Desired
The quality of the picture/sound
Ease of finding and acquiring video to watch
Availability of specific favorite shows or events I already enjoy
Convenience of acquiring video (i.e., can start watching immediately)
On a device of my choosing
Value:
Ability to pause or rewind live video
You get what you pay for
Scene selection and chaptering (e.g., special scenes, directors cut, etc.)
Compatible / optimized for the device or application I want to use
A “seamless” experience where the content and device are integrated Luxury
Availability of the absolute latest content This would cost me but not sure I need it
Whether I have to see advertisements
Most important factors to decide how and where to watch
Most important factors influencing willingness to pay 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Sample Size = 1152
How/Where: When it comes to watching video, which of the following Pay: Which of the following factors would have the biggest impact on your
factors are most important to you in deciding how and where to watch? willingness to pay for video content (i.e., including renting, subscribing,
or one-time purchases)?
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 8

9. A Broad Library and Easy Access to Internet Video on TV Will
Draw More Consumers
Factors to drive more Internet video usage
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
More free video content 46%
Broader availability / range of videos 23%
Content is king
Ability to watch Internet video on a large TV screen (e.g., 40" HDTV) 21%
Viewing experience matters
Owning a device that made it easier / better to watch Internet video 18%
Lower home broadband costs 18% Low broadband costs help
Having an affordable unlimited mobile data plan 15%
Internet video adoption
Ability to watch content I download or buy on a broader range of devices
11%
(i.e., no compatibility issues)
Wider mobile broadband (e.g., WiFi, 4G) coverage, to watch mobile
9%
video
Greater flexibility to share videos, either on DVDs I burn or through social
networks, e-mail, etc.
7% Social sharing doesn’t matter
Other (please specify) 3%
None of the above 22%
US Broadband Users; n= 1152
Q : What would encourage you to watch / obtain more
professionally-produced Internet video?
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 9

10. Digital Lockers Will Drive Additional Sales and Rental of Online
Video for 27% and 19% of Consumers, Respectively
Digital Locker Impact on Video Buy/Rent
70% 66%  Digital Locker has greater
62%
impact on buying than
60%
renting video.
50%  When looking at frequent
internet video users 32%
40% Buy more video: 27% would be more likely to
Rent more video: 19% buy, and 24% would be
30% more likely to rent.
23%
20%  Digital locker services
15%
may result in greater
10%
10% 8% purchases of video
5% 4% 4%
3% content by consumers
0% as well as an uptick in
Significantly less Somewhat less No Change Somewhat more Significantly more video rentals.
Buy Rent
Sample Size = 1152
Q: If you had a digital locker with all of the features you have just
evaluated, how would that change the amount of video you buy/rent?
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 10

11. Consumers Will Increase Internet Video Use on all Devices in the
Near Future, With Mobility a Key Factor
Expected Change of Watching Internet Video in Next Two Years by Device Types
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Laptop computer 6% 52% 42%
Tablet computer 5% 55% 40%
Smartphone 5% 56% 39%
Cable, satellite, or IPTV set-top-box connected to the Internet 6% 57% 37%
Connected HDTV 5% 59% 36%
Gaming console with Internet connection 6% 58% 35%
e-Book reader 6% 62% 33%
Desktop computer 9% 58% 32%
Streaming Internet video device 5% 64% 30%
Portable media player 9% 64% 27%
Portable gaming device with Internet connection 6% 71% 23%
Other 5% 73% 23%
Decrease Stay the same Increase
US Broadband Users; n= 791
Q: How will the amount of Internet video you watch on each of the following
devices change over the next two years? (professionally produced video)
Source: Cisco IBSG Media Cloud Survey, 2012
Cisco IBSG © 2012 Cisco and/or its affiliates. All rights reserved. Cisco Public Internet Business Solutions Group 11

12. For more information:
http://cs.co/ibsg-streaming