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Interpret's Brett Sappington Talks Media and Entertainment Fragmentation

Learn more about media market fragmentation at Streaming Media West 2022.

Tim Siglin: Welcome back to Streaming Media East 2022 in Boston. I'm Tim Siglin, contributing editor with Streaming Media and the Founding Executive Director of the not-for-profit Help Me Stream Research Foundation. Today, I've got with me Brett Sappington from Interpret. Tell me what interpret is, because I'm not familiar.

Brett Sappington: Interpret is a global market research and insights firm. Based out of Los Angeles, I'm actually based out of the Dallas office.

Tim Siglin: And what's the primary industry that interpret works with

Brett Sappington: Interpret works in a number of areas. I lead the video entertainment research practice. But we also have expertise in gaming and internet of things and a couple of other areas.

Tim Siglin: So, what have you seen that's changed in the last three years since all of us were together at streaming events, from a market analysis standpoint?

Brett Sappington: Well, the, the mantra of the industry is it's always changing. Over the past two years, COVID certainly made a lot of difference in terms of how things were consumed. But one of the things we're really looking at is how video entertainment is changing in terms of the consumer's overall portfolio of entertainment. So we're talking gaming and music and podcasts and reading, and other areas like that. So it's been really interesting to see how that share has changed, because we always look at total number of hours. We look at streaming versus traditional. But until you understand where it sits relative to everything else, it's hard to understand if that share is growing or if it's shrinking? And as you look at the audience, what does that mean? And what do you do about it?

Tim Siglin: I did an interview with earlier with Jessica Masters from Roku, and she mentioned that she had worked for a number of channels before Roku, which is a platform. And then on the Roku channel, where the percentage of cord cutters is well above 50% at this point. And the consumption of content appears to be well above 50% for standard linear television versus live linear or VOD packaged or FAST packaged. In his keynote this morning, William Roberts-Foster from NBCU said they're at about 37%. They're not quite to 50. They figure within the next two years, they'll get to 50. What do you all see? Do you see that as a whole? Those are just two small snapshots into the industry, but do you see, as a whole, that we're past that 50% mark for linear television versus streaming? Or where do we fall in that?

Brett Sappington: I see it around the same spot, about 50% or even more going with streaming today. What we found also that's interesting in that portfolio that I was talking about: for consumers in the US for video, television and movies represents about 40% of entertainment consumption. At the end of 2021, for the first time, it fell below 40% to 39%. And what's interesting about that is that's why video consumption has at least marginally grown. So what that says is that consumers are using more entertainment from other areas.

Tim Siglin: When we talked about the State of Streaming survey this morning, we talked about large viewing or subscriber models seem to be falling away in favor of lower numbers of subscribers. So a fragmentation in the market. Potentially what I hear you say is it's not just a fragmentation in the streaming portion of the market. It's a fragmentation in the way the media consumption is done across the board.

Brett Sappington: Right. And even perhaps more than that, you have the fragmentation from traditional to streaming services and a multitude of streaming services. Though you have a number of big players coming up, we're also finding that there'seven a further fragmentation in terms of types of content. Short-form content live streaming, YouTube, TikTok. So not only are we seeing this fragmentation in terms of service options, but in terms of consumer preference and what they're filling their time with.On average, we find that, for example, live streaming consumers are averaging about two hours a week watching livestream content, and that's really across all ages. That's a really different world.

Tim Siglin: Very much so. And it's interesting to think back to Vine, Periscope, and some of those other short-form platforms that didn't quite get off the ground or got off the ground and fell away. And yet now we have TikTok with an even shorter-length consumption model. Is the trend toward shorter and shorter? Or is that just sort of a wave we're going through with media consumption?

Brett Sappington: Yeah, it's a good question. What we find is that TV and movies still is number one, even if it has shrunk relative to the overall consumption of consumers, it's still the top option. Even the youngest group, 13 to 24-year-olds, about a third of their consumption is TV and movies. But what we're finding is these other formats are really filling up a larger piece of that. For young consumers, about 5% of their overall consumption is around shortform video. Which is massive, considering that about a third of their content is TV and movies. So it's a huge change and it's not just an erosion of TV and movies.

Tim Siglin: So we'll end on a note of something you mentioned, you mentioned reading. How has that fared through the pandemic?

Brett Sappington: Surprisingly, reading has stayed fairly consistent, both physical media and digital media. We do find a few interesting trends. For example, with young consumers, we actually saw physical media reading increased slightly. And it was primarily graphic novels, comics, and and those types of materials. So the materials are different. The sources are different. But no fears for the next generation. They're still reading.

Tim Siglin: Good. Well, that's actually a really positive thing to hear.

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