Video Consumption and Consumer Attitudes 2016
AGENDA 1. Optimizing the Power of Golf Video: A Consumer Perspective 2. Golfer Perspectives on 2016: Expectations and Impact 2
OPTIMIZING THE POWER OF GOLF VIDEO: A CONSUMER PERSPECTIVE 3
OVERVIEW MEDIA-AGNOSTIC STUDY OF NEARLY 4,300 GOLFERS (AVID, CORE AND CASUAL) SURVEYED o ANALYSIS INCLUDES:» TOTAL GOLF MARKET» PARTICIPATION (AVIDITY AND COMMITMENT)» GOLF-RELATED SPENDING» ABILITY MULTI-MODAL APPROACH TO COMBINE QUALITATIVE AND QUANTITATIVE RESEARCH PHASES FORCED CHOICE OPTIMIZATION AND CONJOINT ANALYSIS TO ASSESS THE OPTIMAL CONFIGURATION OF GOLF- RELATED ONLINE VIDEOS 4
A VIEW FROM 30,000 FEET PERVASIVE. Golf online video viewership has become a welcome element of the golf media mix, with particular resonance among golf s most coveted and valuable customers. SYNERGISTIC AND COMPLIMENTERY. While a third of the total golf market, and nearly 2 in 3 of golf s best customers, actively consume golf-related video, they perceive these as another component of their golf media content mix, that works in lockstep as an augment to First Tier media such as television and print. CREDIBLE, OBJECTIVE AND AUTHENTIC. Golfers value the measured evaluations of well known, endemic third party brands when watching videos on new golf equipment and travel destinations. They do not want to be overtly sold to. PERSONALIZED. Golfers are particular in sourcing content that they find to be personally relevant, through varied gateways, often through search-related or known golf-specific media brands. BITE-SIZED. While golfers are particular about specific content, they subscribe to the K.I.S.S. method when seeking out the optimal golf-related online videos. 5
NEARLY A THIRD OF THE GOLFER MARKET HAS ACCESSED GOLF-RELATED CONTENT THROUGH ONLINE VIDEOS OVER THE PAST SIX MONTHS Q: You indicated that you participate in golf. Please indicate which, if any, of the following media sources, you have used to learn more about or follow golf content over the past six months. 68% 32% Watched golfrelated online videos 6
A LOOK AT THE GOLF VIDEO MARKET BY AVIDITY 2.3 Million Online Video Watchers (21%) Occasional Golfers: Estimated Size: 11.1 Million (45%) 2.6 Million Online Video Watchers (36%) Core Golfers: 7.2 Million (29%) 2.7 Million Online Video Watchers (42%) Avid Golfers: Estimated size: 6.4 Million (26%) Total 8+ Rounds: 13.6 Million 5.3 Million Online Video Watchers (40%) Golf s 5.1 million Best Customers, make up 30% of the male market, 75% of the spending and two-thirds of the rounds played Note: Includes women and juniors. Source National Golf Foundation, Golf Participation in the U.S. 2014 An estimated 3.2 million of these best customers (63%) have watched golf-related online videos within the past six months 7
WHO S WATCHING? Index Generation Next Golf Publication Readers Avid Players Mid Level Handicappers Core Players 153 146 133 125 115 Casual Players 66 8 +Denotes INDEX vs. Total Golf Market
WHAT ARE THEY WATCHING? Golf-Related News Golf Equipment Golf Tournament Coverage 78% 77% 77% Golf Instruction 69% Golf Personalities The Rules of Golf Golf Trick Shots Golf History Golf-Related Travel Golf-Related Physical Fitness or Conditioning The Mental Side of Golf Other Golf Lifestyle Content 58% 55% 53% 51% 51% 48% 45% 44% 9
MULTIPLE POINTS OF ACCESS DRIVE GOLFERS TO VIDEO Third Parties are just as important as direct OEM or Travel Provider Gateways Q: From which of the following sources have you accessed or received golf-related video content? Searched on YouTube or a similar video site; Search Engines such as Google Golf publications or digital magazines; Directly visited OEM or Golf Retailer Website; Social Media platforms such as Twitter or Facebook; Online newsletters received via email Direct emails Equipment Junkies are particularly more likely to access golf videos from multiple sources 10
GOLF VIDEO IN CONTEXT-- COMPLEMENTARY, NOT DISRUPTIVE TO FIRST TIER GOLF MEDIA CONSUMPTION v Magazine readers are more likely to also watch golf video Incidence of those accessing golf video content over the past six months Who also read golf magazines 46% Top three box agreement Golf Videos are a complement to the golf publications that I read (Indices relative to golfers overall) q Highest Spenders (Index 151) Who also watch golf on television Golfers overall 36% 32% I find golf-related videos to be additive to golf content that I read about q Golfers <35 (Index 114) q Highest Spenders (Index 113) 11
MORE IS STILL MORE v Golfers are More Likely to be Increasing Their Time Spent with First Tier Golf Media (Print and TV) Than They Are to be Increasing their Time Watching Golf Videos Q: Compared to a year ago, would you say you are spending more time, less time or about the same amount of time doing each of the following activities? MORE TIME 49% 52% 51% 53% 34% 34% 41% 38% First Tier Media Golf Videos Total Golfers Avids/Core Golfers <35 Highest Spenders 12
CREDIBILITY, TRUST, OBJECTIVITY AND UTILITY TIP TO 3 RD PARTY BRANDING AND GATEWAYS Golf Videos on a golf manufacturer s website % Golf Videos on a third party golf media website % Golf videos found through a search engine % Golf videos found through YouTube % Golf videos on social media % Most Informative 33 32 15 13 8 Most Useful 23 34 18 16 10 Most Believable/ Credible 22 39 16 14 8 Most Entertaining 17 23 13 30 17 Most Memorable 19 24 15 26 16 Most likely to make me want to learn more about a product or service Contains most information I can t find elsewhere 29 31 16 14 11 26 28 19 16 11 Most Trustworthy 24 40 16 14 7 Most Objective & Unbiased 17 42 14 15 11 13
GOLF VIDEO IN CONTEXT: WHAT MAKES FOR AN ENGAGING VIDEO I m looking for a credible person one of the top instructors, who can relate to my game. I want to see videos that are tailored for me. I m never going to swing like Rory McIlroy. Any kind of third party that has credibility and has conducted their own tests and independent observation. I want to know which product is really going to make a difference for me. If it s travel, I m looking to get a feel for the place. I like videos that show you more of the course. But I m also looking for data. I want specifics on cost and which courses I can play. I want something short and general that reminds me of the basics. It s important to know who it s from. I m looking to solve a specific problem. I don t care about Paulina Gretzky. 14
CONJOINT ANALYSIS LEADS TO OPTIMAL EQUIPMENT VIDEO CONFIGURATION Key Findings: The Optimal Combination: PGA Tour Pro OR Top Teacher A known media brand such as a golf magazine/television network or OEM Under 3 minutes One needs to click play to watch the video Host/Narrator of the video Source or Origin of the video Length of the video Delivery Featured as a product demonstration Multiple new models of golf equipment Context or Presentation Format Quantity of Products Shown The new golf equipment is discussed or featured in a non-promotional format Tone 15
Golfer Perspectives on Retail, The Sport and The Economy
TWO MINUTE TAKE-AWAYS The TOURs continue to resonate with the PGA TOUR returning to its 2014 popularity after a slight dip in 2015. Golfers insatiable appetite for tournament coverage shows no end in sight. Participation A nice uptick to those playing more in 2015 is accompanied by typically bullish forward attitudes. 2015 s strong concerns about participation growth recede. Consumers are still buying into the promise of technological equipment innovation, but confidence in equipment s ability to bring about immediate game improvement slides to a four year low. Conditioning towards Equipment Deals has diminished somewhat though golfer spending expectations rise, as more consumers flock to mainline sporting goods retail. 17
TWO MINUTE TAKE-AWAYS Consumers clearly anticipate spending more for their golf equipment in 2016 than they did a year ago. However, expectations to buy remain flat to directionally up in most categories. This suggests no abatement in the fierce and tightening battles for market share that we ve seen suggested, and the market has shown for equipment over the past several years. Continued stability for private club membership, as the attrition seen through 2013 looks distant. Slight return to discounting as clubs increase the push to attract younger members and ramp up Junior Programs. Surge in new non-golf family programming of a year ago, returns to 2014 levels. Golfer concerns about the labor market shift consumer confidence to four-year lows. The game is still an oasis, but greater concerns on the macro economy and stresses on resources suggest potential challenges. Golfers still work to manage information overload and time pressures, but the game is a needed escape valve. 18
BACKGROUND, OBJECTIVES AND METHODOLOGY Winter 2016 SLRG Sports Omnibus Assess the attitudes and perceptions of golfers Initiated by Sports and Leisure Research Group in 2009 2016 online survey of over 1,000 golfer respondents Fielded Jan 4-10, 2016 All golfers played a minimum of twice per month, in season 19
TOUR POPULARITY AND FANS: BACK TO THE FUTURE % Indicating More Popular I Watch and Follow Closely 43% 43% 30% 42% PGA TOUR 2013 2014 PGA TOUR 64% 72% 68% 64% LPGA TOUR 14% 19% 29% 19% 2015 2016 LPGA 12% 14% 16% 13% PGA TOUR shows particular strength in the Southern U.S. 20
THE YEAR AHEAD ON TOUR The Tiger era is over, yet the appetite for tournament coverage couldn t be better TOP 3 BOX AGREEMENT I expect Tiger Woods to win a Major in 2016 4% 18% 41% The inclusion of golf in the Olympics will diminish excitement surrounding the Ryder Cup and President's Cup 17% 13% 11% 2014 There's too much golf on television 2% 2% 1% 2015 2016 21
PARTICIPATION/SPENDING TRENDS: AN UPTICK IN STORE? Expectations Remain High With Slight Spike In Those Playing and Spending More Do you expect to/did you actually play the same amount or more in? Do you expect to spend the same amount or more next year? Expected Actual 95% 96% 97% 97% 79% 81% 81% More 24% More 33% Same 56% Same 48% 77% 78% 78% 80% 32% 28% 27% 33% MORE 2013 2014 2015 2016 2013 2014 2015 2016 22
WHY GOLFERS ARE PLAYING MORE Playing Partners and Game Improvement Still Drive One's Ability to "Find Time, Though Meaningful Drops Among 2015 s Top Two 43% 44% 43% 36% 28% 33% 23% 31% 34% 29% 31% Modest increase in those who are playing more with their families in 2016 12% 9% 8% 3% I have more golf partners to play with Family obligations have decreased My game has improved I'm playing more business golf 2013 2014 2015 2016 23
STEMMING THE TIDE IN CONFIDENCE REGARDING PARTICIPATION GROWTH Agreement with statement: The game of golf is facing major challenges in regards to growing overall participation Median Disagree Agreement: Disagree 11% 8 of 10 15% 15% Neutral Strongly Neutral 13% Agree Agree 15% Neutral Strongly 40% 18% 44% Agree Agree 57% 19% Agree Agree 27% 27% Neutral 14% Agree 26% Disagree 11% Strongly Agree 50% Median Agreement: 7 of 10 Agreement: 76% 2015 2016 Agreement: 76% 24
PERCEPTIONS ON NEW EQUIPMENT PURCHASING Consistency Rules The Day, but Does 2016 Need A Jolt In Fulfilled Game Improvement Through Innovation? TOP THREE BOX AGREEMENT AGREEMENT WITH FOLLOWING STATEMENTS: 2013 % 2014 % 2015 % 2016 % New golf equipment continues to become more technologically innovative every year Buying new golf equipment has become a more complicated process in recent years Buying the right new golf equipment can help me to immediately improve my game I've found one brand of golf equipment that I plan to stick with, when I make my next purchase I won't buy new golf equipment without trying it out first on the golf course 59 54 52 53 35 37 36 36 29 27 27 25 26 24 24 23 22 24 22 22 25
GOLF PURCHASING TRENDS As evidenced elsewhere in this year s study, consumers clearly recognized less rampant discounting. This may have held many back from the market in 2015. Consumers clearly anticipate spending more for their golf equipment in 2016 than they did a year ago. However, expectations to buy remain flat to directionally up in most categories. Higher per capita spending anticipated in 10 of 11 categories would be a welcome sign after actual 2015 reported spending was up relative to reported pre-season expectations in only golf bags. This suggests continued battles for market share, as we ve seen over the past several years. Combining the above trends with a reported increase in shopping activity at sporting goods retail, and macro economic concerns points to a heightened premium placed on brands that can evoke value in the year ahead. 26
KEY YEAR-OVER-YEAR TRENDS Category Purchasing: 2015 vs. 2014 Decreases in % Actually Purchasing Drivers Golf Bags Fairway metals/hybrids Irons 2016 vs. 2015 Directional Purchase Expectation Increases Irons Drivers Fairway metals Wedges 27
KEY YEAR-OVER-YEAR TRENDS Per Cap Price Achievement: Reported 2015 Per Cap Dollars spent higher than expected for 2015 Golf Bags Reported 2015 Per Cap Price Achievement Increases Over YAG Hybrids (+10%) Golf Bags (+13%) Expected 2016 Per Cap Spending up over Actual 2015 Per Cap Spending in 10 of 11 Measured Categories Up >5%: Drivers Fairways Hybrids Irons Wedges Putters Up 3-5%: Golf Balls Replacement Grips Golf Bags Golf Shoes Only Apparel sees expected 2016 spending decrease relative to reported 2015 per cap spending 28
OVERALL SPENDING EXPECTATIONS ON GOLF EQUIPMENT SHOW PROMISE Q Overall, compared to 2015 do you expect that your 2016 total golf-related spending for equipment and apparel will be? Less 20% More 33% The Same Amount 48% Same/More 81% 29
RETAIL DECISION DRIVERS REMAIN FOCUSED ON SERVICE AND PRODUCT QUALITY, WHILE THE DEAL CULTURE HAS DIMINISHED TOP 3 BOX AGREEMENT Quality service can make the ultimate difference in what I buy 67% 63% 62% 61% If I see something I like, I don't worry about the price 19% 20% 20% 20% Purchase decisions for me are more about substance than about style 65% 67% 66% 68% There are so many good deals these days, that I rarely ever pay full price anymore 37% 41% 39% 35% 2013 2014 2015 2016 30
RETAIL PREFERENCE: GROWTH IN SPORTING GOODS CHANNEL Q Where are you most likely to make your next golf equipment purchase? 38% 39% 37% 37% 23% 21% 21% 17% 20% 21% 25% 17% 14% 13% 15% 13% Winter 2013 Winter 2014 Winter 2015 Winter 2016 Off-Course Specialty Sporting Goods Retail Over the Internet Green Grass Off-Course specialty is particularly resonant with the under age 35 set and mid level handicappers, while Green Grass shops remain mainstays of private club golfers. 31
SOME SKITTISHNESS ABOUT THE ECONOMY RETURNS IN AN ELECTION YEAR Fall in short term optimism, throws caution at other indicators that continue to show strength TOP 3 BOX AGREEMENT 44% 47% 58% 53% 56% 55% 51% 51% 44% 46% 46% 33% 30% 33% 29% 29% I plan to continue working even in retirement I invest so I can retire early This year will be a better year for me than last year I plan to spend actively on useful pastimes, in my retirement 2013 2014 2015 2016 32
GOLFERS OVERALL ECONOMIC OUTLOOK TURNS CAUTIOUS Labor market concerns shift golfer attitudes to four year lows. TOP 3 BOX AGREEMENT 60% 61% 56% 58% 27% 30% 16% 18% 40% 34% 35% 31% 5% 8% 8% 5% There's really no such thing as job security any more We have seen the U.S. unemployment rate reach bottom, and it will add jobs this year I feel better about my financial situation today than I did a year ago People will go back to spending freely on luxuries again this year 2013 2014 2015 2016 33
PRIVATE CLUB MEMBER RETENTION VS. ATTRITION HAS STABILIZED MEMBERSHIP LEVELS OVER THE PAST 3 YEARS Lost Membership Flat or Consistent Gained Membership 2016 2015 2014 2013 Report a loss in membership Report a loss in membership 27% 22% 45% Report a loss in membership Report a loss in membership Report a gain in membership 27% 26% 42% Report a gain in membership Report a gain in membership 26% 35% 39% Report a gain in membership 36% 31% 33% Base: National Sample of Private Club Members 34
PRIVATE CLUBS: PUSH TOWARDS YOUNGER MEMBERS AND JUNIOR GOLF PROGRAMS After one year spike, new non-golf family programming returns to 2014 levels, with slight uptick in discounting. 57% 55% 56% 53% TOP 3 BOX AGREEMENT 42% 35% 28% 26% 39% 40% 41% 39% 38% 34% 31% 27% 26% 26% 24% 24% My club has made concerted efforts to attract younger members in the past few years My club has aggressively reduced the cost of membership to attract new members over recent years My club has been putting more emphasis on junior golf programs recently My club recently instituted a variety of new non-golf programs to attract families My club has been putting more emphasis on women's golf programs recently Mean: 10 point scale Base: National Sample of Private Club Members 2013 2014 2015 2016 35
THE STATE OF PRIVATE CLUBS: THE FINANCIAL HOUSE REMAINS IN ORDER Focus on Evolution has created stability TOP 3 BOX AGREEMENT Private clubs in general, need to make aggressive changes to remain relevant in the coming years My club must make aggressive changes to remain viable in the coming years I'm concerned about the financial stability of my club 39% 40% 40% 39% 36% 31% 26% 27% 58% 56% 60% 57% 2013 2014 2015 2016 Top Three Box on 10 point scale Base: Private Club Members 2016 36
24-7 DEMANDS AND NEWS CYCLE POSE CHALLENGES Golf is still an oasis, but increased strain on resources and economic cautiousness greet the new year TOP 3 BOX AGREEMENT Golfers in 2016 are significantly less likely than a year ago to: Believe that the year ahead will be better than the previous year Feel bullish about their retirement prospects 82% 81% 79% 78% 64% 63% 59% 59% Still the strongest overall agreement among 44 statements 42% 36% 37% 40% 40% 42% 36% 38% 33% 31% 32% 32% We live in an age of constant updates Golf is my personal "oasis" from day-to-day chaos There's too much new technology to keep up with I'm spending more time these days with friends and family, than I did in the past Today there is more of a priority on getting things done more quickly with less resources 2013 2014 2015 2016 37
FINAL THOUGHTS The Market: Micro-Economic Concern Coupled with Higher Expectations for Equipment Pricing: 2016 will continue to be about perceived value as consumers look for a spark in equipment innovation to justify perceived retrenchment from the discounting of recent seasons. Yet Cautious Optimism Rules on the Participation Side: Private Clubs continue to focus on attracting younger members and targeting junior programs, while golfers seek to increase their play amidst heightened insecurity. Online Video Captivates Golf s Best Customers: Objective Content is King: Third party endorsement sparks the legitimacy of popular instruction, equipment and travel video. The Magic Formula: Golfers seek short, simple and customized content, replete with multiple offerings and expert evaluations too. 38