Monthly Archives: March 2012

Online Video – Who is Buying?

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Online video is an evolving new business for content creators.  Most video on the Internet is free.  It may be supported by advertising, but the consumer does not have to pay in order to consume it other than with time.  There are many companies, though, who charge for their content.  Content owners, of course, want to make money on their content – and if they get direct revenue for it, that is what they prefer.  There are few business models for online video today.

The first business model is video-on-demand.  This is where a consumer pays to rent a piece of content for a limited amount of time, typically 24-48 hours.  The content is usually downloaded on to a device, but it could be streamed as well.  Companies using this model include Amazon and Apple.  The second business model is subscription.  This is where a consumer pays a set price per month to watch all of the content he or she wants.  Companies using this model include Netflix and Hulu.  The third business model is download-to-own.  This is where a consumer purchases a digital copy of a piece of content and downloads it to their device.  Companies that use this model include Apple.

Consumers in some part of the country are willing to pay more than others.  Combing the revenues for the three business models mentioned above, we can analyze who spends and where they live.  Consumers on the coast of California, living in and arond Chicago, and on the east coast are more likely to pay more for online video than consumers in other parts of the country.

The zip codes where people are, on average, willing to spend the most per resident are:

  • 07078 – Short Hills, NJ
  • 22066 – Great Falls, VA
  • 10007 – New York, NY
  • 10514 – Chappaqua, NY
  • 60043 – Kenilworth, IL

Residents in each of these areas spend $4.57 or more per resident per year for streaming and downloading video.

Another method of looking at consumers is through tapestry segmentation.  Esri, a geographic information systems company which also does data analysis, developed a tapestry segmentation that classifies US residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics.

A recent analysis of online video viewers (both those who did and did not pay) found that the segment that has the biggest presence in the top online video viewers are Dorms to Diplomas, Metro Renters, Laptops and Lattes, Trendsetters, and Military Proximity residents.  Residents of these segments, though, are not as willing as others to pay for online video.  For example almost no segments where Dorms to Diplomas residents are dominant have an online video spend index of 200 or more.  That means this group is willing to watch online – if it’s free.

Residents of Top Rung are willing to pay for online video.  Over 99% of the census block groups dominated by this segment have an average of at least $2.72 spent on online video per resident per year – and many have much more.  This is twice the average American household.  This is clearly a segment to target.  Connoisseurs are also willing to spend.  Over 73% of the census block groups where that segment is dominant is willing to spend at least $2.72.

Who are the residents in these lucrative segments for online video?   Residents of Top Rung neighborhoods are mature, married, highly educated, and wealthy. The median age is 44.2 years and the median household income is $182,041.

Lifemodes and Urbanization can also be used to classify consumers.  Segments within a LifeMode group share an experience such as being born in the same period or a trait such as affluence. Urbanization groups share a locale, from the urban canyons of the largest cities to the rural lanes of villages or farms.  High Society (one of the LifeMode segments) residents are willing to pay for online video.  Over 80.5% of census block groups where this tapestry segment is dominant have residents who, on average, spend $2 or more per year on online video.  This information can be used to help inform companies on who and where to target their services.

More information about Esri’s tapestry segmentation can be found at http://www.esri.com/data/esri_data/tapestry.html or to learn more about Esri in general, go to www.esri.com.

Gym Membership – Who Actually Works Out?

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According to the International Health, Racquet & Sportsclub Association (www.ihrsa.org), 50.2 million Americans held gym memberships at 29,890 clubs throughout the United States in 2010.  How active are these members?

Not every gym member visits their gym every day – or every week – or month – or at all.  Gyms have smartly figured out that many people pay for memberships but don’t attend too often. Who, though, are the people that do go to the gym at least twice per week and where do they live?  What do we know about them?

People living cities – especially on the east and west but also in areas around the Great Lakes are the ones most likely to attend the gym at least 2+ times per week.  The chart below shows two things.  The first is the index, by zip code, of those that attend the gym 2+ times per week.  An area with an index of 150 means they are 1.5 times more likely than the average American to attend the gym at least twice per week.  Well Above Average is defined as 150 or higher.

The second thing the chart shows is the number of adults that attend the gym at least twice per week by CBSA.  A CBSA (Core Based Statistical Area) is a US geographic area defined by the Office of Management and Budget based around an urban center of at least 10,000 people and adjacent areas that are socioeconomically tied to the urban center.  The bigger the circle in a CBSA, the higher the number of adults that attend the gym at least twice per week.  Some areas may have people who are huge gym goers, but have a small population.  Other areas have large population but don’t have people who go to the gym.

Knowing where regular gym goers are by location is important to companies wanting to target them, but knowing who are they is important as well.  Esri, a geographic information systems company which also does data analysis, developed a tapestry segmentation that classifies US residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics.

Residents of Metro Renters and Laptops and Lattes residents are voracious users of gyms.  Census block groups where those tapestry segments are dominant have an index of 200 or more.  This means that a consumer living in those neighborhoods is at least 2 times more likely to attend a gym twice per month than the average American.  Metro Renters are young, educated singles just beginning their professional careers in some of the largest US cities.  Residents of Laptops and Lattes neighborhoods enjoy single life in the big city and have a median household income of $84,612.

Lifemodes and Urbanization can also be used to classify consumers.  Segments within a LifeMode group share an experience such as being born in the same period or a trait such as affluence.   The Solo Acts Lifemode has populations that are a large part of the active gym crowd – likely because many are single living in cities.

Urbanization groups share a locale, from the urban canyons of the largest cities to the rural lanes of villages or farms.  The Urbanization population that has the largest active gym crowd is Principal Urban Cities I.  Residents of this group are affluent and found in the county’s largest metropolitan areas.


More information about Esri’s tapestry segmentation can be found at http://www.esri.com/data/esri_data/tapestry.html or to learn more about Esri in general, go to www.esri.com.