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What Millennials Want Fro M Tv W HAT M ILLENNIALS W ANT F RO M TV Author: Colin Dixon, Founder and Chief Analyst, nScreenMedia | Date: Q3 2014 www.nScreenMedia.com This paper is made possible by the generous contribution of: Introduction After years of growth the pay television industry has Stalwarts of the industry are confident that they will hit a plateau. In the US, while the pundits argue about win the millennial consumer’s business. Jeff Bewkes, small gains and losses, the core number of households Time Warner Inc. CEO, said recently, “Once they with pay television has been stuck at about a hundred <millennials> take the mattress and get it off the floor, million for the last few years. In the UK, it is the same that’s when they subscribe to TV.” 1 Is he right, as story. Sky, the leading pay-TV provider in the UK, has millennials age will they subscribe to pay television, struggled to continue growth beyond 10.5 million just as their parents did? Unfortunately, there is homes. evidence that attracting the young customer is harder than it has ever been before. Though the overall number of subscribers may not be changing, operators must work very hard just to keep This paper will examine the dimensions of the those that they have today. In this daily battle for problems facing operators in attracting millennial customers, one of the most important age groups for consumers. It will look at the increasingly important operators to focus on is the 18 to 29-year-olds, the so- role of social media in the video experience, called millennial generation. For the industry to particularly for the young. Finally, it will suggest sustain long-term health, winning the millennials as specific steps that operators can take now to begin to customers is essential. Recapturing their business as bring television back into the conversation. they leave behind their parents pay-TV subscription is the only way to maintain subscriber numbers, and in the long run, grow them. What Millennials Want From TV Page 2 Millennials behave differently Young people have media options available to them is 11% below the average ownership and 14% lower today that were unimaginable to their parents and than the 30-49 year olds. This substantial difference is grandparents. Whether it be watching YouTube probably due to the 19% that have never subscribed originals, playing online to the service, since cancellation games, watching movies on rates amongst millennials are Of the 19% of millennials that have a smartphone or reading identical to the 30-49 year a book on a Kindle Fire. never subscribed to pay-TV service, olds. 3 In general, they embrace just 2% say they are considering And it is with the 19% that have them all. subscribing in the next three months. never subscribed to service that However, one area that may operators have the biggest be a problem is traditional challenge. Just 2% of that group media. They put considerably less stock by pay-TV say they are considering subscribing in the next three than the rest of the population. Just 63% of 18-29 year months. 4 olds with broadband report also having pay-TV. 2 That Pay-TV Subscription Status by Age Group 50+ 78% 14% 8% (n=364) 30-49 77% 18% 5% Millennials 63% 18% 19% © nScreenMedia, 2014 Average 74% 16% 10% (n=1000) Current subscriber Cancelled service Never subscribed Figure 1 Pay-TV subscription status by age group What Millennials Want From TV Page 3 Making TV Part of the Conversation If there is one thing millennials love to do it’s talk. And There is plenty of evidence that tweeting about what social media is almost the perfect forum for them, with a viewer is watching is not the exclusive domain of 72% saying Facebook is their platform of choice. Even millennials. One out of six times someone in the US the bathroom is not sacrosanct. Twice as many 18-24 watches primetime TV, they are using social media. year olds (40%) use Facebook in the bathroom than And there is a strong gender bias among people that the general population. 5 tweet or post while watching: 58% are women and 42% men. 9 For those that are already television viewers, social media is a critical part of the entertainment experience. 48% of American millennials use social media while watching television, compared to 26% of the 31 to 47 year- olds. 6 According to Twitter, 70% enjoy reading tweets while tracking a live event on TV. 7 The addiction is not confined to North America. 24% of UK 18-24 year olds that watch TV and have Twitter almost always use it to chat about what they are watching, versus 16% of the average. 20% use their Facebook account. The data shows that the conversation about and Some have narrowed their focus to take advantage of around what many millennials watch is part of the what appears to be the biggest group of social video experience. Online video viewers; millennial women. Zeebox, a pioneering app providers recognize that to bringing together a TV guide, really engage an audience, “People are part of the stories. They synchronized second screen TV experiences and social social has to be part of the want to be talked with, not talked at. experience. As Roy Sekoff, media, recently rebranded to When they go back and look at cable head of HuffPost Live, put it: become Beamly. Anthony “People are part of the stories. they wonder why they can’t engage.” Rose, CTO and co-founder, They want to be talked with, Roy Sekoff, Head of HuffPost Live said of his intended audience: not talked at. When they go “Since almost two thirds of back and look at cable they our users are now female, and wonder why they can’t engage.” 8 the 16-24 age bracket is our core, the new Beamly brand captures the zeitgeist of these millennials perfectly.” 10 What Millennials Want From TV Page 4 How Social Is Changing the Video Experience The conversation that is taking place around television are approaching TV numbers. In 2011, Nielsen Media today is an increasingly vital part of the entertainment Research reported the monthly cumulative audience for many. To appreciate the importance, consider that for the top three cable news networks. Though the bar it is now possible to replay the social conversation was set somewhat higher than the average viewership around a show after it has aired. Tomorrowish bills reported by HPL (Nielsen only counted people itself as the first social media DVR, and allows users watching for an hour or more in the month), the watching a program on-demand to synchronize the audience’s size was very close to television. CNN original social stream with their viewing. Tweets attracted 41.7M unique monthly viewers, Fox News posted during the original airing appear to the 41M and MSNBC 36.9M. 13 Tomorrowish user at precisely the same point in the program that they are watching. A user can even filter the social stream to include only the most popular tweets and Facebook posts. Tomorrowish shows that for many the conversation around a TV show is as vital as the show itself. However, for certain content types, social media is changing the experience of video entirely. Rather than simply cultivating the conversation around the video, the content provider is making the social experience a part of it. HuffPost Live (HPL) was conceived with exactly that idea in mind. In some respects it is the essential ingredient, according to Others are also tapping into the opinions of the Roy Sekoff: “Obviously you can make a difference in audience to shape the content. Comedy Central editorial approach, but that is the thing we hit on fairly launched CC: Social Scene on its YouTube channel. It’s early, to give people a seat at the table.” 11 The service a sketch comedy show where viewers suggest topics makes direct use of the audiences input to shape the via Twitter for comedians to use in skits. 14 conversations taking place. Any viewer can record a video comment simply by pushing the “Be an On-Air These services not only show the commitment to Guest” button that is front and center on the home social media as part of the experience, but also the real page. Here viewers can submit their video comments power of the social platform when combined with and questions. These are reviewed by producers at video. Binding social with video creates a live HPL and the most appropriate are experience that for many is more engaging, more vital included in the broadcast. than either of the media apart. Binding social with video creates a It is this experience that The approach appears to be traditional TV providers need working. Mr. Sekoff said that HPL live experience that for many is to embrace if they are to make has attracted 1.3B views with an more engaging, more vital than progress with millennials. average of 22M monthly unique either of the media apart. viewers watching for, on average, 18 minutes each. 12 These results What Millennials Want From TV Page 5 TV Needs an Update Pay-TV operators, as the integrator and provider of much of the TV watched in developed markets, have an opportunity to bring social media more directly into the experience than any individual broadcaster or provider. Here are some steps that operators can take now to re-energize the TV experience. Partner with 2nd Screen TV App providers The simplest approach is to work with existing 2nd Partnering with app providers is a good first step, but Screen TV App providers.
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