Different Viewing Habits of a New Generation of Content Consumers

The cable television industry will tell you that OTT is a fad, or as a best case, going to simply supplement the existing content-viewing industry. Two years ago I agreed that would probably be the case for at least the next five to ten years, but would soon be a concept that would overtake the cable industry. Old styles of approaching the end user and distributing content are not what the future content consumers are looking for.

The point of this post is to discuss the viewing habits of the current and future generations and how they are being served. Historically, cable was king. If you wanted to access the viewers you needed to share or license content to the cable companies. While there are multiple cable / satellite (who need to be included) companies, they still had a monopoly on how content go to end-users. Families had a television that was hooked up to a cable box and they consumed whatever channels were provided to them. Over time it grew from just a few channels to hundreds, with add-ons and “packages” that made the basic cable package cost over $1,000 a year.

The Internet, while slow to adapt, actually started changing the types of content and the viewing habits of end consumers in the late 90’s. With the advent of Youtube, suddenly videos were able to be viewed by anyone and were no longer being produced just by the major studios. Google saw the value and bought Youtube and subsequently has made billions in advertising revenue in the years to follow the acquisition.

In 2007, another major change came, that once again while not intending to disrupt this industry, it has in a major way. The iPhone was released and while possessing only a few apps in the early stages, it became the medium of choice for a younger generation. TV- connected devices which actually existed before the iPhone followed with Roku, Apple TV, Amazon Fire TV, as well as gaming consoles like Xbox. The main cable alternatives like Netflix, hulu, crackle, and others led the way, each wanting to gain direct access to the users.

The chart shows changes coming. And those changes are coming not because of innovations, but because of a new generation of content consumers being raised in a space that includes alternatives to cable tv subscriptions.

Currently the OTT space is growing. Roku has over 4,000 apps and each of the platforms is working to increase the number of apps and types of content. The typical solutions are already there or close; those are ESPN, Netflix, or CBS. But, there are new ones coming to the space that are going to be less known, and still have thousands of users. These niche content creators are going to change the world of content consumption forever. Right now, it seems as if the main distribution companies don’t understand.

Over the past couple of years the shift to streaming has been recognized and while it is often viewed as “cord cutters”, I think it has more to do with “cord nevers”. The latter has become a cliche term for the digital generation that chooses their smart phones or connected televisions as a means to content consumption as opposed to cable .

To date the cable industry has seen a little over 700,000 subscribers cancel. That may sound like a large number, but it equals slight less than 2% of the total subscriber base. This trend has continued but each year only a small percentage of cable users have cut the cord.

The real source of fear in the cable industry should be in those under the age of 35. I, like many of my peers, cut the cord years ago. Those that are a few years younger than me have never had cable. While we as non-cable users are currently only a portion of the possible cable subscribers, what happens in ten years or fifty years when we make up the vast majority of eligible subscribers. The cable industry will need to adjust, and personally, the skinny bundles aren’t the solution.

The chart here shows the real power of the anti-cable movement. What isn’t shown is the connected devices, which I believe would make these numbers look even worse for those that believe cable still has a place in the future.

In conclusion, the world of content is changing and nothing is having a larger impact on that then the new mediums with which to ingest it in conjunction with a younger generation that wasn’t born watching cable tv. As content creators scramble to find the best way to access and monetize their audience the cable companies are trying their best to answer their needs, but in most instances not finding success.

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