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OTT Video: It's a Generational Thing

12 Aug, 2015 By: Erik Gruenwedel

As Baby Boomers embrace middle age and beyond, the future of pay-TV hangs in the balance. That’s because succeeding demos raised on the Internet and social media are indeed eschewing the status quo when it comes to consuming video entertainment.

Indeed, the top pay-TV services in the United States lost more than 400,000 combined video subscribers in the most-recent fiscal quarter, according to research firm Informativ.

Separate from Horowitz Research found that nearly 50% of weekly video viewing among respondents aged 18-34 is done online. Comparatively, among respondents above the age of 50, just 11% of video consumption is done online.

The May online survey involved 1,568 broadband users 18 and above.

Among Millennials, the largely broadband-only demo reaching adulthood around the year 2000, 75% have access to over-the-top video services such as Netflix, Hulu Plus, or Amazon Prime Instant Video. Millennials are three times as likely to have a SVOD service and no pay-TV.

“For many, streaming video has become an integral part of the viewing lifestyle. The idea of an Internet TV service, at a lower price point and with more customizable options, is an attractive prospect,” Adriana Waterston, SVP of insights and strategy with Horowitz, said in a statement.

That trend apparently isn't different for kids under 18, 54% of whom stream TV content on a weekly basis - ahead of video games, dramas and reality TV, according to Pricewaterhousecoopers.

Not so much among some Boomers, however.

Jan D., a doctor in Savannah, Ga., was spending more than $300 a month for pay-TV, telephone and Internet. When asked why she paid for a seldom-used phone landline and watched just three channels (NBC, Lifetime, Tennis Channel), the 52-year-old single mother of two college students said the thought of calling Comcast to downsize service was daunting.

“I know … seems like a waste,” she exclaimed.

A subsequent call to Comcast replaced Jan’s set-top boxes to cloud-based units and cut the cable bill to $180, which required dropping premium channels HBO and Showtime. That didn’t sit well with her kids, who, when they aren’t buried in their smartphones, usually stream Netflix — paid for by their mother — or HBO Go using a borrowed account.

Indeed, 55% of Millennials who are also multichannel subscribers said that if the price were right they would subscribe to an Internet TV service (Sling TV, PlayStation Vue, etc.) instead of their current pay-TV service, according to Horowitz.

To Peri G., a sophomore at University of Michigan, pay-TV is becoming as dated as packaged media. As an empty DVD screening room in her dorm attests, most students stream video on laptops, phones or connected TVs in their rooms. To the 20-year-old, streaming video is as natural as turning on network TV is to her mother.

“Netflix changed everything,” Peri said.

About the Author: Erik Gruenwedel

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