The writing is on the wall for online TV to be the predominant way humans consume video content. It truly is only a matter of time. Some countries, like parts of Asia and Europe, are much farther along in this transition as content providers there increasingly offer their full suite of content options to be streamed over the internet to the hardware of choice by their subscribers. That will eventually be the reality here in the US as well as generations of consumers demand content on their schedule. It will not happen overnight but it will happen. And, as the following charts will show you, it will be driven by the younger generations.
When you look at the percentage of consumers, by age, who say they consume some form of linear TV and some form of online TV daily, we see the following pattern.
This chart represents a visualizaiton of my concept of behavioural debt. Some demographics are simply comfortable doing things the way they have always done them, where other generations, with fewer years of behavioral debt stored up, are more open to change as this change more accurately fits thier lifestyle. There are so many different data points I could show that would have the similar pattern as in this chart. Younger demographics’ openness and willingness to adapt and adopt new technologies is creating a gap between themselves and the generations that precede them. What needs to be pointed out in this data is how Gen X seems to fill the gap in this transition. However, Gen X is only estimated to be around 50 million people in the US, where as millenials are well over 90m, depending on whose estimates you like. Either way, while Gen X has some traits of boomers and some traits of millenials, the size difference is signifant and shows us where the balance of power lies. As Mark Lowenstein pointed out, boomers are no slouch in size (roughly 80m in the US) and they still maintain a large financial power as they have much more disposable income than millenials on average. This is one reason we see such a high disparity still today in the ad spend on traditional TV — the most valuable baby boomer generation still consumes their content via TV. As I said, that will someday change, but we have to understand the real habits of these demographics during this shift.
Similarly, the pattern holds when we look at time spent per day on each medium broken out by demographic.
Here we still see the behavioural divide of the young and old demographics as the trend line continues away from linear TV to streaming/online TV and video content. To be clear, linear TV today still has the edge in time and overall consumption. However, that is because many of the Pay-TV services have not yet fully embraced over the top delivery of that content. It seems every year, providers get closer to allowing their subscription content to be consumed on any hardware the consumer wants. If we look back on YoY trends in linear TV, we see the trendline slowly climbing upward. As the Pay-TV providers offer their subscription services holistically, including live sports and other live content, I’m certain we will see that line go up more quickly. Again, it is only a matter of time. When, not if, is the central question.