Why the TV Industry Fears a Spread of Millennials’ Viewing Habits (Guest Blog)
Younger consumers’ reliance on Netflix and the Internet have television companies freaking out — but there is hope
Dan SchechterGuest Writer | April 20, 2016 @ 8:30 AM
American consumers’ TV-watching habits have changed drastically in the past five years. Not only are viewers time shifting their watching (e.g., DVRing), causing shows’ ratings to decline, but they are also subscribing to Netflix and other “over-the-top” (OTT) streaming services that offer more programming than a person could ever watch in a lifetime.
Just how big of a problem is all this for the TV industry?
L.E.K. Consulting conducted proprietary research late last year to answer this question and to determine what the industry needs to do not only to survive but also to grow.
First, the good news. Despite changes in American consumers’ TV-viewing habits, traditional TV is still the form they view most, now accounting for 25 percent of media consumption. OTT video, which consists of paid OTT (e.g., Netflix) and free OTT (e.g., YouTube), accounts for just 13 percent of consumption. The majority of OTT consumption is via subscription video on demand (SVOD), which comprises mainly Netflix and a few other services. Interestingly, non-video Internet usage (e.g., Facebook, Twitter) accounts for 20 percent of consumption, more than 1.5 times video OTT consumption.
Companies have worried about the rising popularity of user-generated content, including by YouTube and Vine personalities, but such content has not been as big a threat as once feared. Americans still prefer professional SVOD content (e.g., Netflix, Hulu, Amazon Prime Video) to user-generated content (e.g., PewDiePie’s YouTube antics or Thomas Sanders’ Vine shenanigans).
Another major category likely contributing to TV’s declining popularity is gaming, which now accounts for almost 10 percent of time spent consuming media. Console gaming and PC gaming make up roughly two-thirds of that share, thanks in large part to Fallout 4 marathon sessions. Mobile gaming accounts for the other third. See below for the details:
Now, the bad news. Traditional TV is king for Americans as a whole, but that is not the case for all age groups. Our research shows that millennials (age 18-35) watch significantly less traditional TV than do older non-millennials. Non-millennials (those over 35) watch almost 2.5 times more traditional TV than millennials do (32 percent vs. 13 percent).
Rather than watch TV, millennials are much more active with OTT services, spending 20 percent of their media consumption on OTT services (vs. just 9 percent for older non-millennials) and 12 percent on video games (vs. 7 percent for older non-millennials; apparently Candy Crush is still quite popular with boomers).
The graphic below shows the shocking differences between the amounts of time these groups spend consuming various media types:
These statistics confirm TV companies’ fear that their large audience today will melt away as millennials account for an ever-increasing share of the population. Furthermore, TV companies worry about the “zombie scenario,” in which millennials “infect” older non-millennials with their new watching habits.
Could “Doomsday” be around the corner? Is a “Zombie Apocalypse” possible?
We can look to the music industry’s transition as a cautionary tale, given that its revenues have dropped precipitously — about 5 percent per year over the past 15 years — since the advent of Napster and other online music-sharing services:
If the TV industry mirrors the music industry, TV companies could be in serious trouble. But TV companies are learning from the music industry’s experience, so they do not have to end up in nearly as bad shape. TV companies are changing the way they operate – not content to simply play defense, they are actively playing offense in order to make more money in the new world of media consumption.
Over the next few weeks, we will dive deeper into the TV ecosystem to better understand what has spurred changes in consumption, how advertisers are reacting to TV’s struggles and how TV companies can prosper. Tune in for more next week — same Bat-time, same Bat-channel.
55 First Looks at New and Returning 2016 TV Shows (Exclusive Photos)
"Galavant" (ABC): ABC's quirky musical comedy is back for even more absurdity, with a meta first episode titled "A New Season aka Suck It Cancellation Bear."
"Cooper Barrett's Guide to Surviving Life" (Fox): The single-camera comedy from creator Jay Lacopo looks at the lives of young people straight out of college.
“Bordertown” (Fox): Two families become embroiled in romance, conflict and friendship in this new animated comedy from “Family Guy” writer Mark Hentemann and executive produced by Seth MacFarlane.
“The Bachelor” (ABC): The 20th season of the popular dating reality show sees Ben Higgins, who was rejected by the latest “Bachelorette” Kaitlyn, as the newest single catch fending off and deciding between twenty-one new contestants.
"The Biggest Loser" (NBC): The reality weight loss competition is back for more bootcamp style transformations, welcoming new host Bob Harper to the gym.
"New Girl" (Fox): Jess will have "jury duty" for about five episodes as Zooey Deschanel makes room for Megan Fox, but she'll stick around long enough to see Schmidt plan his wedding to Cece.
"Teen Wolf" (MTV): Scott and Stiles will have to put aside their differences when MTV's hit series returns for the second half of Season 5. Stiles' dad, the Sheriff, is still in grave danger, and there's tons of new mysteries to solve. BFF drama can wait.
"The Shannara Chronicles" (MTV): The home of "Teen Wolf" dives deep into high fantasy with this adaptation of Terry Brooks' bestselling series of YA novels. Young heroes are tested as the dying Ellcrys tree inflects deadly demons upon the earth.
"Mike and Molly" (CBS): Melissa McCarthy returns for one final season of CBS' hit sitcom. The shortened 13-episode final season was announced by co-star Rondi Reeds, prompting McCarthy to share via Twitter that she too was "shocked and heartbroken" upon learning of the cancellation.
"American Crime" (ABC): John Ridley's anthology drama returns for a second season and a brand new story, this time involving an accusation of rape on a college campus.
"It's Always Sunny in Philadelphia" (FXX): Mac, Dennis, Dee and Charlie are in for more shenanigans at Paddy's in the eleventh season of the hit comedy.
“Shades of Blue” (NBC): Jennifer Lopez makes a rare return to scripted television in this event series, also starring Ray Liotta, about a group of tough Brooklyn cops who are not afraid to sometimes step outside the confines of the law in order to protect their city.
“Angel From Hell” (CBS): The network's newest sitcom follows Jane Lynch as Amy, a colorful, brassy woman who insinuates herself into Allison's (Maggie Lawson) organized and seemingly perfect life, claiming to be her "guardian angel."
"Shameless" (Showtime): Frank discovers religion on Season 6 of Showtime's popular dark family dramedy following the Gallaghers. The new season finds the scrappy family struggling with change and the possibility of growing apart.
"Pretty Little Liars" (ABC Family): The mystery of "A" has been solved and t's five years later for Aria, Hanna, Spencer, Emily and Alison, but danger is not far behind. Cheers to Season 6B!
"Shadowhunters" (ABC Family): Cassandra Clare's bestselling YA novels get a makeover adaptation in this series about Clary Fray, who discovers she's destined to be a protector of the human race from demons that lurk around every corner.
"Second Chance" (Fox): Formerly known as "The Frankenstein Code," then "Lookinglass," Fox's newest science fiction drama is about a morally corrupt cop who's brought back to life decades later in a newer, younger, stronger body - and the consequences of that.
"Younger" (TV Land): Season 2 of TVLand's dramedy starring Sutton Foster sees Liza navigating choppier romantic waters with Josh and Charles, as well as the return of her daughter Caitlin.
(Special back to back 2-episode Season 2 premiere episode airs Wednesday, Jan. 13 at 10 p.m. ET)
"Teachers" (TV Land): This teachers-behaving-badly comedy is based on the popular web series of the same name, also written by and starring six members of the improv group Katydids.
(Premieres Wednesday, Jan. 13 at 11 p.m. ET, regularly airs Wednesdays at 10:30 p.m.)
TV Land
"Colony" (USA) A drama about life in Los Angeles during an occupation by aliens reunites star Josh Holloway and executive producer Carlton Cuse, who worked together on "Lost."
"Billions" (Showtime): The network's newest drama stars Damian Lewis and Paul Giamatti as two powerful men who blur the lines between good and evil in their rivalry.
"DC's Legends of Tomorrow" (The CW): Heroes and villains of "Arrow" and "The Flash" team up to travel through time and take down an immortal villain, Vandal Savage, who just may conquer the planet should they fail in their mission.
"The 100" (The CW): The third season of the post-apocalyptic drama picks up three months after the catastrophic events of the Season 2 finale. Clarke is on the run and in danger, and Bellamy is trying to hold things together back at Camp Jaha. And a certain AI is still out there somewhere with a warhead that could destroy what's left of humanity.
“Baskets” (FX): Zach Galifianakis stars in this new comedy as Chip Baskets, who sets out to conquer his dream of becoming a professional clown. Flunking out of a prestigious Paris clown school, Chip finds himself working at a local rodeo in Bakersfield, CA instead.
"Black Sails" (Starz): Toby Stephens is back as Captain Flint as Season 3 of Starz's pirate adventure drama takes on the battle for Nassau. This season will also introduce Ray Stevenson as Blackbeard.
"The X-Files" (Fox): Mulder and Scully are back to give it one last shot at solving the mystery of aliens and government cover-ups. But they'll have time for a side case or two, as most episodes of the revival event series will feature standalone stories.
"Lucifer" (Fox): The latest DC comic book adaptation sees the devil himself doing some good. Lucifer, bored with hell, moves to Los Angeles (where else) and teams up with an LAPD detective to solve crimes. "Gotham" crossover anyone?
"The Fosters" (ABC Family): The third season of the acclaimed blended family series sees everyone settling into a new dynamic now that Callie is permanently adopted, while medical problems, secrets and relationship drama threaten everyone's happiness.
"Recovery Road" (ABC Family): Teenage drinking has serious consequences on ABC Family's latest drama, which features a high school student who is forced into rehab or risk expulsion.
“Suits” (USA): The second half of Season 5 returns to see the repurcussions of Mike behind bars, five seasons of lies and deception finally caught up to him. But don’t expect the mystery of who turned him in to be solved right away. The Patrick J. Adams-led drama has already been renewed for a sixth season.
"Grease Live" (Fox): The live musical event obsession continues, and now Fox is getting into the fun with a live production of "Grease," starring Aaron Tveit as Danny and Julianne Hough as Sandy.
“The People v O.J. Simpson: American Crime Story” (FX): Ryan Murphy takes his anthology series prowess to dramatically retell the Trial of the Century, following the murder of Nicole Brown Simpson and subsequent trial of former NFL star O.J. Simpson. Cuba Gooding Jr. plays Simpson, with Sarah Paulson, John Travolta, David Schwimmer and more starring.
"Vinyl" (HBO): Bobby Cannavale plays a record executive in the 1970s who's searching for the next life-changing sound and band. Terrence Winter, Martin Scorsese and Mick Jagger are EPs.
"11/22/63" (Hulu): A schoolteacher, Jake Epping, discovers he can travel back in time - and decides to try to stop the JFK assassination. The 10-hour adaptation of Stephen King novel stars James Franco.
(Premieres at midnight on President's Day, Feb. 15)
"Better Call Saul" (AMC): Jimmy McGill continues his journey to becoming Walter White's lawyer Saul Goodman in Season 2 of the hit "Breaking Bad' spinoff series.
"Vikings" (History): The cable network bolstered its hit action series, adding four episodes to the fourth season of the Travis Fimmel-led show. The first 10 episodes air in February, with another 10 set for later in 2016.
“Criminal Minds: Beyond Borders” (CBS): The latest “Criminal Minds” series follows the International Repsonse Unit, the FBI division which is tasked with solving crimes and coming to the rescue of Americans who find themselves in danger while abroad.
“Of Kings and Prophets” (ABC): The Ray Winstone drama is described as an epic biblical saga of faith, ambition and betrayal as told through the eyes of the battle-weary King Saul, the resentful prophet Samuel and the resourceful young shepherd David — all on a collision course with destiny that will change the world.
"Underground" (WGN America): The 10-part miniseries is described as a pulse-pounding journey with revolutionaries of the Underground Railroad and tells the unflinching story of a group of courageous men and women who band together for the fight of their lives – for their families, their future and their freedom.
(Premieres Wednesday, Mar. 9)
WGN America
"The Catch" (ABC): ABC’s latest Shondaland drama stars Mireille Enos as a fraud expert who finds herself being conned, by her own fiance, who’s been working with his real lover in stealing all her money. This one underwent a bit of a makeover with the recasting of two of its leads. Peter Krause and Sonya Walger replaced Damon Dayoub and Bethany Joy Lenz, respectively.
"Hap and Leonard" (Sundance TV): Based on the series of stories by Joe Lansdale, this anthology series follows the adventures of best friends Hap Collins and Leonard Pine. The two are chronically single, perpetually broke and guided by an old fashioned sense of honor and morality – but the similarities end there.
(Premieres in March on Sundance TV)
Sundance TV
"Jackie Robinson" (PBS): The two-part Ken Burns documentary explores the life of the Brooklyn Dodgers legend who broke baseball's color barrier.
"Hunters" (Syfy): Based on Whitley Strieber’s best-selling novel "Alien Hunter," Syfy's latest comes from "Walking Dead's" Gale Ann Hurd and follows an FBI agent on the trail of a shadowy terrorist organization, who may or may not be from this world.
"12 Monkeys" (Syfy): Cole and Cassie do more time traveling and end up in the 1940s for at least some amount of time in Season 2 of Syfy's adaptation of the film of the same name - though the series is decidedly its own thing at this point.
"Outlander" (Starz): Jamie and Claire travel to France in Season 2 of the popular Diana Gabaldon adaptation, where they will try to change history and maybe raise a baby at the same time.
"Containment" (The CW): "The Vampire Diaries" and "The Originals" showrunner Julie Plec adds another project to her plate with this drama set in the immediate aftermath of a catastrophic viral outbreak.
Exclusive new images from ”Pretty Little Liars,“ ”The X-Files,“ ”12 Monkeys“ and more shows coming in midseason
"Galavant" (ABC): ABC's quirky musical comedy is back for even more absurdity, with a meta first episode titled "A New Season aka Suck It Cancellation Bear."
Dan Schechter is a Managing Director and Partner at L.E.K. Consulting, and he leads the firm's Global Media, Entertainment & Technology practice. He has broad experience within the media, entertainment and technology sector, including TV, film, Internet content and commerce, radio, magazines, theme parks, advertising and news. He also has experience working with retail, consumer products, travel and industrial clients. Dan was awarded his MBA from Stanford University and his BA, cum laude, from Harvard University.