As a business journalist, it is always important to follow the money. Right now, millennials are the top economic influencers with a spending power of $200 billion annually. Industries from food to flowers are impacted by the spending habits of the generation, and the television industry is certainly one of them. Here are three trends that show how millennials are impacting the entertainment business.
Cutting the cord
It’s no secret that millennials are canceling their cable subscriptions, moving to cheaper and more personalized online-streaming providers. In a Nielsen study 31 percent of millennials report using an online, paid service provider as their main source of TV viewing. This is significantly more than Generation X (24 percent) and Baby Boomers (15 percent). Content streaming companies like Hulu, Amazon and Netflix have gained significant traction over the past five years.
According to Business Insider, U.S. revenue for video streaming services grew by 29 percent to $5.1 billion in 2015. Despite that, cable isn’t dead. A hefty 73 percent of millennial users still have cable or satellite subscriptions, according to Nielsen. But that’s about to change: 38 percent of millennials reported that they plan to cancel their subscription in favor of an online-only experience.
According to a 2014 Verizon Millennials and Entertainment Report, the television experience is not limited to just one screen. Some 65 percent of millennials are active on a secondary device during their television viewing experience. The report cites social media (Facebook and Twitter), online shopping and e-reading as the top activities millennials engage in while watching TV. Verizon says these activities are not typically related to their television viewing experience.
Content, Hollywood to Silicon Valley
Online-streaming services have a good pulse on what the millennial generation is looking for. Netflix recorded its biggest quarter in its 19-year history in Q4 of 2016, adding over 7 million subscribers. Much of Netflix’s success can be attributed to its development of original content. In 2016, Netflix spent $5 billion on original programming, according to Wired. In fact, 57 percent of Netflix subscribers cite the original programming as their reason for subscribing, according to DMR Statistics. Millennials play a large role, as they represent 79 percent of Netflix subscribers, according to MindAptiv.
• Look ahead at the big televised events coming up this season and find out how consumers in your area are planning on watching them. What alternative formats are the networks providing to view the programming, such as live online or broadcasting through their network app?
• How are cable companies affected by the transition from traditional cable TV to online streaming? Have local cable companies branched out to new innovative formats in order to compensate for declining revenue from their traditional business model?
• Find out how instant-entertainment and on-demand movies through online streaming services could be impacting other entertainment in your area. Find out how business has changed for local movie theaters.