The Millennial generation — consumers between 19 and 34 years of age — are nothing like their parents and grandparents. So it comes as no surprise that their buying habits are garnering the attention of service providers and product manufacturers hoping to cash in on the expected $200 billion this demographic will spend by 2017.
That’s also a projected cohort spend of $10 trillion over their lifetimes, according to a recent report by Fayetteville-based Field Agent. The main topic covered in the Field Agent research report is how and why Millennials are spearheading a revolution underway in the way television programming is packaged and delivered.
“Millennials aren’t just watching different content; they’re actually changing the way TV is packaged and delivered in the first place,” said Field Agent CEO Rick West.
Field Agent notes that more Millennials are “cutting the cord” from cable and satellite and opting to web-stream their programming through subscription services like Netflix and Hulu. According to the Los Angeles Times, as of 2014, 7.6 million homes had severed their connections to cable and/or satellite. This was up from 5.1 million homes in 2010. Field Agent notes that these numbers don’t speak directly to Millennials, but they are the group leading this movement.
Field Agent surveyed 300 Millennials, with an even split between men and women on this “cord cutting” topic. A “cord-cutter” is someone who is unwilling to pay for traditional TV-viewing platforms such as cable or satellite and, instead, watches TV exclusively over an alternative medium such as the internet via subscriptions to Netflix, Hulu, and others.
West said Field Agent wanted to know not just how many Millennials are watching Netflix and other services, but how many have completely quit paying for cable and satellite, accessing their TV content exclusively over the web.
“In our survey of 300, 39% self-identified as cord-cutters. However, 74% of Millennials surveyed said they utilize web-streaming to one degree or another in accessing their television content. It’s just that many of these combine web-streaming with cable or satellite,” the report notes.
Millennials cite a number of reasons for their cutting the cord with traditional cable and satellite:
• 84% cite better value/lower cost;
• 70% cite greater control of programs;
• 57% sought to avoid commercials;
• 36% sought better content;
• 34% cite frustration with cable/satellite providers; and
• 8% sought a better picture quality.
A 24-year-old surveyed by Field Agent said in his Salt Lake City, Utah market, that TV is far too expensive for his budget.
“I don't watch that much and feel that most of the programming is unnecessary. Why would I pay so much when I can get everything I want for far less with fewer or no commercials.” he responded.
Field Agent also sought to find out if there was any remorse among this “cord-cutting” consumer. Of the 116 cord cutters in the survey, West said not a single one regretted that decision:
• 54% were completely satisfied;
• 30% were very satisfied;
• 30% were moderately satisfied; and
• 2% were slightly satisfied.
Given the lack of remorse, Field Agent was eager to find out how much of the cord cutters would consider returning to cable or satellite. Less than one-third (27%) said they are not at likely to return to those services. At the other end of the spectrum 14% said there’s a strong possibility they will return. The report notes that vast majority of consumers fell somewhere in the middle, which is an opportunity for cable and satellite providers to try and entice these consumers back into their fold.
Field Agents note that the Millennials move away from conventional cable and satellite is prompting innovative changes within those segments.
At this year’s International Consumer Electronics Show in Las Vegas, Dish Network unveiled Sling TV, a new web-enabled, TV-streaming platform, according to the report. Sling TV specifically targets Millennials as its creators sees it as a viable alternative for live television for this demographic with $20 per month for live television programing, with add-on options along the way for specific channels in a a pay-as-you-go, ala carte option.
West said if Sling TV is any indication, the expectations of this powerful consumer class are in the process of changing not only what’s on TV, but how TV is packaged and delivered in the first place.
“The great unbundling appears to be upon us, and some observers are suggesting pure a la carte TV may be just around the corner,” he notes in the report.