08.30.2013 09:21 AM
Research suggests new generation of pay-TV delayers is emerging
Young adults between 18 and 24 years of age (known as Late Millennials) who move into their first noncollege residence are equally likely to sign up immediately for cable, satellite or telco TV services as they are to delay or forgo it altogether, according to a new study from The Diffusion Group.
The research, “Late Millennials: A Study in Media Behavior,” examines the preferences and behavior of broadband users between the ages of 18 and 24.
Michael Greeson, TDG president and principal analyst, says half of young adults in this age group sign up for an MVPD video service upon moving into their first noncollege residence. Thirty-eight percent sign up before turning 24 years of age, and 11 percent forgo these pay-TV services entirely, he adds.
"By the time they turn 24, 89 percent of Late Millennials living on their own subscribe to a traditional pay-TV service, which is about the average penetration of incumbent pay-TV across all broadband households,” says Greeson. “This is good news for both service providers and networks. Whether they maintain that subscription over time, and for how long, is another question."
Several indicators point to a leaning away from traditional pay-TV services for the home among the Late Millennials, he notes. However, these behaviors and tendencies could change over time as this generation secures better-paying jobs, marries and has children, Greeson says. MVPDs have banked on this evolution in preferences as the circumstances of young adults change for several decades, he adds.
But things may be changing. "In the next five years, growing competition from virtual operators will test incumbents' longstanding position as the default home TV service,” says Greeson. “Greater choice means consumers will have little patience for ongoing price increases that do not significantly expand service benefits."