Search “millennial” on Google and one will find endless links discussing how millennials work and what makes them tick. One has only to look to TIME magazine’s controversial May 2013 cover, titled “The ME ME ME Generation: Millennials are lazy, entitled narcissists who still live with their parents. Why they’ll save us all,” to realize the extent of our society’s current fascination with millennials. But why?
As the newest generation that is coming of age, millennials are increasingly important because of their growing consumer buying power, yet they ultimately remain an enigma to older generations because of their innovative uses of technology. Television is a prime example of an industry faced with millennials’ different behaviors. The changes currently occurring in the television industry exemplify how millennials differ radically from older generations in TV-watching habits and therefore challenge the industry’s traditional methods. Though broadcast networks and cable companies are only now starting to fully understand and capitalize on these differences, millennials continue to change the industry rapidly and in drastic ways.
Back to Basics: Millennials and Television
First things first: who are millennials? Though there is not yet a consistent definition, millennials generally include those born between 1980 and 2000, and those aged 18-34 are the most-discussed group within the generation. According to Pew Research Social and Demographic Trends, millennials on the whole are collaborative, self-expressive, more ethnically and racially diverse than older generations, better-educated and more liberal than older generations, optimistic, mobile, and social. Millennials are the largest generation in American history, now numbering more than the Baby Boom generation. Their sheer size has contributed significantly to the attention paid to millennials and their habits.
Adding to the hype, millennials currently account for $1.3 trillion in consumer spending, according to Barron’s, making them extremely important for the economy. Millennials are also now in the target age range of 18-49 year olds which marketers prioritize. Though millennials are now the generation that everyone—from marketers to cable companies to TV networks—wants to attract, traditional methods for marketing and gaining their brand loyalty have not fully succeeded because of their different habits in watching television and using technology.
Marketers face serious challenges in marketing to millennials because the traditional vehicle for advertisements—television commercials—are no longer effective for reaching millennials. Millennials watch less television than older generations: 26% of millennials watch 20-plus hours of television per week versus 49% of non-millennials, according to The Boston Consulting Group. Furthermore, only 46% of millennials aged 23-29 have cable-TV subscriptions, as opposed to 90.4% of all American households, according to Nielsen.
Millennials’ lack of cable subscriptions, even as they age and establish their own households, has created the term “cord-cutters” for those who get rid of their TV subscriptions, and “cord-nevers” for those who have never paid for traditional television. As reported in TIME, a November 2012 study by The Diffusion Group revealed that 29% of “cord-nevers” are millennials aged 18-24. Many millennials in this age range may be in college and/or still living with their parents and therefore may not have ever paid for television because they have not yet established their own households. Yet their newly discovered means for watching television on their own terms—and often for free—may remain ingrained habits as they age and establish households, disrupting traditional patterns in television consumption.
Millennials are “digital natives”: they have grown up with technology and social media and therefore use it often and for many reasons. Millennials spend an average 25 hours online per week, and 91% are regular Internet users, according to Advertising Age. Many millennials have multiple technological devices like smartphones and laptops, and they use technology easily. For example, sixty percent of millennials produce online content (e.g. posting pictures, videos, blog posts, and reviews) and millennials on average have much larger social networks than non-millennials. Professor Urs Gasser of the Berkman Center for Internet and Society at Harvard University states that “Internet and digital technology play an increasingly important role in [millennials’] lives, starting with how they form their identity and how they experiment with their social identity.” Millennials have grown accustomed to technology, the Internet, and Internet platforms like Google and Facebook and often take these tools and the benefits they afford for granted in their daily lives.
The New Frontier: Television and Technology
Millennials extend their use of technology into all spheres of life, including television. Millennials are more likely to watch television on various platforms and devices as opposed to a traditional television. Forty-two percent of millennials watch television on a computer through online platforms like Netflix, Hulu, and Youtube, as opposed to just 18% of non-millennials, according to The Boston Consulting Group. Millennials are also more likely to watch television on mobile phones, tablets, and DVR, and millennials make up 39% of those who illegally stream television shows and movies online.
Millennials have adapted their ease with technology to television: they are not willing to pay a high monthly rate for cable when they can watch the same shows on Netflix and Hulu for just $7 per month, or when they can stream the same content for free. This has seriously challenged television’s traditional business model which centers on television networks and advertisers. John Della Volpe, Founder and CEO of social media company Social Sphere and Director of Polling at Harvard’s Institute of Politics, states that “the ways in which millennials are engaging with that content is extremely disruptive to both the network as well as the brands.” Brands are now forced to engage with millennials in new and innovative ways, such as using social media and sponsoring online content, instead of relying on 30-second commercials as has been tradition for decades.
Millennials’ increasing likeliness to not pay for television subscriptions bodes badly for cable providers because they are not attracting a new generation of customers. Furthermore, many cable and services providers use cable subscriptions as an entry point for customers to “bundle” and buy other services like phone and Internet services. Millennials’ new habits challenge this business model. Finally, television networks have also been forced to push the boundaries of creativity and content while integrating social media to attract millennials. Gasser has begun to note the increasing role of “media diversification—that is to say when digital tools are used in addition to TV—which has a less obstructive and more accumulated effect.” The emergence of original online content on a platform like Netflix, coupled with the popularity and high critical acclaim of its shows—culminating in Emmy Awards nominations—like House of Cards, Arrested Development, and Orange is the New Black, demonstrates how the television field is rapidly changing in response to millennial habits.
This sounds like a bleak forecast for the television industry as it currently stands, yet there is a catch. Millennials still watch live television through traditional modes in order to engage in the conversation concerning those shows. According to Medialife magazine, six out of ten millennials still watch one hour of television per day, and they are more likely to watch shows when they first air in order to be a part of the online conversation with their friends. Furthermore, millennials multitask with technology when watching television to facilitate this conversation, posting on platforms such as Twitter and Facebook as they watch. One only has to observe the online conversations with thousands of tweets surrounding televisions shows like Scandal, Game of Thrones, and Breaking Bad to realize that millennials’ social nature extends to watching television.
Passing Fad or Made to Last?
Though millennials are challenging the traditional television industry, are these changes made to last, or will millennials shed these habits as they establish families and age? The state of the television industry is currently shifting too quickly to determine any sure qualities, yet many signs indicate that millennials will not change ways. Millennials have grown up with technology and learned to integrate it into many facets of their lives. They have found that many things can be found on-demand and often for free with enough online searching, and they are unlikely to un-learn these customs as they age. Della Volpe believes that these traits are generational and just “one artifact that represents a whole lifetime of sharing… The idea of the ‘second screen’ is something that will stick with this generation for a long time.”
Though no definitive new business or media model has emerged for how to capture millennials’ loyalty or wallets, the changes already seen in the television industry demonstrate millennials’ disruptive technological habits. One can only hope that television networks, advertisers, and cable companies make changes quickly, as Emmy nominations for Netflix original content will soon be the least of their worries.