Digital Masters
Gen Y’s Ranks, Influence Continue To Swell
by George Winslow -- Multichannel News, 12/30/2007 7:00:00 PM
While kids and teens are embracing new media in record numbers, the center of the emerging digital world can be found in the young adult 18 to 34 demo.
Young adults have the highest usage of broadband video, with 80% of all males 18 to 24 watching online video at least once a week and 64% of men 25 to 34 viewing each week, according to data from Frank N. Magid Associates.
The 18-to-24 set also has very high usage of portable devices, according to a survey conducted by the Cable & Telecommunications Association for Marketing in May and June of 2007. Nearly two-thirds (66%) of the 18-to-24 age group have used a portable media player in the last month, while 42% have used an MP3 player and 62% have used a portable media player.
Some of this reflects the greater mobility of younger adults — who are accessing video on a PC or iPod while at school — as well as some deeper changes in what the Internet has to offer.
“Two or three years ago, the video quality on the Internet was very poor,” said Mike Murphy, ESPN senior vice president of digital video distribution. “Today there are 60 million broadband connections and the video quality on ESPN360 or ABC.com is incredible.”
Jack MacKenzie, who is the co-head of the entertainment division at Magid and the president of Magid Millennial Strategy, stresses that a more fundamental generational shift is occurring in raw numbers and consumer attitudes.
In 2008, there will be about 83 million members of the so-called millennial generation that covers people aged 11 to 30.
In raw numbers, that makes the millenials larger than the 48 million Gen-Xers aged 31 to 43 or the 77 million baby boomers aged 44 to 64. In the 18-to-49 demo that has long been the bedrock of the TV ad business, there are now about 52 million millenials, compared to about 24 million boomers, MacKenzie said.
“The bottom line is that they are driving a lot of media consumption, particularly online and in the mobile space,” Sony Pictures Television executive vice president of planning and operations David Mumford said. “To be successful in today’s business you have to understand how they operate.”
Having grown up in an interactive on-demand world, this generation expects to access content on whatever device, whenever it wants, MacKenzie said. It is also very collaborative and social in its media habits, a fact that helps explain the popularity of social network sites and the viral nature of user-generated content. It is also relatively tolerant of ads, an attitude that has made ad-supported models more predominant online.
“The most robust online model is ad-supported,” said Dave Del Beccaro, president and CEO of Music Choice. “If you have tens of thousands of choices that are free online, the usage of paid content will be low.”
Del Beccaro also highlights the growing importance of on-demand content for this group. “We’ve seen monthly VOD views [at Music Choice] go from 40 million a month last year to 82 million in October of 2007 and they could hit 100 million in December,” he says. That means “we reach more customers in the key demos of 12 to 34 than The CW network does,” he said.
ESPN, which has a large audience of the younger men that are the heaviest users of online and mobile video, is also seeing growing use of its digital products as it continues to expand the amount of video it produces on various platforms.
John Zehr, senior vice president of digital media and production at ESPN, noted the sports giant is now producing anywhere from 400 to 500 clips a week for online and mobile and their average online video views grew by 80% between January of 2007 and October.
Overall, usage of ESPN’s digital offerings has grown from 39 minutes to 54 minutes a day, according to senior vice president of research Artie Bulgrin. But even higher levels can be found among younger sports fans.
MTV Networks is also boosting its Web presence, dramatically expanding its online video offerings and increasing the number of its Web sites from 200 to 300 over the last year, reports the division’s president of global digital media, Mika Salmi.
This fall, Comedy Central, for example, made every episode of the Daily Show With Jon Stewart available for free online with ads. That has helped increase traffic to 7.9 million users in November, up 28% from last year. Total video streams also skyrocketed 78% to 29.9 million.
Another key focus, Salmi said, is games. “Over 50% of the people who are visiting our sites are playing games,” he said. “We see it as a huge growth area,” adding that the company has committed to investing $500 million in games.
Joseph Olin, president of the Academy of Interactive Arts & Sciences, adds the gaming industry and operators are increasingly collaborating for games on broadband and TV.
Verizon Communications, for example, is rolling out a suite of casual set-top box games in early 2008 and is planning to add a networked massive multiplayer game offering later in the year, said FiOS TV director of interactive TV Rachelle Zoffer.
Part of that interest, reflects the aging of the average gamer and the difference between male-skewing console games and the casual online or set-top box games that attract more females.
“The perception is that men are the vast majority of gamers, but in fact men spend just under 8 hours a week gaming, while women spend about 7 and a half,” Olin said.
The median age for the average gamer has also increased in 2007 to 33, up from 29 in 2006. “About 28% are under 18, 47% are 18 to 49 and 25% are over 50,” Olin said.
Heavy online and game use by younger adults is also convincing major programming groups to launch original brands not tied to their TV networks. “We don’t want to have everything driven by TV,” Salmi explained, pointing to Atom TV, Shockwave, and other sites owned by MTV that are not tied to a TV channel. “We want to see where the audience goes and serve their needs.”
Turner has also been creating new online brands. Drew Reifenberger, senior vice president and general manager of Super Deluxe, said they are now creating about seven original comedy videos a week for the site, which targets users in their early 20s.
The focus on professional content reflects a growing industry emphasis on professional content versus user-generated fare. “We have tools for users to upload [user generated content] but we don’t think it is a big commercial opportunity,” Reifenberger argues. “It is much more of a community feature.”
One reason is advertising. “YouTube is fantastic but a lot of advertisers want to be in a more controlled environment,” said Chris Pizzurro, vice president of digital and new media advertising sales and marketing, Turner Entertainment. “That is making our [professionally produced] broadband content more valuable,” and making it easier to bundle advertising packages for their online offerings with linear TV channels.
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