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Half of Viewers Under 32 Won’t Pay for TV by 2025

Forrester: Cord-Cutters, Nevers Present One-Two Punch 10/08/2015 9:45 AM Eastern

In a forecast that should send a few more shivers down the spine of the pay TV industry, Forrester Research is predicting that 50% of all TV viewers under age 32 will not subscribe to a traditional pay TV service by 2025.

 

Given that bleak-looking future, based on a survey of more than 55,000 U.S. adults, Forrester analyst James McQuivey suggests that providers must try new ways to connect with cord-cutter and cord-nevers and develop game plans on how to serve them down the road.

 

“Today’s 20-somethings are already hard to reach via TV, and the next generation will be tougher,” McQuivey noted in the report -- Young TV Cord-Nevers Have Arrived And Are Here To Stay – obtained by Multichannel News. “We recommend experimenting with mobile video advertising, embedded marketing, and virtual- or mixed-reality ad experiences to reach this crucial audience.”

 

Some MVPDs have been taking heed, or at least aren’t standing still. Comcast is beta-testing Stream, a $15/month IPTV service that features broadcast networks, HBO and a cloud DVR, and recently introduced Watchable, an ad-based OTT service. Cablevision Systems has developed packages tailored for cord-cutters.  Verizon recently went wide with go90, its free “mobile first” offering for millennials, and Dish Network is targeting cord-cutters and cord-nevers with Sling TV. Programmers such as CBS, HBO and Showtime have also launched standalone OTT offerings.

 

McQuivey said cord-cutters are “secondary” to a bigger problem – the rise cord-nevers, a group that, according to Forrester, now represents 18% of the population. Cord-cutters, he said, represent about 6%, but will stay below a 15% ceiling.

 

Per Forrester, 35% of younger viewers fall into the cord-nevers or cord cutters bucket.

 

Of particular concern are “digital cord-nevers,” a group of young consumers that gravitate to services like Netflix and YouTube that have “grown up believing that they can have all of the TV they want without paying a traditional TV distributor for it.”

 

But it not necessarily all gloom and doom, the bulk of population still gets pay TV, suggesting that there’s still time for traditional players to solve the problem.

 

Despite the troubling numbers, “Rumors of the death of pay TV are greatly exaggerated,” McQuivey said, referencing an earlier study showing that 76% of the population are still in the pay TV fold.

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