Can You Trust Anyone Over 19?

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This will not surprise anyone who hangs out with those
notorious 20-somethings or who is one of them: According to a Consumer Electronics
Manufacturers Association survey, "Gen-Xers use many [audio/video] and computing
products more than their wealthier elders."

And they know how to set the timers, too.

These whippersnappers are expected to spend $8.5 billion on
select electronics and computing products in the next 12 months, with a heavy emphasis on
computing and audio products, according to the CEMA's research. While these 48
million Generation X golden children -- born between 1967 and 1979 -- are the grail for
many marketers, their appetites for high-tech tools may well shape the future of the
programmers and carriers that bring signals to them. Figuring out what they want to see or
use is complicated. Building an infrastructure -- appropriately designed -- may make or
break telecommunications providers that make the wrong assumptions about Gen-Xers.

With money to spend and an appetite for electronic
information and entertainment, this emerging audience poses unprecedented challenges. As
they stay single longer, live in multidwelling units longer and refine their finicky
high-tech tastes, what kinds of services (or networks) will they want?

Cable and telephone companies' infrastructures and
their core services are aimed at today's video- and voice-centric households. But can
we count on Gen-Xers to eventually behave like their parents, focused on TV and phones? Or
will they become a new breed of data-oriented, plugged-in audience? The last-mile
distribution networks -- at the center of today's expectations -- may need to be
reconfigured for an audience that expects uninterrupted, high-speed access with
multitasking capabilities.

For example, the CEMA study finds that 22 percent of
respondents say that using their personal computers has led to less TV viewing. That
substantiates several other Nielsen and private studies. It also marks the beginning of a
diverging audience, seeking value-added software and services beyond the normal package
that cable, telcos or broadcasters deliver.

Although Gen-Xers generally do not earn as much money as
members of older generations, the household penetration of PCs for Gen-Xers (53 percent)
is much higher than that for the general population (42 percent), according to the
CEMA's research.

Just over 60 percent said they have gone online in the past
six months, compared to less than one-half of the general population. The main reason
Gen-Xers cite for not having a computer is price ("too expensive," said 40
percent); only 17 percent said they don't want one.

Will they eventually buy PCs if the price comes down or the
value goes up?

To be fair, this demographic group likes other electronics
products, too, says the self-serving CEMA study. Listening to music at home and on the
road is the top Gen-X priority (used by 86 percent), and 83 percent said they listen to
music "every day." Video is still "a top source of entertainment,"
cited by 54 percent of this group. More than one-half own a large-screen TV set (27 inches
or bigger), and one in four owns home-theater speakers.

Interestingly, Gen-Xers are conservative about electronics
shopping -- possibly because it often involves big-ticket items. Only 10 percent of
Gen-Xers say they "shop frequently" for computer products, and 15 percent
"shop frequently" for audio/video/mobile consumer electronics. That compares to
38 percent who are frequent book/music shoppers and 40 percent who put themselves in that
category for clothes and shoes.

Clearly, this plugged-in generation is ready for content
and services, but it is not so clear where they intend to get it. As TheWall
Street
Journal pointed out last week, the Web as we've known it has only
found a few info/data niches. The promise of interactive entertainment is virtually
untapped.

Bandwidth changes everything. So do the changing tastes of
this well-wired audience. But bandwidth and applications are both moving targets, and the
availability of one affects the development of the other. It's a quantum process that
is just beginning to take shape.

Now it's just a matter of matching network
capabilities to the unknown interests and whims as this tech-savvy audience moves into the
really high-spending years: their 30s and 40s. As CEMA president Gary Shapiro puts it,
this is "the first generation to come of age during the digital" era. And coming
up right behind them is Generation Y, who will, no doubt, have another set of bandwidth
needs -- coming of age at just about the time when today's 15-year franchises expire.

I-Way Patrol's crotchety Gary Arlen, an old-line
new-media prognosticator, doesn't much trust anyone beyond Generation W.

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