Money Meets Mobility Portability’s Sweet Spot
Young adults between the ages of 18 and 26 spend more time online than in front of the television, surfing 12.2 hours a week versus 10.6 hours of TV watching. Compared to adults ages 35 to 49, they are nearly twice as likely to download and watch video on the Internet.
But like other broad demos, this group is hardly homogeneous. There is a rift among young adults between the 18- to 24-year-olds and the 25- to 34-year olds. Like the younger set, those aged 25 to 34 are young enough to have grown up with the mobile phones, the Internet, i­Pods and other newer delivery platforms. But unlike their college-age counterparts, they have jobs that give them more income to buy new gadgets. Many of the restrictions on their media usage that they may have experienced while living at home or in a college dorm have disappeared.
“The most active age [for many of the newer video platforms] is 25 to 34,” said Colleen Fahey-Rush, MTV Networks executive vice president of research. “They have the same interest [in using the new technologies] but they have more money in their pockets. That group is the sweet spot for the use of portable devices.”
But that hasn’t cut into their time in front of television. “TV viewing continues to grow, and TV remains their primary platform for video,” Fahey-Rush added.
Programmers are also finding that multi­platform plays with robust video on demand are helping them grow their overall audience.
Such strategies are particularly important at Adult Swim, which only airs in latenight time slots. Jim Samples, executive vice president and general manager of Cartoon Network said, “Since Adult Swim is not on 24/7, being available on other platforms is important for us as a way to drive people back to the network,” which is already the most popular ad-supported network for the 18-to-24 set.
To do that, they offer a mobile TV product, an extensive VOD product that garnered 1.7 million views in August, and a game- and video-heavy Web site, Adultswimfix.com.
When launched in September 2005, games and community played a key role, just as they do on the Cartoon site, but video was relatively limited. Over the last year, the video has been dramatically expanded to include full episodes, clips and original content.
“Video has really been driving usage,” said Cartoon Network senior vice president of new media Paul Condolora, who added that unique visitors increased 132% to 700,000 this September. “Users are spending an average of 31 minutes, up 417% over the prior year.”
In a period when channel capacity is tight, the popularity of newer video platforms is opening up opportunities for newer networks.
Partnering with Sony Pictures Entertainment and Lionsgate, Comcast launched FearNet as a VOD channel, online and mobile offering two months ago on Halloween.
The horror-focused offering targets 18-to-34 young adults who spent over $1 billion at the box office over the last year on horror flicks. “Originally we thought of doing a linear offering but the price of entry was not cheap,” Sony Pictures Television president Steve Mosko said. “The research showed that the viewing of this generation wasn’t towards the linear world. That convinced us to launch this network on three on-demand screens” — VOD, Internet and mobile.
So far the strategy seems to be paying off. “We’re already the No. 4 most-watched network on VOD behind HBO, MusicChoice and Nickelodeon [on the Comcast systems where their product is available]. We’ve had over 4 million orders since October 31,” Sony Picture Television executive vice president of planning and operations David Mumford said.
Meanwhile, the Web site has attracted over 25,000 registered users. Interestingly, the users are split evenly between men and women even though the horror genre tends to primarily attract male viewers.
Other programmers are betting that their broadband video offerings will bring in new customers and new alliances with operators. Bob Greene, executive vice president of advanced services at Starz LLC, noted that only 50% of the company’s Vongo Internet download service customers subscribe to a premium channel and only 10% are currently subscribers to the Starz premium channels. “It really helps us grow the pie,” he said.
Greene is also looking for deals with operators to bundle Vongo with the high-speed offerings from cable operators and telcos. Greene noted that they have already done a deal with AT&T to bundle Vongo with its fastest offerings at no extra cost and they are talking to MSOs about similar deals. “It is a very attractive enticement if you want to sell higher bandwidth offerings,” he said, adding that the average subscriber downloads 8 to 9 movies a month.
The popularity of user-generated and social networking sites among younger adults is also encouraging content rights holders to let users interact with their content.
Keith Ritter, president of NHL Ice, said that since the 2004-2005 season was scrapped by a labor dispute, the league has invested heavily in digital media, revamping its Web site, making video available on iPods and, putting full games on Google Video. The league recently cut a deal with YouTube to make National Hockey League video available to fans to mash up as they like and teamed with mobile provider Exponentia to provide a live game of chance, PlayAction. Mobile TV offerings, already available in Canada, will soon also be available in the U.S., Ritter said.
“We have a young, tech-savvy audience,” Ritter said, citing a fall of 2005 Simmons Market Research study that found NHL fans tended to be slightly younger, better educated and more affluent, with higher penetration rates for such devices as cell phones, PDAs and digital cable than other professional sports enthusiasts. “All of these platforms help drive people to the big experience, which is going to an NHL game live in the rink or watching it live on TV.”