When you think of the average television cord cutter, chances are likely the first image that comes to your mind is that of a radical millennial, slashing his or her monthly cable subscription service in favor of alternative, over-the-top (OTT) content. After all, millennials only watch Netflix, Hulu and YouTube, right?
Well, not exactly.
Millennials, as it turns out, are proving to be a somewhat misunderstood group in regard to their media consumption habits, as a recent study from Evercore ISI indicates.
Yes, it’s true that millennials have an ongoing love affair with OTT content; the study, for example, shows that the majority of content being watched by young viewers between the ages of 13 to 35 is in fact OTT. However, the report also shows that the majority of millennials are in fact sticking with their pay TV services rather than abandoning them as many industry pundits claim they are doing.
We’ll pause so that you can do a happy dance.
“Online video seems to be the most popular way to watch video among young millennials,” explained Vijay Jayant, ISI media analyst, in a recent Multichannel article. “However, as of now online video seems to be mostly complimentary to cable/ satellite with only a small percentage of respondents saying they are likely to disconnect their traditional cable/ satellite connection in favor of online video.”
The study is interesting due to the fact that for the past few years, cable companies have been in a tizzy trying to make their traditional pay TV services more appealing to younger viewers in an attempt to prevent widespread cord-cutting. The study should therefore come as welcome news to service providers, as fears about a massive rising consumer base of young, anti-pay TV millennials can be put to rest.
Indeed, what appears to be happening is what cable providers have long hoped would be the case: A happy marriage between online video and pay TV. Young viewers are showing that it is in fact possible for the two fundamentally different content delivery models to coexist, without online video cutting too far into the bottom line.
The truth is that online video actually represents a viable way for cable providers to generate more revenue. This is due in large part to the fact that OTT content requires a large amount of bandwidth, which can more easily be monetized than fixed monthly cable subscriptions. Just look what Comcast is doing, by moving forward with capped data limits for residential subscribers—a strategy long used by the mobile industry, that is just now beginning to catch on amongst broadband service providers.
You can expect this trend to cascade through the broadband industry, as more providers adopt similar policies in hopes of capitalizing on data-hungry viewers. Moving forward, the companies which best maximize their data pipelines will rise to the top while companies that neglect their networks’ needs will fall behind.