The New Generation of Pay-TV Subscribers

Let’s face it; over-the-top (OTT) providers have undoubtedly shaken up the pay-TV industry, putting traditional cable and broadband providers between a rock and a hard place. However, new research states that there may be a new generation of pay-TV subscribers on the horizon, which is certainly welcomed news for cable and broadband service providers.

According to a new study, titled “Late Millennials: A Study in Media Behavior,” commissioned by The Diffusion Group, young adults between the ages of 18 and 24 (also known as Late Millennials) who move into their first non-college residence are likely to sign up for cable, satellite or telco-TV services.In fact, 50 percent of Late Millennials living on their own sign up for multichannel video program distributor (MVPD) video services; 38 percent sign up before turning 24 years old; while only 11 percent skip pay-TV services completely.

These recent findings contradict many of the recent headlines claiming that young adults are cutting the cords opting instead for OTT services. “By the time they turn 24, 89 percent of Late Millennials living on their own subscribe to a traditional pay-TV service, which is about the average penetration of incumbent pay-TV across all broadband households,” said Michael Greeson, president and principal analyst of The Diffusion Group. “This is good news for both service providers and networks. Whether they maintain that subscription over time, and for how long, is another question,” he added.

Greeson goes onto to warn that increasing competition from OTT providers and the desire for TV Everywhere services (TVE) will “test” pay-TV’s position as the go-to home TV service. The industry will just have to wait and see if this new generation of pay-TV subscribers is the real deal.