Life-Stage Analysis of Millennials Highlights Major Threat to Traditional TV

Life-Stage Analysis of Millennials Highlights Major Threat to Traditional TV

LONDON, January 13, 2016 /PRNewswire/ --




- L.E.K. Consulting launches first in-depth analysis of UK millennials' media habits
by life stage, from living with their parents to starting their own families.  
- Preferences broadly consistent across life stages and spreading to older generations.
 
- Media participants need to adapt more rapidly to the new reality.   


Major UK TV companies face the growing threat of the millennial generation's
preference for new media channels, according to research by L.E.K. Consulting, the global
strategy consultancy. One of the most important challenges comes from millennials' planned
reduction in spend on pay TV and switch to internet-based 'Over-the-Top' (OTT) services
like Amazon Prime and Netflix. 45% of millennials pre-family and 56% of millennials with
children currently have a pay TV subscription, and 45% of them either have or expect to
have an OTT subscription in the next year, with two thirds of those planning to cancel or
reduce their pay TV spend.



L.E.K.'s analysis, The Perennial Millennial, is the first in-depth review of UK
millennials' media consumption, covering six life stages, from living at home with parents,
to flat-sharing after being a student, through to starting a family[1]. The research
shows that media consumption trends are broadly consistent throughout the life stages of
the millennial generation (people aged 16-34 in 2015). Their behaviour is also viral and
spreading to non-millennial families and older generations.



Martin Pilkington, Head of L.E.K.'s European Media, Entertainment and Technology
practice, said: "Our research has shattered the common assumption that once millennials
are older and have their own children they revert to more traditional media consumption
patterns. New media companies in the TV industry are rapidly building wallet and mindshare
amongst millennials and this is spreading to other generations. Our research findings are
a wake-up call to the traditional media players that the change in consumption habits is
coming faster and is far more pervasive than they might have thought. Many organisations
will need to adapt more rapidly to this fast-emerging new competitive environment."



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1. The six millennial life stages are: At Home with Parents, Students, Flat Sharing,
'Getting Your Own Place', Young Families (Parents Younger than 25), Young Families
(Parents 26 - 34).



Further highlights of L.E.K.'s research:




- New broadcasting brands are rated far more highly by millennials than traditional
industry brands. Amongst the millennial generation, brands such as Google, YouTube,
Amazon and Netflix have twice the affinity rating of even the strongest traditional TV
brands. Amazon stands out as the only new media brand that maintains this high
affinity across both millennial and non-millennial age cohorts.
- Millennials spend far less time than non-millennials consuming traditional linear and
recorded TV, including pay TV (10 hours a week versus 20 hours), although overall
video consumption is similar (24 versus 27 hours per week). The consumption of
traditional TV does not increase significantly for millennials with families (12 hours
vs. 10 on average for the millennial cohort).
- Millennials spend twice as much time as non-millennials on new media, such as online
video services (11 versus 5 hours per week) and social media (7 versus 3 hours per
week), even though both groups spend about the same time consuming all media (54
versus 56 hours per week).  Millennials across all life stages have much higher
penetration of online video subscription services: 38% for millennials pre-family and
32% for millennials with kids versus 15% for non-millennials.
- Free online video, especially YouTube, is a vital channel for millennials; nearly half
of them (46%) use YouTube every day versus 12% of non-millennials. Again, this is the
same pattern across life stages with no significant reduction for the older
millennials with families.
- Less than half of millennials' video viewing is on the TV as they prefer to watch on
other devices (PC, laptops, tablets and mobile) and this continues for millennials
with families. It drops to 28% for students and flat sharers but is still only 47% for
millennial families versus 74% for non-millennials.
- It's not just about digital. Millennials attend live events, from music festivals to
the theatre and sports games, far more frequently than non-millennials. This behaviour
continues for millennials with children. In a digital world, millennials want live
experiences that they can post and share on social media.
- Levels of trust in advertising are similar but millennials are more open to adverts
than non-millennials, provided they are targeted to their interests and needs, and
they are more willing to trade their personal information for discounts, better
products or more targeted offers. However, they are also more likely to avoid adverts
by not watching 'linear' TV or by using ad-blocking software.
- While there are more similarities than differences between millennials across life
stages, there are some behaviours that change significantly. For example, earlier
life-stage millennials (At Home with Parents and Students) spend more time consuming
free online video (5 hours per week versus 3 hours per week for millennials with
children). Music streaming and social media are also more important for earlier
life-stages (5 and 9 hours per week respectively versus 2 and 5 for millennials with
children). The importance of alternative social media platforms also differs between
life stages. While Facebook use is similar between younger and older millennials,
uptake of newer platforms, e.g. Instagram and Snapchat, is significantly higher for
earlier life-stage segments. 34% of 'at home' and student millennials use Instagram at
least daily versus 22% for millennials with children. The difference is greater for
Snapchat with 33% for earlier life-stages and 13% for millennial families.


Pilkington adds: "This new environment will be become tougher for traditional media
companies to monetise as the internet brands muscle in more and more. One response by the
pay TV players has been to launch cheaper 'slim bundles' to attract and hold on to
subscribers.  However, there needs to be far further and faster innovation to develop
propositions that capture the interest and behaviour patterns of the millennial
generation.



"In this increasingly 'on demand' world, the quality of content will be more important
than ever before. The race is already on; a good illustration of the new dynamic being the
very high level of investment in original content by Netflix and Amazon.



"We can expect to see further entrants into the OTT market, especially to serve
specialist interests, such as individual sports, ethnic markets and specific demographics
such as children. And it's likely that some 'filler' free-to-air and pay TV channels will
disappear as people are able to see what they really want, when they want it. There is
also a large untapped market opportunity for media content owners to develop live events
around their brands."



Research methodology 



For The Perennial Millennial L.E.K Consulting conducted online research of 1,308
Millennials and 685 Non-millennials living across the UK. The research took place in
September 2015.



About L.E.K. Consulting 



L.E.K. Consulting is a global strategy consulting firm that uses deep industry
expertise and rigorous analysis to help business leaders achieve practical results with
real impact. We are uncompromising in our approach to helping clients consistently make
better decisions, deliver improved business performance and create greater shareholder
returns. The firm advises and supports global companies that are leaders in their
industries - including the largest private and public sector organizations, private equity
firms and emerging entrepreneurial businesses. Founded in London more than 30 years ago,
L.E.K. employs more than 1,000 professionals across the Americas, Asia-Pacific and Europe.
For more information, go to http://www.lek.com .




L.E.K. Consulting LLP

CONTACT: For interviews and further information, contact: James Lloyd, L.E.K. Consulting j.lloyd@lek.com +44(0)20-7389-7456 Simon Barker, Barker Communications sbarker@barkercomms.com +44(0)7866-314331


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