Youth, New Living Arrangements and Pay-TV: Does Behavior Match Intent?

August 23, 2013

This article is included in these additional categories:

Television | Youth & Gen X

TDG-Millennials-Pay-TV-After-Moving-Out-Aug2013Recent research from The Diffusion Group (TDG) has indicated that few “late Millennials” (aged 18-24) living at home are highly inclined to subscribe to a pay-TV service once they strike out on their own. Those results were an interesting potential lead indicator of pay-TV penetration trends, particularly given the increasing number of Millennials living at home. Now TDG has released some follow-up data suggesting that these Millennials’ stated intentions may not translate into actual behavior.

The first data set suggested that fully 1 in 4 18-24-year-olds living with their parents were “highly disinclined” to get pay-TV when moving out. But, in its survey of 18-24-year-old broadband users who had moved into a non-college residence, TDG found that only 10.6% said they had never signed up for a cable or satellite service since moving out on their own for the first time.

A majority 51.4% said they signed up for pay-TV immediately, while another 38% delayed signing up for a period of time. TDG notes that those results indicate that 89% of “late Millennials” living on their own will sign up to a pay-TV service by the time they turn 24, a penetration rate that would be roughly in line with – or exceeding – the estimated 86% national average.

The researchers also point out that preferences are likely to change as youth become more established in their careers, get married, and have children, with their attitudes regarding the value of pay-TV presumably evolving as they progress through those life changes.

New survey results released by Centris Marketing Science suggest that traditional pay-TV providers may not be able to bet on that evolution in attitudes forever, though, even if it’s an “assumption [that] has historically held true,” per TDG. That’s because according to Centris, pay-TV and premium channel subscriptions have dipped over the past year among households with children. As of Q2 2013, Centris estimates that 84% of such households have pay-TV and 43% have a premium channel.

While pay-TV and premium channel penetration rates have slipped among this group, use of over-the-top (OTT) services appears to have grown. 35% of households with children subscribe to Netflix as of Q2, according to Centris, and 28% have used it in the past week. Overall, 49% of households with children have used an OTT service in the past week.

A recent report from GfK found Netflix subscribers saying they are now watching less premium cable as a result of their OTT service subscription.

About the Data: The TDG data is based on a survey of 787 18-24-year-old broadband users who had moved into a non-college residence.

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