Most of the concern at the moment is focused on younger consumers, in large part because of their proclivities to consume over the top video.
But that might not predict, very well, whether they might do so later in life. Market researchers would note that spending patterns and habits of teenagers, college students and younger adults typically do change substantially as they get older, enter the work force or start families.
Consumer spending patterns change in part because disposable income rises, but also because of other life factors.
So nobody knows whether current media consumption patterns will persist in precisely the same way once disposable income ceases to be a practical issue for college-age consumers as they age.
There already is some evidence that a significant percentage of Millennials do not buy subscription TV services, even though money to do so is not a problem. Studies of younger Millennials also show mixed results.
According to research outfit Mr Youth, some 38 percent of college students said they watch ad-supported TV channels shown on cable systems while 31 percent said they watch “premium” channels.
About 91 percent view video on their laptops, while a majority watch on their smart phones or desktop PCs as well. More than one-third watch video content using a gaming console connected to a TV, more than had premium cable service and nearly as many as had basic (ad-suported channels) cable service.
One reason for viewing on multiple screens is that many college students don’t have money in their budgets to pay cable bills. Another reason is they are comfortable consuming content online. That has been a concern for some time.
That behavior is not unusual, though. Most people now watch some entertainment video on smart phones, tablets, PCs game consoles or other personal and Internet-connected devices. A new survey from Frank N. Magid Associates finds that more than half of all viewers who watch online video are now watching TV episodes and movies on the Internet, for example.
Millennials are not cutting the cable cord completely, but that they “are leading the media users and adopters who are spearheading the movement to cutting the cord,” said Christian Borges, vice president of marketing at Mr Youth.
About 200,000 fewer subscribers will buy entertainment video services in 2012, analysts at Credit Suisse predict. In large part, the modest contraction can be blamed on weak formation of new households and a growing number of new households that are avoiding subscription TV subscriptions altogether.
More than “cord cutting,” the abandonment of video services by customers that used to buy such services, the new weakness is among people who would otherwise have been starting their own households or becoming potential consumers for the first time.
The Credit Suisse analysts emphasized that they remain optimistic on cable and satellite sector businesses, but see the developing new problem as “cord-avoiders,” households that are relying on video alternatives in an arguably new way.
Many new households are not signing up for cable or satellite, the analysts said. While there were 1.8 million households formed, according to U.S. Census estimates cited by the report, only 16.9 percent of them signed up for video entertainment services.“Avoiders” now the growing problem.
College-age Millennials don’t generally buy video subscriptions if they are living on campus, though arguably more do so when living off campus. But that doesn’t necessarily mean they have abandoned “traditional” TV in favor of other media. College cord cutters