Media companies have long kept a close eye on tech-savvy kids and teens, hoping that the behavior of kids and teens today will provide a window into the future of video consumption.
“Teens are the first to get into a lot of these newer technologies,” MTV Networks executive vice president of insights and research Colleen Fahey Rush said.
This year, MTVN is on track to deliver about 100 million videos to mobile phones and many of its shows are being streamed tens of millions of times each month, according to Greg Clayman, the company's executive vice president of digital distribution and business development.
“The number of videos that we stream has gone up tremendously but so have the ratings of our networks,” he said.
Similar numbers can be found at Cartoon Network. In October, over 6 million users visited Cartoon.com, spending an average of 34 minutes. At AdultSwim.com, users spent over 24.4 million minutes — about 25 minutes per person — watching videos and playing games.
But if kids and teens are avid users of online and mobile media, MTVN's Fahey Rush and others stress that using kids and teens as a window into the future of the TV business is a tricky task.
“How they'll change the way they use video as they age is a really big question,” said Fahey Rush. “We don't know if these are consumption patterns that they will age out of or if they will take them with them. It is like someone's taste in music. If you're a head banger at 17, are you one forever?”
At first glance, video consumption by younger demos confirms some commonly held views about their embrace of digital media.
A Starz Entertainment survey of 5,500 people aged 12 and older found that teens aged 12 to 17 were regular users of all types of video. Nearly four-fifths of all teens (78%) watched online videos each week, with another 23% watching video on mobile phones or MP3 players. Large percentages were also using DVDs (61%) and video on demand or digital video recorders (44%) each week.
Teens are the least likely of any age group to watch linear television but they remain avid users, with 83% watching linear TV each week. That is only slightly less than the rate for people 12 and older, with 87% watching linear TV weekly.
“For all age groups, television is still by far the dominant video access point,” said David Charmatz, Starz Entertainment senior vice president of product planning and development. “It's the king of video platforms.”
The Starz survey also found that large majorities in all age groups, including teens, predict their consumption of video on the television will either stay the same or grow over the next five years.
“There is no evidence that people are abandoning television for other platforms,” said Starz executive director of marketing, sales and corporate research Neal Massey. “The universe of people who watch no television but watch long-form video online is about 1%.”
But a wide variety of research contradicts some widely held views about the way younger and older demos consume video.
In the third quarter of 2008, for example, kids aged 2 to 11 spent about 2 hours and five minutes each month watching online video while teens spent two hours and 55 minutes, according to Nielsen Media Research. That is less than the 3 hours and 57 minutes spent each month by the 18 to 24 demo and the three hours and 21 minutes spent by those aged 25 to 34.
In fact, adults, not teens, spend the most time online. According to Nielsen, adults 45 to 54 spend over 35 hours each month online, much more than the 5 hours and 38 minutes spent by kids and the 12 hours and 48 minutes spent by teens.
While kids and teens spent less time watching live TV than other groups, they also spend far more time with television than any other platform. Each month, kids spend over 108 hours watching TV, more than 50 times the amount they spend watching online video, while teens spend nearly 111 hours, 38 times their online video consumption.
Although adults remain the heaviest users of VOD and DVRs, kids and teens also have a major impact on those platforms.
Derek Harrar, Comcast general manager and senior vice president of video services, said movies, music videos, and kids programming get the most on-demand orders on their systems, which means that viewing by kids and teens is playing a key role in the popularity of two of the three top genres of VOD content.
As with other media, teens seem to be adapting VOD to their social lives, according to Harrar. “We found that the average length of viewing of a music video was longer than the video,” he said. “When we did a little research, we found they were rewinding the video to practice their dance moves.”
This social aspect of accessing content is one of the big differences between younger demos and older groups. “For them, it isn't just about watching episodes online or getting them on mobile,” Fahey Rush said. “They are trying to take the viewing experience to the next level by sharing, interacting and socializing around the content. That is what is unique to their demo.”
The rapid embrace of digital platforms is also pushing many programmers to expand the availability of their content.
MTVN's Clayman said digital distribution has become a key part of their strategy. “In 2008 we did a bunch of deals to distribute our content to a whole host of partners,” while continuing to add more video to its own sites, he said. In the mobile area alone, MTV now has over 80 different distribution deals for its content.
Such multiplatform efforts have become commonplace with most cable networks and have now spread to many adult-skewing networks.
“We've been focusing recently on the syndication of clips to partner cites to reach an larger audience,” said Rebecca Glashow, vice president of digital media distribution at Discovery Communications, which launched nine YouTube channels in September 2008.
Discovery has been aggressively expanding the amount of video across all platforms to help promote its shows, adding five new content areas to Discovery.com and launching video on its mobile Web sites in November. Premieres of several new series in October also helped push Web traffic at Discovery.com to record levels, with unique users increasing 53% to 5.4 million.
But these efforts to respond to changing consumer usage of video raise a number of business issues. “We see a lot of broadcasters and some cable networks putting a lot of content on the Web for free,” Showtime Networks executive vice president of affiliate sales Tom Christie said. “You may remember [NBC Universal head Jeff] Zucker saying he didn't want to trade analog dollars for digital pennies. The value of all that content out there for free is an issue that people are going to continue to face next year. I'm skeptical of that business model.”
“There is certainly a macro trend for content companies to use multiple digital platforms to monetize their content,” added Rainbow Media president and CEO Josh Sapan. “But as they do that programmers risk devaluating their content to cable and satellite companies. The rates they are being paid [in subscription fees] might not be sustainable because the operators might not think they're worth it if the content is so widely available elsewhere.”
