Shift in Boomer Habits Bodes Poorly for Traditional TV Service Providers

Co-written by Andy Golub

A couple of decades back it was the Baby Boomers driving new waves of consumer demand, but are they still at the forefront of today’s media and technology transformation?

Surprisingly so, according to the latest ChangeWave survey of 1,660 members of the Baby Boom generation. The benchmark survey of business professionals between the ages of 45 and 63, completed in early May, focused on TV viewing habits vs. home Internet usage.

The results point to a powerful shift occurring among Boomers away from traditional TV towards new types of online services and entertainment. Importantly, this transformation is affecting lifelong habits.

In the first major finding, Boomers now spend more free time online (12.9 hrs per week on average) than they do watching traditional TV (11.8 hrs per week on average).

What’s more, by a five-to-one margin Boomers are watching less traditional television than they did a year ago. Among this group, 62% say it’s because they’re not as interested in what's on TV these days, and another 26% say they’re spending more time surfing the web.

Social Networking Not Just for Teens Anymore

One place that Boomer professionals are spending more time online is with social networking sites – where 51% say they currently maintain one or more profiles.

Nearly three-in-five (57%) of these Boomers report they use the networking site LinkedIn, while another 55% have a Facebook profile – the site normally thought to be most popular among teenagers.

But Boomer interest in social networking has its limitations – 77% of users say they would not be willing to pay a subscriber fee for social networking. Of all the services, LinkedIn is the most likely to attract paid subscribers – but only 7% say they’d be willing to pay a fee if it was no longer free.

A Closer Look at Traditional TV vs. Alternative Programming

Among traditional TV viewers, an astonishing one-in-five (20%) say they’re likely to downgrade or cancel their current TV service package in the next 6 months. The likelihood of canceling is highest among Cable (22%) and Satellite subscribers (22%), and lowest among fiber-optic TV subscribers (7%).

We also asked Boomer respondents to tell us which one paid subscription they’d be most willing to give up, and again its TV Service (44%) that appears most vulnerable – scoring significantly worse than any other subscription service.

Adding fuel to the fire, Video-over-the-Internet now clearly represents a significant threat to traditional TV viewing. Better than two-thirds of Boomers (69%) say they’ve watched video content on their computer over the past 90 days. Even more ominously, 48% of respondents say they’d be willing to pay a monthly fee for a Video-over-the-Internet subscription if it provided the same programming currently available on their TV service.

Top TV Websites. YouTube.com (GOOG) (79%) is the leading online website Boomers use to watch video, followed by TV Network Websites (39%), Hulu.com (16%) and iTunes (AAPL) (11%).

As a follow-up, we also asked respondents how willing they are to view advertisements when watching Video-over-the-Internet. And while Boomers clearly want to see fewer ads than they do with conventional broadcasting, more than two-thirds (68%) do say they are willing to view at least some ads online.

Winners and Losers

The shift among Boomers towards Video-over-the-Internet is a long-term trend that bodes poorly for traditional TV service providers, as they face a triple whammy of challenges:

• 20% of Boomers are likely to downgrade (or cancel) their current TV service in the next 6 months – mostly among Cable and Satellite users

• 44% say TV service is the paid subscription they are most willing to give up

• 48% said they’d be willing to pay a monthly fee for a Video-over-the-Internet subscription if it provided the same programming currently available on their TV service

At the same time, there appears to be a huge market opportunity for companies that can successfully package a paid subscription model for Internet TV.

Comments

[Windsun33:]

Despite all the hype about how the current generation is super "tech-savvy" compared to their elders, I have seen just the opposite. While they might have all the latest gizmo's and text like crazy, their actual knowledge of how it all works seems to be skin deep. One interesting stat is that the average age of World of Warcraft players is around 40+, with the biggest demographic being 45-55 females...

Jun 25 08:48 AM

[Joyful Alte...:]

I haven't watched any TV since January, and when my current cable contract runs out, I'm hoping to switch to fios (newly available here) + phone. I'm in that generation, and that survey data pretty much holds true for me. High-speed Internet is what I need most.

One correction: It's MySpace that's thought to be popular with teenagers, and I don't know any friends who are on it. FaceBook started out as social networking for college students, and I know a lot of people on it. I don't go there much because it's just a lot of online goofing off. I do check LinkedIn daily, and I'd pay for an upgrade if I were looking for a new job or otherwise needed it.

Jun 25 09:00 AM

[greenlaw:]

The difference is dramatic between surveys and reality. Nielsen reports indicate that TV viewing has never been higher in the history of television. The best TV viewer is the Internet user, indexing at 130%. The fragmentation of viewing has helped TV, not hurt it. The large TV audience is in more demand by advertisers because the largest share of viewers in the fragmented universe, consisting of mainly small units of viewers, is more valuable in marketing. The grand total of internet video viewing is less than 1%. That 1% accounts for youtube, hulu, and all the rest. TV is still where it's at.

Jun 25 02:33 PM

[mlyn:]

A friend of mind bought an HDTV 40" to which he plugged his laptop. He has a wireless mouse and laptop so he is able to sit in a comfortable armchair and computes from a distance. He streams in his Netflix movies or watches Comedy Central or PBS or CNBC at his whim. If he wants to watch television, he can; but rarely does he switch to it unless it is an "old" habit of turning on the 11 pm news.

Jun 25 02:58 PM

[Snitzer:]

It's forty miles or more to the nearest broadcast TV antenna, my TV is fifteen years old and my antenna is a powered set of rabbit ears. Now that we're digital the converter box pulls in twelve or so channels, compared to the five I had before, and the best of that bunch is PBS. I tossed the satellite dish a few years ago as one, I refuse to pay somebody a subscription to watch commercials, and two, with few exceptions, the content was crap, and aimed squarely at the lowest common denominator, which I ain't. On the other hand, I'd sell a kid (if I had any) before I'd let the DSL line go.
And I agree with the guy about the generation/tech thing, from what I can see the kids are all in with the social aspects of tech, but for the most part they don't know squat about what makes it work.

Jun 25 03:28 PM

[notsosmart:]

what makes things work is hardly the point.they work & do what they are made for.thats good enough for most people.reline any brakes lately?

Jun 25 03:51 PM