It is needless to say that the millennials (aged from 18 to 35) are dramatically revolutionizing video streaming industry. Armed with mobile devices and savvy knowledge about trending contents, millennials are at the center of the dramatic surge in OTT content consumption. In fact, millennials are the most active video viewers of any US age group as 8 in 10 millennials subscribe to at least one OTT video service.
According to research by eMarketer, in 2017, there will be 79 million millennial digital video viewers, representing more than 92% of all US millennial internet users. It also forecasts that the total audience will increase by 1 million or fewer viewers annually through 2019. A generation whose purchasing power will exceed $200 billion in 2017, it is important for video streaming businesses to smartly target the millennials. Although the millennials are price-averse, it’s not the cost of subscription that influences this generation the most. Here are two key values to the millennials that streaming businesses need to keep in mind and focus on.
1. Content Availability
As millennials find themselves with a wider selection of over-the-top (OTT) contents, price is becoming less of a factor to “cord cutters” and content availability is increasingly becoming the major driving force in decision-making. This is backed by recent news from Netflix.
Netflix has been experiencing lower than expected subscriber growth in part because subscribers are dissatisfied with the lack of breadth in available contents. Netflix raised prices to fund its investment in original contents, reducing the number of third-party titles in its catalogue. As a result, Netflix’s content library has shrunk by about 40% over the last four years. However, many customers still value the size of Netflix’s catalogue above all other factors. Same as for millennials, they want to see a diverse catalog of contents over a smaller selection of premium titles. If they find other services that provides wider choices of content at the same price, they will turn to that service without slight hesitation.
“They [the viewers] would rather Netflix was a platform for all kinds of video, rather than the carefully curated HBO-like service it aspires to be,” said Rob Gallagher, Director of Research at Ovum.
Generating maximum ROI from effective content selection and management is crucial to offset the ever-rising content acquisition costs for streaming businesses.
2. Video Quality
According to report by Limelight, viewers report video buffering to be the most frustrating part of watching online video, and much like their demographic counterparts, millennials are just as bothered by buffering and poor video quality. Video streaming quality is another important influencer in viewers’ decisions to switch from pay-TV to OTT video streaming services. Viewers have short attention span and their tolerance threshold for video quality is very low. If the millennials experience any media player errors or buffering during the playback, it’s a red flag for your streaming service.
Despite the proven fact customers are most dissatisfied with buffering and poor quality, Verizon Digital Media Services reveals content delivery is still suffering. According to VDMS, 86% of streamers expect high-quality viewing experience but many aren’t getting it. Poor video quality will result in abandonment and it’s a matter of time the millennials will turn to higher-performing OTT services.
It is also important to assure premium quality on multiple devices, especially on mobile. According to the latest report from Ooyala, 46% of all video plays in Q4 2015 were on mobile devices like tablets and smartphones. Smartphone online video viewing is gaining ground and it is important that millennials experience seamless video delivery on any content from episodic TV to longer dramas, movies, news and sports. To minimize the technical challenges and the time to constantly monitor and analyze the service, businesses are starting to adopt real-time analytics tool to optimize their service.
It’s prone to conclude that price is the most triggering factor driving price-sensitive millennials’ choices, but making their viewing experience as diverse, hassle-free and perfect as you can is the best strategy to win over this enigmatic and influential generation. Video streaming businesses that effectively harness the video consumption trends of millennials will gain a competitive edge and increase their market power.