October 7, 2015
Title got your attention? It should. In a report I just published this week, I use our Forrester Consumer Technographics® data to identify the 7% of adults who are digital cord-nevers — measured as people who have never paid for TV and who are under age 32. This is the worrisome group whose arrival TV-industry pros have nervously anticipated. As we show in the report, they are officially now larger than the entire adult population of cord cutters, who come in at 6% of all adults. Put them together, and you have 15% of adults who are not paying for TV while still getting all the TV value they need from a combination of Netflix, Amazon Prime Video, and other tools.
Don't jump out of any Times Square windows just yet. TV is still massively popular and will continue to be. I wrote that report earlier this year, and Forrester clients can read it here. These defector groups are going to grow over time, true. And as the title of this post suggests, if we model this behavior out over the next 10 years, we expect that 50% of adults under age 32 will not pay for TV, at least not the way we think of it today. That compares to 35% of that age group that doesn't pay for TV today. (That's right, a third of them are already out of the pay TV game.)
The real challenge isn't how to deal with the end of TV, it's how to deal with the diminishing opportunities to reach this young audience. TV will be one of the ways to do it, but with a disproportionate emphasis on tentpole event like sports events, season finales, and awards shows. Mobile will also be important — currently these young cord-nevers and their cord-cutter peers of the same age are responsible for as much as 25% of all mobile video viewing minutes.
Clients should read the report to get much more data and detail, along with our recommendations for different industry players as well as the CMOs in any industry who have to figure out how to reach these younger viewers in the future.
James McQuivey, Ph.D., is a Forrester principal analyst and the author of the book Digital Disruption. He sent his own 20-something son a Roku streaming stick for a recent milestone, thus contributing to this very problem.