As the decline in the number of pay-TV subscribers appears to slow, Nielsen researchers suggest that more help might be on the way as cord-never millennials get older and have kids.
In its fourth-quarter Total Audience report, Nielsen said that pay-TV households dropped below the 100 million mark. The report also noted a relatively small 1.2% drop in live TV viewing as streaming video-on-demand penetration edged up to 48%.
Those numbers give media companies cause for concern.
Glenn Enoch, senior VP, audience insights, at Nielsen and author of the report, took a closer look at those 18-to-34-year-olds and said their behavior might start to change as they age and that could stabilize the number of multichannel subscribers.
Nielsen divided 18-to-34-year-olds into three groups: dependent adults living in someone else’s home; on-their-owns; and those starting a family. The group with the lowest pay-TV penetration— the on-their-owns—has the highest income, and people with high incomes tend to delay starting a family.
As those on-their-owns get to ages 35 to 39, two-thirds of them are going to have homes and children, up from about 53% today.
“We know that families have higher multichannel penetration than non-families, and that’s pretty much true of every age and every income group. If you have children, you’re more likely to have cable, satellite, telco, some kind of multichannel subscription,” Enoch said
“And upscale households tend to have more of everything. They have more devices, they have more services, more varied behaviors. So after the loss of multichannel homes that we have seen, we might see some pressure in the other direction, which could help stabilize the number,” he added.
This means that in a few years, the TV business might no longer be looking at a generation of cord-nevers.
“Generally speaking multichannel penetration is higher as you get older, but I think that’s been true for like 15 years, “ Enoch said. “This is a whole group of people who might be in the market for multichannel.”
Of course there’s also the possibility that as today’s millennials age, new entertainment choices will be invented that might prove to be an alternative to traditional pay-TV and continue to lure eyeballs away from live TV.
“If you’re saying that the future will continue to get more complicated, I think I’m endorsing that point of view,” Enoch said.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.