Digital Media Activities Vary By Generation Age Group
PARIS, FRANCE - MARCH 13: A Deloitte report finds video gaming is the most popular entertainment activity for Generation Z, for older age groups its watching TV and movies.. GETTY
Last month Deloitte released its 15th annual Digital Media Trends Report. The report is based on the online responses of 2,009 U.S. consumers that took place in February 2021. The responses were weighted to reflect the population. As in previous surveys, Deloitte broke out the respondents into age groups or “generations”.
Generation Z (born between 1997 & 2007)
Millennials (born between 1983 & 1996)
Generation X (born between 1966 & 1982)
Baby Boomers (born between 1947 & 1965)
Matures (born before 1947)
Popular Media Activities: The report focused on the number of entertainment choices consumers now have access to. Among them are social media, streaming video, streaming music and video gaming. Deloitte found 84% of the respondents use social media. In addition, 82% subscribe to a paid video service (with an average of four subscriptions) with 55% using an ad supported streaming video service.
Deloitte reported that 78% categorize themselves as frequent or occasional video gamer players and 45% subscribe to a video game service, with an average of three subscriptions. The survey also found 62% of respondents use an ad supported music streaming provider, with average number of subscriptions numbering two. Moreover, 60% have a paid subscription to streaming music service.
Watching TV/Movies: Despite the growing number of options now available, watching TV/movies at home ranks among the most popular entertainment activities. A total of 57% of respondents ranked it among their three (out of 16) favorite entertainment activities. Watching TV/movies ranked first among Baby Boomers (39%), Generation X (29%) and even Millennials (18%). With Generation Z however, only 10% had ranked watching TV/movies among their most favorite entertainment activities, falling below video gaming (26%), listening to music (14%), web browsing (12%) and social media (11%). Moreover, 46% of Generation Z said video game playing has taken away from other entertainment sources.
Price & Content: As the number of subscription video services available grows, price and content are the most important factors. As mentioned, 55% surveyed said they watch free (or at a lower cost) ad supported streaming video provider. The survey found 46% of respondents would subscribe to a new video streaming provider if the cost was low enough. Additionally, 26% said they would subscribe to a service if they offered a free trial or discounted rate. Most respondents (60%) said they’d accept advertising for a lower monthly rate, while 40% of consumers said they would be willing to pay $12 monthly for an ad free video service.
Another determinant on whether a streaming video subscriber would cancel is content. 31% answered they would cancel or stop using their streaming video provider if the content they liked was removed. Also, 31% said they would look for another streaming video service that offered content they liked.
Keeping subscription costs down while offering quality content is a challenge. The cost of producing original scripted programs and acquiring the rights for licensed content and sports continue to increase in a competitive marketplace. For example, Amazon AMZN -0.4% is expected to pay $465 million for the first season of Lord of the Rings. At the launch of HBO Max in 2020, AT&T T -0.8% said they were committed to spend $4 billion on HBO Max in the first three years. Similarly, Comcast CMCSA +2% announced it would invest $2 billion in content on Peacock over its first two years. (In 2020, Peacock lost a reported $914 million.)
Besides having their favorite content go away, other frustrations mentioned by streaming video users were subscribing to multiple providers to watch their favorite content, 53% cited that as a hindrance. Other annoyances include trying to navigate content across multiple streaming video providers (52%) and not providing good recommendations (49%). Deloitte reported the churn rate from October 2020 to February 2021 remained around 37%.
Pricing and content have also been issues with streaming music and video gaming subscribers. The survey found 37% would drop a streaming music subscription and 38% would cancel their video gaming subscription over a price hike. Additionally, 29% would cancel their streaming music subscription if content they liked was removed and 22% would do the same with a video gaming service.
Social Media: A prominent source for music, video entertainment, gaming and news has become social media. While the use of social media is widespread, however, how it is accessed varies by generation. For example, the two most common activities for Generation Z have been listening to music followed by video games. For Millennials, listening to music and watching TV shows/movies were most popular. For Generation X, the most popular activity was consuming news.
Social media has become a prominent source for news especially among younger age groups. For Generation Z, 50% listed social media as their favorite source for news updates and current events, compared to 12% for TV news (broadcast and cable). By comparison, among Baby Boomers only 8% went to social media for news and 58% went to broadcast/cable for news.
Other comments on social media made by respondents found:
· 67% don’t trust the news on these sites.
· 45% would pay for social media if it didn’t gather their data.
· 77% believe the government should regulate personal information.
Furthermore, with social media platforms, while a majority of Generation Z (62%) and Millennials (72%) prefer personalized ad messages, only 40% of overall consumers said they would be willing to share personal information to get more relevant ad messages.
Advertising: Advertising is the financial foundation for many digital media outlets. In the latter half of 2020, it was digital media led by search, social and streaming video that triggered the ad marketplace comeback. The lower funnel characteristics such as purchase intent, brand conversion and ROI are popular digital media attributes. The revenue from marketers have made Google, Facebook and now Amazon into advertising powerhouses. Not all consumers however want advertising. For example, Deloitte found 48% of Generation Z and 46% of Millennials would prefer to pay for a streaming video provider to evade ads.
For streaming music services, the preference for no ads is even stronger. The survey found 45% of all respondents and 67% of Millennials would prefer to subscribe to a streaming music service. In addition, 61% of streaming music users say they are not paying attention when ads are being played. Similarly, 49% of all video game players would prefer to subscribe to a service with no ads.
Generation Z: Another topic Deloitte addressed was the different media consumption Generation Z (Age 14 to 24), compared to older age groups. Generation Z grew up in an era of social media, instant messaging, video games and streaming content. This age group has eschewed TV/movies for streaming music and video gaming. “Gen Z” can also be considered early adopters and have even been influential in the media selection of older age groups.
As options proliferate, media & entertainment providers in the years ahead should become more familiar with the fluid entertainment habits of Generation Z and create events that appeal to them. Advertisers pay a premium to reach this audience media decisions will be influenced by their media habits as they get older.