Pay-TV for pocket money: teenagers to boost media subscriptions in next five years - Deloitte

• Explosion of media content and choice driving a proliferation of TV and video subscriptions across all age groups, according to new Deloitte research;
• Teenagers will increasingly become subscription account holders for media entertainment;
• Viewers aged over 55 will watch 15% of TV content on demand by 2023.

By 2023, households in developed countries could have at least three separate TV and video subscriptions, with teenagers as well as adults being potential account holders, according to Deloitte. The findings come from Deloitte’s research, The future of TV, a forward-look at the UK television market.

Subscription video on demand (SVOD) will continue to surge over the next five years driven by improved connectivity, increased volume of available content and low barriers to entry through reasonably priced services.

The findings come after Deloitte predicted earlier this year that 2018 will see 350 million digital-only subscribers globally, with around 580 million subscriptions to services that can include video on demand, music, gaming or news and magazines. In the UK, Deloitte estimates there are about 26 million media online-only subscriptions.

Rise of the screenagers
With pocket money for the UK’s children averaging at £11.20 per week*, and Pay TV subscription services typically starting at around £5 per month, Deloitte predicts that that a growing number of teenagers will become account holders of SVOD service as they choose to devote a proportion of their pocket money to media content that caters for their individual interests.

Dan Ison, partner and head of media and entertainment at Deloitte, commented: “The relative affordability of a huge wealth of streamed content is incredibly attractive for media consumers of all ages.

“As no single person may be paying or overseeing all subscriptions paid for by each member of the household, the aggregate number of subscriptions may proliferate invisibly.

“This means that households will increasingly have multiple media subscriptions that cater for individuals’ needs, whether you’re a sports-nut, history-buff or movie fan. Teenagers’ pocket money, once spent on comic books and magazines, will go towards SVOD subscriptions.

“Content providers and media distributors may need to rethink their marketing strategies in order to appeal to the ’screenager’ market.”

Over 55s demand for on demand
Deloitte also expects that by 2023, viewers aged 50 and over will watch 15% of all television content on-demand, across both subscription and broadcast providers.

For those in their fifties by 2023 (which would include today’s 45 year-olds), a fifth of their television programme viewing will be on-demand. For those aged 55 and older, on-demand is expected to be about a tenth of all viewing.

The rise of on-demand viewing among older age groups will be driven by a combination of factors including ease of use, improvements to connectivity and influence from younger consumers, reflecting the adoption patterns seen with other complementary disruptions, such as smartphones and e-commerce.

Ed Shedd, partner and head of technology, media and telecommunications at Deloitte, added: “Older age groups will be nudged into on-demand viewing by their own peer group and the behaviours of younger generations in their family.

“As such, on-demand services, from broadcasters and subscription services, need to be as easy to use as traditional TV. Design and testing should be done by people who represent the target audience, and not just younger age groups. User interfaces should not be intelligence tests; font size selection should not replicate an optician’s test.

“There is a real commercial challenge for those in the TV industry to become leaders in this space, particularly when considering that 55-75 year-olds own half of the wealth in the UK.”

*According to Childwise Monitor 2018 report.

End

Notes to editors

About the research
Deloitte’s research, The future of TV explores how the UK television landscape may change in the next five years, looking at topics such as the future of TV advertising, the atomisation of the audience, the rise of the silver SVOD user and the implications of pay TV for pocket money. To read the report, visit the website.

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk

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