September 19, 2013 8:19 pm

Entertainment: Generation next

How will media groups reach millennials, who control $990bn in spending but do not buy books, music or magazines?
Girl with headphones©Getty

Alexandra Gombar cannot remember a time before the internet existed. Since the first-year student at the University of North Carolina was born, people have been browsing Yahoo, finding rentals on Craigslist and shopping on Amazon.com. She remembers surfing the web at about the same time that she learnt how to read and write.

The 18-year-old seldom watches television programmes on a TV set. She rarely buys music albums or books. She does not subscribe to magazines or newspapers. Yet she expects millions of videos, songs, books, blogs and tweets to be available at the touch of a screen.

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Ms Gombar is a member of the first generation of adults who have not known life without instant messages or immediate access to the web. They have documented their teenage years on social media. They live in an on-demand media world and do not feel the need to own any of it.

They pay little attention to big broadcasters or traditional culture tastemakers. They discover hot trends – whether the 16-year-old singer Lorde, the AwesomenessTV web network or the satirical site betcheslovethis.com – via social media, often under the radar of adults older than 30. And they are disrupting the foundations of the entertainment and marketing industries.

Established media companies are struggling to create programming capable of holding their attention. Marketers are battling to keep pace with their frenetic, often promiscuous media habits. Research conducted by MTV shows that this generation appear to care less than their elders about being rich, being good-looking or driving a nice car (indeed, any car).

“They see through the marketing bullshit in 20 seconds. We’ve almost got to unlearn everything,” says David Jones, chief executive of the advertising group Havas.

Eighteen-year-olds such as Ms Gombar represent only the beginning of this upheaval. “I am kind of old-fashioned,” Ms Gombar says. “I use a lot of technology, but the vast majority of people my age use much, much more.”

There is an age-old tendency for adults to look at the habits of kids and proclaim them to be unlike any previous generation. Much has been written, debated and discussed about so-called millennials, those born between the early 1980s and 2000, who are now aged 13 to 33. A hotly debated Time magazine cover story called them the “Me Me Me Generation” who “still live with their parents” but will “save us all”.

These digital natives have been described as optimistic, entitled, civic-minded, narcissistic, confident and self-expressive. Rapid technological changes, coupled with a coming-of-age amid the economic crisis, shaped their world views. Three-quarters of the group own a smartphone. They are also considered better educated, more socially responsible and globally connected than older generations. Yet they are shackled by student loans and face a dismal job market.

“You look at young people, put them in a glass box and say they are really different. Young people have been the same for generations,” says Kerry Taylor, senior vice-president for youth and music for Viacom International Media Networks. “But this is such a unique time with the changes in technology and shifts in the economy.”

Millennials make up about a third of the world’s population or 2.5bn people. It is the largest generation in US history, larger than the Baby Boomers and Gen Xers who came before them. They are estimated to control about $990bn in annual spending power in the US and influence another $300bn to $400bn.

Media and ad executives are fixated on projections that by next year millennials will make up more than half of the all-important 18 to 49 audience that advertisers are eager to target. They are not debating whether the millennials will grow up and settle into the same media patterns as their parents but rather how different they really are.

“If history proves two things, one is that the avant garde almost always get assimilated and, two, young people get older,” says Jonathan Nelson, chief executive of Omnicom Digital, the digital arm of the advertising conglomerate.

A decade ago, media executives were wringing their hands over a generation of Napster users who pirated music. While piracy remains a problem, the rise of new services such as Netflix for online video and Spotify for music demonstrates that this group of young adults is more willing to pay for access to content.

About a third of adult US millennials say they would be willing to pay for TV shows, movies, music, books and video games, up substantially from three years ago, according to Magid Associates, a media consulting group.

“The Napster generation was born in a vacuum with no technology that could prevent piracy. Now there are better technologies and young people are more willing to pay,” says Matt Britton, chief executive of MRY, a youth-focused ad agency owned by Publicis. “Access is more important than ownership for this group. They value experiences versus owning things.”

. . .

One of the biggest differences in the millennials’ media habits compared with older generations is how much less time they spend watching traditional TV. They spend far more time watching video on demand via digital recorders, web streams or mobile phones. US adults 18 to 24 years old watch an average of 106 hours of TV a month, about 40 hours less than adults aged 35 to 49, and about 80 hours less than people 50 to 64, according to a Nielsen study.

Chris Cutler, a 19-year-old student at Chapman University in California, says that except for live sports, he streams nearly all of his favourite programmes via Netflix or HBO GO, the network’s streaming service for subscribers. “I’m not such a TV person,” he says. “I’m just comfortable using Netflix and HBO. That satisfies me.”

That means that large numbers of younger millennials have no use for traditional pay TV subscriptions. While some media executives argue that millennials will start subscribing to a pay TV service once they move into their own homes and start their professional lives, several youth experts say that notion is a risky assumption.

“Patterns form when you are 20 years old,” says Matthew Diamond, chief executive of Alloy Digital, the youth-focused media and marketing group. “We are conditioning a whole generation that this is how they consume media.”

Ms Gombar did not bring a TV to her dorm room – a common item at universities just a few years ago. Neither did her roommate. If she wants to catch up on programmes, she opens her laptop and either streams or downloads episodes from sites such as Hulu or Apple’s iTunes.

“I don’t see the appeal in flipping through channels,” she says. “It seems like a waste of time to watch something just to watch it as opposed to finding something specifically that you want to watch.”

Instead of channel-surfing, millennials are spending their time with “venture content”, which gives them a role in creating the programming, says Jamie Gutfreund, chief strategy officer at The Intelligence Group, a youth-focused consumer insights firm owned by the Creative Artists Agency. She points to AwesomenessTV, now owned by DreamWorks Animation that boasts more than 872,000 subscriptions and features a wide array of short, edgy programming, from fashion to gaming and sports.

The model is a hit among younger millennials, Ms Gutfreund says, because they are involved with creating the episodes through questions and comments. The network features internet stars who already have amassed digital followings. The videos are often short clips, with the plots more simplistic than the carefully crafted 30-minute traditional TV shows. If certain videos “pop”, the network produces similar segments. Some of the most popular content that bubbles up then makes it into a more professionally produced half-hour comedy show on Nickelodeon, Viacom’s children’s network.

A recent episode of its series IMO! (for “in my opinion”) featured Andrea Russett, whose YouTube username is GETTOxFABxFOREVER, interviewing a girl group called GRL. Its most-watched video, with more than 5.8m views, features a prank where delivery men spill boxes of new iPhones in front of customers who waited in queues for days for the phone.

“In a fantastic old world there was must-see TV, but we don’t have must-see TV any more,” Ms Gutfreund says. “Entertainment is not just people creating things and putting it out there. People want to feel like they have a say. They want to be involved. We are becoming a nation of customised consumption,” she adds.

Sports and live cultural events, such as MTV’s Video Music Awards show, are growing in importance. This is a generation that has popularised the sharing economy, where they are more comfortable renting a dress or a car than owning one. Social currency comes with being in the know and sharing that knowledge on Twitter, Facebook and Instagram.

Sporting and other big cultural events often fuel that chatter. Take America’s National Football League. Tens of millions of US millennials regularly tune in to watch NFL games, but they watch differently. They are 50 per cent more likely to visit the NFL on Facebook and 59 per cent more likely to have shared NFL.com content with their friends on Facebook than other generations, the sporting league says.

The proliferation of always-on, always-accessible content is creating a new problem: a content glut. Millennials report feeling ridden with angst about keeping up. “It’s become work. It is responsibility. Kids are suffering from entertainment guilt for not keeping up to speed,” Ms Gutfreund says.

To cope, she says, millennials “binge view” TV programmes for hours at a time or conduct “media wipeouts” where they clear the DVR or Netflix queue to stay current.

Media companies and marketers are rushing to adapt. They are creating new story formats, designed for people to watch several episodes back-to-back. The new season of Arrested Development is expected to deploy some of these strategies. It also means the end of the cliffhanger, a staple of serialised entertainment since the radio era, as viewers are expected to tune into the next episode instantly.

Amid this fast-changing environment, marketers are tearing up their playbooks. The types of marketing that best resonate with millennials are not standard 30-second commercials but rather stories or actual products sponsored or created by the marketers. This includes fast-food chain Chipotle’s “Scarecrow” campaign, an animated short film and a companion mobile game app highlighting the dangers of processed food. Kit Kat, the chocolate brand, created a popular “Social Break App” that automated status updates on social media.

These campaigns are designed to be shared and make their way into the social media news stream – a way to reach this audience that is less likely to be parked in front of a TV or listening to a traditional radio broadcast.

“I use Facebook very frequently,” Ms Gombar says. “I have it on my phone, so I pull it up a billion times a day.”

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