The ‘young people’ video on demand myth

The enduring myth that video on demand is a panacea to reach young people is based on flawed logic, argues PwC's Ben Shepherd.

There is a common and incorrect assertion around video consumption that has become widely accepted, despite being minimally scrutinised.

That theory is that young people “don’t watch TV” and instead are consuming video on apps, mobiles and online in ravenous amounts. There is also the secondary incorrect assertion that some programming is watched by people over 35 on TV, but by those under 35 on on demand platforms.

I struggle with this logic as I don’t buy the idea a piece of programming has a different appeal to a different demographic based on the device they view it on. The concern in this myth becoming accepted without challenge is its impact on how media investment is moving.

Video on demand is being generalised as a way of reaching ‘young’ (read <35yo) people despite only a handful of platforms having reach and scale to this cohort in any material sense.

See the below table:

YouTube as a platform reaches 93% of 18 to 34-year-olds online per month. The remainder – including other video on demand services – have single digit reach against this cohort.

This is not to say video on demand platforms are not worth consideration – they are – but the strategic rationale and purpose is going to be similar to buying linear TV as the audience profile isn’t that much different. Most video on demand platforms have much higher volumes of audiences over 35 than those under 35.

Again, see below:

Most are majority over 35. In the majority of cases, the most engaged (in terms of hours spent per user) on each platform is aged 25-34, however the user volume is in older audiences.

Video on demand is not a “young person” trend – it is an “all person” trend and needs to be positioned as such. It isn’t really at all about capturing “lost TV viewers” despite what many may say. Over 35s – dominant in video on demand – also watch a lot of broadcast TV. The 35-49s watch 71.2 hours per month, 50-64 watch 114 hours a month. Over 88.8% of over 35s watch prime time TV at least weekly. 

This raises questions around whether video on demand’s role, particularly with on demand TV channels, should be more about trying to reach 35+ audiences rather than being incorrectly positioned by many as the panacea to reach young people. If you want to reach young people – the platforms are obvious and clear.

The challenge for everyone else is what is their unique proposition and where is their unique audience position? Do they aim at older ‘TV light viewers’ or do they seek to compliment broadcast? It’s a critical strategic question as often the rates charged on on demand platforms can exceed those charged for broadcast by two to four times.

The rationale has often been either the “young people” argument or the “incremental reach” argument. The question now is – how true are either of these statements?

Ben Shepherd is a director at PwC.

(Editor’s note: The original version of this article included data from Foxtel, Instagram and Snapchat. However Nielsen subsequently informed Mumbrella that these channels have an insufficient sample to report in DCR Monthly-Total Video, so the data has since been modified.)


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