As younger consumers -- and older ones, too -- unquestionably migrate to different TV video consumption habits, operators like Verizon (NYSE: VZ) and Comcast (NASDAQ: CMCSA) may be "over-thinking" the demands for new kinds of content.
"In our opinion, the industry is going millennial-crazy due to a perceived loss of eyeballs for traditional content," said Jefferies analysts Mike McCormack, Scott Goldman and Tudor Mustata in a recent note to investors. The analysts said consumers are "quickly moving to non-traditional device watching, fueling the need for apps-based viewing options."
"That's not to say that these 'device watchers' don't want traditional programming," they added. "We don't see a need for specific content aimed at a particular generation. Clearly, there is a generation that enjoys user-generated content, but there are already a tremendous number of outlets for that content."
Last week, Verizon officially launched its Go90 service, an ad-supported mobile video programming service that -- in addition to traditional content from suppliers like CBS, ESPN and Scripps Interactive -- has a heavy focus on short-form online video programming from makers like Awesomeness TV.
Also introduced last week, Comcast's Watchable -- also ad-supported -- is even more focused on the kinds of user-generated, short-form video, that has already been found in abundance on Google's YouTube (NASDAQ: GOOG) platform for a decade.
"We believe the real missing piece among device watchers is for traditional programming offered in an a la carte format," the Jefferies analysts said. "Contrary to popular thinking, many of these users would be more than happy to pay the same they would pay for a bundle, as they would for the handful of programming products they truly value."
Verizon's go90 launches wide on Android and iOS devices
Comcast launches beta version of ad-supported Watchable video service
Go90 to leverage LTE Multicast, but Verizon isn't sure how much