The lockdown-driven digital entertainment boom, combined with the direct-to-consumer (DTC) ‘big bang’ moment of 2019–2020, provided the much-needed tipping point for video streaming consumption to go mainstream. A five-year transition to streaming was compressed into 12 months as the hiatus of ‘in real life’ (IRL) entertainment led to a 12% increase in digital entertainment time, in which video was the biggest single winner.
One of the second order effects of the shifts in behavior was a surge in streaming adoption by older consumers. While those aged 55 and older only comprised 19% of video subscribers in the major English-speaking markets in Q4 2020, this figure is set to increase both due to naturally aging populations and increased adoption by older demographics. More significantly for DTC services, the 55 and older demographic makes up the core of traditional pay TV subscribers, who are familiar with long-term, high-margin subscriptions, and have higher and more stable discretionary incomes than younger demographics.
The grey tidal wave of later digital adopters is now sweeping into streaming and they will have as profound an impact on the evolution video streaming as cord cutters have had on traditional pay TV.
According to figures in MIDiA’s latest video report, The rise of the silver streamer, nearly a fifth of over-55s are already top-spending DTC subscribers. 55-year-old and up consumers are over twice as likely to spend more than $10 per month on video streaming as they are to spend $5-10, and six times more likely to spend more than $10 than $5 or less. With the 55+ age group making up 43% of $10+ monthly pay TV spending, they are poised to disrupt traditional pay TV revenues when they leave and will subsequently dominate streaming subscription revenue income going forwards.
Crucially, a 55-year-old streaming subscriber can be expected to have another 30 years of entertainment monetization ahead of them, making them a predictable core subscriber revenue constituency for streaming services. The increasing reliance by DTC services upon their older subscribers for monetisation means that they will become more conservative in their innovation choices to reflect the change-averse profile of their older customer base.
The streaming exodus of TV audiences will also accelerate linear business disruption. Apart from 55 year old and up subscriber revenues being lost to pay TV operators, traditional linear TV will also see their ad reach metrics hit, if or when the silver streamers depart en masse. The dirty secret of traditional TV advertising is that 68% of older demographics who make up the core of TV audiences disengage during ad breaks. While they remained within the TV customer base, they could be claimed under analog reach metrics as an addressable commercial audience. Their departure will lead to an inevitable reappraisal of the reach of the TV ad market.
Once the current 55 and older cohort has gone through binge viewing and savvy switching, they will seek out a streaming version of what went before— curated content, and unified billing and user experiences. Cue the case for reaggregation. The logical outcome of this will be long-term streaming memberships for services offering the four pillars of traditional pay TV entertainment, as well as factual, news and sports. This will largely resemble the content and user experience problems solved decades ago by traditional pay TV. However, the big differences will reside around the on-demand functionality of streaming pay TV and the localisation deployed to replicate the competitive positioning of local news and sports for older demographics long familiar with this format in the analogue era.
Silver streamers will thus dictate how the DTC revolution will in fact become a DTC evolution over the next three-plus years.
The findings mentioned are from a recent report by MIDiA Research: The rise of the silver streamer: 55+ demographic reshapes video streaming.
Tim Mulligan is the research director and lead video analyst at MIDiA Research – the entertainment intelligence and consulting firm. MIDiA works with businesses in the space, from TV broadcasters and production companies to streaming services, tech companies and financial organizations. Tim’s research encompasses the entire online video economy, with a key focus on how streaming is transforming the video consumption landscape. Prior to joining MIDiA Research, Tim ran a number of technology starts-ups focused on the TV and film industries.MIDiA Follow MIDiA on Twitter and LinkedIn
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce Video staff. They do not represent the opinions of Fierce Video.