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FEEDING THE CONSUMER BEAST, ONE MEDIA AT A TIME
Demanding Boomers, Multitasking Gen Yers Decide What, How and When

January 03, 2006
QwikFIND ID:
AAR26X
By Greg Lindsay
Edited by: Ann Marie Kerwin


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NEW YORK (AdAge.com) -- Wayne and Tyna Donelson, 56 and 54, don't have much time for most mass media. A married pair of small-business owners who work from home in rural Massachusetts, they subscribe to the local paper and a few magazines, rent DVDs voraciously and, thanks to Comcast's video-on-demand package, watch yet another movie together every afternoon.

Photo: Paul Sakuma

"I don't need anything else out there," Ms. Donelson says.

Her daughter, Louisa, is more succinct. "F--k TV," the 22-year-old senior at the Rhode Island School of Design says in her Friendster profile.

Louisa doesn't have much time for other media either, unless you count her perpetual text messaging, wireless Web surfing and downloading torrents of music to her Apple iBook.

Redefining media usage
Although they aren't aware of it, the Donelsons are helping redefine media usage each in his or her own, uniquely generational way. They're unconsciously guided by the principles that PricewaterhouseCoopers claims will rattle the media landscape over the second half of the decade: They only want their media when they want it, how they want it and in whatever quantities they want it.

While Louisa's boomer parents are reinventing Hollywood as a DVD factory, she and her friends in Generation Y are running traditional distribution channels through a blender, watching TV on iPods, discovering new music on MySpace.com and then texting each other about it on their cellphones.

Americans in 2006 will consume, on average, more than 9.5 hours of media daily and pay $888 in the course of the year for media options ranging from magazine subscriptions to DVDs, according to the forecast of Veronis Suhler Stevenson.

That breaks down to a media day devoted to about 4.3 hours of TV, 2.7 hours of radio and satellite radio, and roughly a half-hour each of the Internet, newspapers and music CDs. And we'll still find time to watch DVDs, play video games, and read books and magazines, not to mention spend more minutes fiddling with our cellphones. By 2009, we'll add another 10 minutes of media consumption a day, thanks to finely honed multitasking skills.

Less time with ad-backed media
By 2009, marketers will have increased their annual media support by $100 billion from 10 years earlier, according to Veronis Suhler. But this generous ad support won't stop consumers from spending less time with ad-supported media. Consumer time spent with ad-backed outlets is expected to fall to 54.1% from 63.6% of their total media time.

In the first half of this decade, consumers increased their media spending at a faster rate than advertisers did, and they'll keep spending long after the average American breaks the $1,000-a-year barrier in '09.

Where's the money headed? To Apple Computer's iTunes Music Store, which maintains a viselike (70%) grip on the digital-music market with its 99-cent song downloads. To cellular carriers for $2.49 ringtones and video games. To video game makers Microsoft Corp. and Sony Corp. To satellite radio services like Sirius, Howard Stern's new home as of this week. And not to mention broadband service providers.

There still will be a few ad-supported constants in this brave new media world -- somehow, we'll find the time to watch even more TV -- but even the mass-est medium of all will bow to our whims, thanks to DVRs and video-on-demand.

There are presumed to be plenty of losers as well -- anyone stuck burning CDs, for example, or publishing newspapers.

What's driving the change behind the change? It's too easy, and wrong, to chalk it up to "technological disruption." (Microsoft's WebTV was once disruptive, too.) Consumers already wanted control; right now, they're embracing the media for which technology has finally made it an option.

'Nation of control freaks'
"We're becoming a nation of control freaks, and it's all technology's fault," says trend watcher Michael Tchong, who points to the "ubertrend" of "time compression" as the culprit.

"Media companies need to start changing their models to adjust for this," says Peter Winkler, marketing director in PricewaterhouseCoopers's entertainment and media practice. "A lot is just experimentation" -- witness the recent flurry of TV shows-on-your-iPod/PC/DVR announcements -- "but we're going to see more content on a pay-per-view basis, which in reality will become an ad-per-view basis. Consumers may not pay for much of that content themselves, but they'll accept the ads."

Time Warner's America Online is betting exactly that with its new ad-supported streaming video channel In2TV. That may be one tactic for marketers to get back into the game, but they shouldn't stress themselves out over the technology.

For technology isn't the common factor shared by the media that Veronis Suhler and others have anointed the winners -- interactive TV and wireless content, home-video options like DVDs, video games, digital cable and the Internet. Demography is.

Reshaped by two generations
The media landscape of the next five years will be reshaped by the whims of Gen Y and their boomer parents (while Gen Xers, as always, will be overshadowed by the two).

The youngest generation will be the focus of technological innovation, while the boomers may prove to be a wild card for no- or slow-growth media increasingly written off by advertisers because of their aging audiences.

Boomers represent "a huge segment, they've been treated specially their whole lives, and they have lots and lots of money to spend," says Mike Hess, director-global research and consumer insights at Omnicom Group's OMD, New York.

And how is all of this likely to play out? Well, Gen Y already comprises the bulk of all text-message senders and ringtone downloaders, despite owning the fewest cellphones of any generation. They're inveterate video-gamers, causing young men to begin abandoning movies, TV and magazines for pixilated worlds at home and forcing marketers to chase them there.

And Gen Y's tendency to hang out at virtual clubhouses like MySpace and Flickr -- where they produce their own blogs, share photos and invent a parallel universe of their content -- is propelling Internet ad growth at a 20% annual clip. (Thus explaining the $580 million News Corp. paid for MySpace owner Intermix Media.)

Mom and Dad reinvent Hollywood
Gen Y's parents, meanwhile, are staying home to watch movies. They're behind the reinvention of Hollywood's business model as a giant DVD machine and causing the collapse of the theatrical window (because they can't be bothered to head to the theaters). They're the target customers of the telcos and cable companies racing to bundle every conceivable service.

Boomers' coming to grips with mortality was the reason that religion was the fastest-growing book segment in 2004. (Who do you think bought 25 million copies of "The Purpose-Driven Life"?)

And, as it happens, boomers play games, too. Electronic Arts, with its $680 million acquisition of cellphone-game maker Jamdat, is positioned to pursue the swarms who while away the hours playing games like poker on their computers and handsets.

One might muster a million examples to show why demography is destiny when it comes to media usage this decade. The surging number of Gen Y Hispanics even underlies the recent boom in newspapers and magazines aimed at the ethnic group.

Mr. Tchong is correct when he declares "technology has spoiled the consumer and made it into a beast looking for customization." The media challenge will be figuring out exactly how America's youngest and aging members want to be fed.


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