Deloitte’s 2017 Digital Democracy Survey

By Aarthi Rayapura May 23, 2017

Every year, Deloitte releases their Digital Democracy Survey, a multi-generational view of consumer trends in technology, media, and telecom. The 11th edition focuses on five generations, providing insight into how consumers ages 14 and above are interacting with media, products and services, mobile technologies, the internet, attitudes and behaviors toward advertising and social networks, and what their preferences might be in the future. Some of the key findings from the 2017 survey include:
• Seventy-four percent of consumers subscribe to PayTV and 49 percent of consumers subscribe to paid streaming video services.
• Almost half (49 percent) of U.S. consumers and nearly 60 percent of Gen Z, millennials, and Gen X subscribe to at least one paid streaming video service.
• Seventy-four percent of consumers across U.S. households still subscribe to pay TV such as cable or satellite, but 66 percent of subscribers say they keep their pay TV because it is bundled with their internet.
• Nearly three quarters (73 percent) of U.S. consumers (up 3 percent from 2015) and nearly 90 percent of millennials and Gen Z have binge watched video content; almost 40 percent of millennial and Gen Z binge watchers do so weekly. Millennial and Gen Z binge watchers report watching an average of six episodes, or five hours of content, in a single sitting.
• The device of choice for key demographics remains split; Gen Z and millennials spend about half their time watching television shows and movies on devices other than a TV. Additionally, Gen X favors the TV by over 60 percent and baby boomers watch over 80 percent of programming on the TV.
• With 84 percent of U.S. consumers on social networks, social continues to gain traction well beyond socializing; 32 percent of millennials use social media as their primary news source and over 70 percent have used social media to resolve customer service issues in the last year.
• Mobile advertising is the big opportunity in 2017; 70 percent of consumers say the mobile ads they receive are currently irrelevant; 45 percent of millennials are using ad blocking software.

Aarthi Rayapura spoke to Kevin Westcott, Vice Chairman and U.S. Media and Entertainment leader at Deloitte on the survey and OTT video business strategies:

What are the key takeaways from this year’s survey?
In a nutshell, American consumers continue to stream,binge watch, and demand more media. As the growing forces of social media and over-the-top services continue to accelerate, particularly among millennials and Generation Z, it’s clear that the consumer rules. The shift to streaming, mobile, on-demand services, and personalization are significant opportunities in 2017. And brands can bring new value, services, and incredibly entertaining content to empowered consumers across all age groups in a manner that can be monetized.

Where are millennials finding and viewing video content? And what are the implications for OTT video companies?
Twenty five years ago, technology was introduced to the household primarily by middle-aged men with a little bit of disposable income. What we now see is that the middle-aged men no longer have influence over the technology decisions in the household. It’s being driven by their children or their young children, young adults. We’ve also seen that every single trend that starts typically with teenagers and 19 to 24-year-olds grows upward. Media consumption over the last few years, where over-the-top may have been introduced early by the millennials, is now being used by the Gen Xers and the baby boomers. The number of services subscribed to the household is larger in the younger generation, but growing in the older generations.

We found that Gen Z and millennials spend about half their time watching television shows and movies on devices other than a TV. Millennials actually stream more than they watch live TV. They also are avid binge watchers of content (nearly 90% of millennials and Gen Z) and have changed the way that content is consumed. They’re spending a significant amount of time watching content on streaming services, and that’s where they’re getting all their content and information.

Given that there’s almost no advertising on streaming services and nearly half of them use ad-blocking software anyway, how do you reach these consumers? How do you introduce them to products, services or new shows? That’s really the challenge. In our survey, Gen Z and millennials indicated that social networks are more effective than TV commercials for learning about new shows.

What are some of the things that companies should be thinking about in terms of acquisition and retention?
Customer acquisition is extremely expensive in our business, so it’s really about how we use data. What I ask people is, “Tell me, what is your business problem?” If it’s churn, let’s figure out how we predict churn. If it’s customer acquisition, let’s figure out how we lower the cost of acquisition. If it’s increasing revenue per customer, let’s figure out what is it about that customer that I can learn through different channels that’ll help me sell them something additional. That’s what you should focus on when you think of your customer base.

You can identify someone who may churn six months before they churn. It’s a lot easier to try to retain that customer than to try to attract a new customer. How do you identify the potential to churn? Is it through their use of subscription? Is it through some activity on social? Are they moving? What else can I identify that gives me a trigger to do something to give them the next best offer to retain them? We hear some talk about down selling. While it sounds negative, if I can take someone who’s
currently spending $79 a month and retain them at $59 a month, that’s a lot better customer than losing that customer altogether.

How do you nurture a customer? What’s the data you should be concerned with?
Usage data is very critical. If I think about full subscription services, where there aren’t transactions happening except for the monthly ones, I would actually look at the actual usage. But in general, gather all the data you possibly can to get a comprehensive view of your subscribers.
For example, I can gather third-party information about my sports subscribers and understand what else they’re interested in. I might find out that this sports subscriber, a mom or a dad, a dad who might be a sports fanatic, they also have two young children. Maybe I can target them with children’s content. That’s where getting to and understanding the customer is actually critical because every one of our customers is not single dimensional. They may be sports fans on weekends, but we don’t
know what they’re doing during the week. We don’t know what their family situation is unless we have all the data we can get about this and learn how to target them.

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