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Mar 14, 2016

When Watching TV No Longer Requires A TV

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Two summers ago, my daughter Eleanor and I had a spirited back and forth about her favorite show, Peppa Pig. Basically, she wanted to watch the show through the Nick Jr mobile app, but our family iPad was already being used and our other devices didn’t have any power. I suggested we try and find it on the living room TV instead. Surprisingly, Eleanor agreed, walked over to our 55-inch TV and swiped her finger on the screen just as if she were unlocking an iPhone, thinking that would turn it on. Realizing what she had done, her sheepish grin said it all “Wait, how do you turn this thing on?”

Since this happened, we’ve cut the cord, coming to the realization that most of what we watch is from an online source and the programming we do watch on broadcast can typically be accessed online one way or another. But the devices we use to watch video also significantly impacted the decision. Like many families, we own several decommissioned iPhones, which have found new lives as video players, even becoming the preferred screen devices for my kids. According to NPD/Connected Intelligence’s Application & Convergence Report, TVs remain widely used but mobile devices figure prominently into the viewing equation among younger consumers. In fact, smartphone users 34 and under over-index for using smartphones to watch online video (31 percent compared to 20 percent overall) and tablets (41 percent compared to 30 percent).

The fact that younger viewers are more likely to turn to mobile devices to watch video is innocuous enough, but does it point to any challenges down the road for sales of TVs, Blu-ray players, or even soundbars? My cord cutting experience has taught me TV viewing habits are engrained in our psyches (I’m still adjusting to the new cord cutting era at my house) and by that reasoning, my kids are likely imprinting their habits on smartphones and tablets more so than the television, since they spend a majority of their viewing time on those devices. This is probably happening naturally in some homes that have cable but is even more pronounced in non-cable households like mine.

A few trends in hardware sales and usage may be pointing to a shift for young viewers. Even though tablet sales declined in 2015, NPD’s Consumer Tracking Service reports more tablets are being purchased for kids and teens – in both absolute terms and in unit share- which has increased from 13 percent in 2012 to 19 percent in 2015. Conversely, unit sales of smaller screen TVs (under 44 inches) intended for those under 18 have declined 50 percent since 2012 and now make up just 5 percent of all sales. And NPD’s recent Kids Share of Time and Wallet study, a national survey of moms about their children’s’ activities showed that while a majority (75 percent) report their kids 14 and under still watch traditional TV, 47 percent of kids also watch TV shows, movies, and videos on a mobile device during a typical week. Further, nearly a third added their children are spending more time watching video content on devices this year compared to last.

Obviously, these data points alone don’t say definitively that young people are turning away from TV in a manner that will impact sales. However, the data does reflect a preference for small, personal screen devices for video consumption. New generations of consumers are important to any industry but are particularly vital to technology since they are on the cusp of entering life stages like homeownership and parenthood where their need for new technology products is heightened. Today’s Millennial and younger generations are entering a favorable technology market where many products including big-screen TVs are more affordable than they’ve ever been. The question isn’t if they will ever buy a TV, because they probably will. Rather, the issue is when will they decide to buy one, how much will they pay, and how quickly will they buy another – all things that a heavy reliance on mobile devices could potentially disrupt. Bigger screens still provide a better viewing experience, but in Eleanor’s case, complete control over what, when, and where to watch is the biggest draw to watching video on an iPhone. And as the saying goes, old habits are hard to break.

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