Wall St. Speaks Out: New Survey on Disruptive 18-49 Viewing

Wible39s Weekly Youth Survey The New 1849 Looks Disruptive JanneyMediaEntertainmentA recent Variety survey suggested we are seeing a shift in younger viewers39 video preferences towards content that39s distributed on nontraditional networks that are harder to monetize This has the potential to disrupt the TV ecosystem if younger viewers carry these patterns into adulthood Our proprietary followup survey of two age demos finds there is disruptive potential as the younger demo has higher instances of cord cutting OTT use and fragmentation The much higher than expected interest in HBO is intriguing and NFLX looks far more popular than its online competitors On balance we find the threat to TV may not come from a single online source but the aggregate of a massive long online tail and the viewer39s ability to find highly individualized contentFragmentation Headwinds Younger viewers watch more online video than traditional TV and rank NFLX enjoyment higher than traditional TV or any online competitor While a few YouTube nets were more popular than some marquee cable nets almost 38 of the younger votes were for over 1100 sources of online content The popularity and heavy use of NFLX along with the collective threat from a long tail of content stands to erode traditional TV ratingsad revenue and is a more difficult path to monetizeSubscriber Headwinds About 24 of younger viewers and 16 of older viewers indicate that they do not watch traditional TV Even after adjusting for a control question the rates remained elevated at 15 and 9 respectively Regardless of the accuracy the responses could be seen as a bad harbinger especially given that the younger cord cutting rate was 67 higher than that of the older demo Fewer subs would jeopardize the other half of TV39s monetization engineHBO Popularity HBO is in a strong position to improve monetization given its overwhelming popularity that exceeds that of ESPN and some broadcast nets This is interesting given the fact that HBO is not fully distributed and it is somewhat counterintuitive that its popularity is higher among the younger demo It leads us to question if cordcutting is purely an economic phenomenon as many have suggestedThe New Normal The survey shows that younger viewers are demanding increasingly targeted content to suit their personal tastes This can take the form of large libraries of content NFLX or very narrowappeal content certain YouTube channels However HBO39s popularity among this group also illustrates that amazing content can overcome fragmentation and appeal to a large audience Many traditional broadcast and cable nets may simply be losing their niche to the long online tailTraditional Idols Both demos voted in favor of traditional TVfilm celebrities in two different sets of questions with no YouTube celebrity in the top 10 This result is contrary to Variety39s survey but we did see a longer tail of votes for YouTubers and a greater portion of younger viewers that would prefer to be in an online video with their favorite celebrity rather than a TV show It appears the collective online appeal is more disruptive than any single online starTony Wible can be reached at twiblejanneycom IMPORTANT DISCLOSURESResearch Analyst CertificationI Tony Wible the Primarily Responsible Analyst for this research report hereby certify that all of the views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers No part of my compensation was is or will be directly or indirectly related to the specific recommendations or views I expressed in this research reportJanney Montgomery Scott LLC quotJanneyquot Equity Research Disclosure LegendIndividual disclosures for the companies mentioned in this report can be obtained by accessing our Firmamp8217s Disclosure SiteRead all Tony39s MediaBizBloggers commentaries at Wible39s Weekly JanneyMediaEntertainment Check us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Wall St. Speaks Out: New Survey on Disruptive 18-49 Viewing

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