In the film “The Matrix,” the character Neo is given the choice of taking the blue pill or the red pill. If he swallows the blue pill, the perception of life as it is goes on unaltered. If he takes the red pill, though, the veneer of security is ripped away and the reality of life is revealed. TV decision-makers are facing a blue pill, red pill moment.
If planners take the red pill, they’ll enter a world where watching TV is a niche activity among Gen Z, while TikTok and YouTube has become their TV. MrBeast is bigger than any streamed or cable soap or drama—much bigger.
Did Gen Z ever really fall in love with broadcast and cable TV? The body of evidence suggests it didn’t. Almost two years ago, research by Hub found 13-to-24-year-olds spend just 17% of their time viewing TV shows compared to those 35 years or older, who spend 43% of their total screen time watching TV. It found the older demographic spent about a fifth of their time gaming or looking at “nonpremium” videos on social platforms, while 13-to-24-year-olds spent twice as much time gaming and watching videos on platforms like YouTube.
Now it is YouTube, not Netflix or any other streaming service, that wins more TV viewing across all age groups. According to recent Nielsen viewing data, YouTube accounts for more than 10% of all adult viewing in the United States. All broadcast accounts for 22.6%, all cable 26.1%, all streaming is 41% (of which Netflix is the nearest single challenger with 7.9%) while Prime Video and Disney+ trail with 3.6% and 2.5%, respectively.
Data published by Hub in September showed that two-thirds of viewers turn to an online source for watching TV first. Only 26% of viewers say they default to an MVPD set-top box for viewing.
We’re due another detailed breakdown of Gen Z’s TV consumption patterns soon and you can expect the divergence in TV viewing styles to continue. However, we can already see that 60% of Gen Z viewers watch SVOD on a regular basis, compared to 13.3% for cable and 8.6% for broadcast, and they could switch in numbers to AVOD alternatives as subscription costs mount up.
This pattern of change is more or less an international phenomenon. In the United Kingdom, for example, the media regulator Ofcom’s latest viewing analysis for 2024 reported less than half of 16-to-24-year-olds watch broadcast TV in a typical week.
And yet, when it comes to the TV advertising business, the industry acts as if nothing has happened. I’d argue it is time to change how we think about TV in two ways.
Firstly, isn’t it time to recognize that as far as Gen Z, and to a larger degree millennials, are concerned, YouTube and similar platforms are TV? The fact that it mixes social content with TV and film production is surely irrelevant. Vested interest in the production world—which, of course, means TV channel brands—may attempt to promote a form of prejudice against user-generated and influencer-created video, but ultimately the audience will decide. And market power is shifting to younger viewers.
Influencers that produce some of the most entertaining content on video social platforms would argue that their TV product is as valid as any TV drama. And their production values are rising. But TV brands are increasingly using VSPs as a gateway to their product.
Social media’s hold over Gen Z’s attention directly influences what TV they do watch. According to a recent study by CableTV.com, 95% of Gen Z viewers age 18-24 decide whether they are going to watch a show on TV based on what they’ve seen on social media.
In the US, eMarketer estimates that more than half YouTube viewing is done via a CTV device and this could hit 60% by next year. A similar pattern is emerging in the U.K., with 34% of YouTube’s viewing inside homes during 2023 happening on a TV, up from 29% in 2022.
So, shouldn’t we all accept that the audience has decided that YouTube is TV?
Secondly, planners need to swallow that red pill and enter an AV planning matrix in which every 10-year age bracket is plotted by different AV tech and format consumption habits, cross-referenced by interest or behavior group segments and shopping data, as well as people’s relationship with advertising on different AV technologies.
Major sporting events are likely to remain an exception to the new matrix planning rules, which would likely generally identify broadcast TV as an older segment buy and YouTube and TikTok as primary Gen Z and Millennial buys with AVOD providing a more nuanced audience mix.
But watching TV is also an increasingly complex pursuit. Research by Hub shows more that 50% of Americans subscribe to more than three TV streaming services. Major sporting events such as NFL games are becoming spread across a selection of platforms—Nielsen credits Thursday Night Football for a 12% bump in Amazon Prime Video viewership in September.
Planning TV across the multiple formats and platforms is now byzantine in nature, but although the 20th century model still dominates and skews planner’s thinking about the audience, change is coming fast. Statista predicts OTT will be worth $193.6 billion in the U.S. in 2029, compared to $130.5 billion for “traditional TV and home video”.
A fresh way of thinking about how audiences consider TV as an experience both in terms of content and delivery technology is overdue. Let’s enter the matrix.
