When it comes to media consumption, consumers have never had it so good. From streaming services to social media, movies to music and video games, to a variety of linear TV channels, options abound. With so much choice, comes inevitable competition for the providers, as they try to court the consumer. So how can media and entertainment brands form meaningful relationships with audiences? According to the latest Digital Media Trends survey it’s all about understanding generational trends – in particular Generation Z, who could cause the next wave of disruption.
The 2021 survey, which was conducted by Deloitte’s Technology, Media & Telecommunication practice, found that Gen Z demonstrate strikingly different preferences. Other research—and experts—back this up. Let’s take a closer look.
Boomers love streaming video while Gen Z is obsessed with gaming. The group, aged 14-24, place video games as their number one entertainment activity (26%). That’s followed by listening to music (14%), browsing the internet (12%), and using social media (11%). Only 10% of Gen Z said that watching TV or movies at home was their favorite form of entertainment.
“For the first time since we started this survey, Gen Z did not pick watching movies or TV shows as their favorite media. It was gaming,” says Kevin Westcott, Deloitte’s Vice Chairman and U.S. Technology, Media and Telecom Leader. “Obviously there was quite a bit of growth during the pandemic. Gaming is a social activity and a way to stay connected. However, video games were already significantly growing before Covid-19. It will be interesting to see if these preferences persist now that lockdown rules are relaxing in the U.S.”
With the dominance of video entertainment being challenged, media companies need to take a more diversified approach. Publishers should experiment with different storytelling techniques on social platforms, and gamification is a great place to start.
“If a media brand isn’t in the games business, they need to look at how they can make things more engaging,” says Westcott. “Gen Z are looking for more participation and this is where transmedia could help. By utilizing a range of platforms, the audience can interact with content and influence it, rather than just watching it.”
Beyond connecting with the world, social media is a common gateway for consuming a wide range of media content. Although all generations use social media, consumption varies depending on age. According to the Digital Media Trends survey, Gen Z and Millennials both rank listening to music as their main activity on social media. However, Gen X prefer to consume news. The second most popular activity on social media for Gen Z was gaming. For Millennials it’s watching TV shows and movies.
Interestingly, despite these social media usage trends for news, 50% of Gen Z still rank social media as their preferred way to get news, while only 12% select news from network or cable TV. Boomers are the opposite, with 58% getting their news from network or cable TV, and just 8% using social media.
According to a report by Flamingo, commissioned by the Reuters Institute for the Study of Journalism at Oxford University, younger audiences differ from older groups in terms of what they want from the news. Young people are largely driven by progress and enjoyment, which translates into what they look for in news. As such, they want news to feel easy and accessible. That means creating formats that are native to mobile and social platforms, as well as including these ideas on their own websites.
The report, entitled How Young People Consume News, also suggests that the news media need to change the way they report the news. This includes tackling issues such as stereotypes, diversity and negativity. It should also influence how news brands present themselves and their content on third party platforms.
A report by the Institute of Practitioners in Advertising (IPA), called Making sense. The commercial media landscape, found similar disparities with the way different generations spend their time on commercial media. Ages 16 to 34 spend 53% on a smartphone or tablet and just 22% on a TV. Conversely, those aged 55 and above spend 53% of their commercial media time on TV and just 14% on a smart phone or tablet.
“The way to drive engagement in younger audiences on broadcast TV is to ensure content is available across multiple platforms,” explains Simon Frazier, Senior Research and Marketing Manager, IPA. “Younger audiences are always media multi-tasking, which is a challenge for media. But broadcasters that tie in with a variety of touch points and blur lines between entertainment and reality enjoy good engagement and a good commercial performance.”
According to a report from VICE Media, in partnership with Ontario Creates, Gen Z is redefining how content is being discovered, consumed, and shared. Three quarters of respondents (75%) report that original content is important to them. Music, video streaming and video games are the top paid services, while cable or satellite TV subscriptions don’t even make it into the top five for Gen Z.
This younger demographic also wants more diversity. Half say that there is a gap in gender diversity, sexual identity, and ethnic representation.
Along with good content, they want ease of discovery. Gen Z were born on social platforms so they play an important part of their content discovery. YouTube is their number one content source, with Instagram a close second, followed by Facebook, and Snapchat. TikTok is also gaining popularity. Gen Z tends to like content on social platforms that is transparent, with few barriers between the creator and the audience.
“With new voices and new platforms entering the media landscape by the minute, the competition for young people’s attention has never been greater,” said Julie Arbit, Global SVP of Insights, VICE. “Combine that with a young generation that has never been hungrier for content or savvier about how to access it and you have a whole new approach to content consumption. Understanding this new mindset is essential for anyone who is trying to reach this young audience.”
The VICE study also found a massive 90% of Gen Z are willing to pay for content if it offers better quality (61%), better experience (56%), and more convenience (50%). Only four in 10 said they wanted an ad-free environment. However, with consumers losing income due to the Covid-19 pandemic, Digital Media Trends noted an increase in churn rates, across all generations, in the past 12 months.
“During the pandemic, churn across streaming more than doubled,” says Westcott. “We call it ‘hit and run’. So, they join for the hit show and then leave to join another service.”
“Instead of focusing on adding new subscriptions, media providers need to shift their focus to long term subscriptions. And the way to do that is to broaden their range of content, and offer exclusive, original, high demand TV series, plus games and music.”
Despite the growth of subscription-based services, IPA reports that 63% of 16 to 34-year olds spend their time using platforms that are commercially funded by advertising.
“This represents huge opportunities for reaching this audience through commercial media,” says Frazier.
In the same group, four out of the top five commercial media properties are socially driven. These findings were backed up by Digital Media Trends. They found that social media influencers and ads on social media are the two most persuasive channels influencing younger generations’ buying decisions. They also typically liked ads on social media more than ads in streaming video content and other channels. On social media platforms, 62% of Gen Z and 72% of Millennials would rather see ads personalized to their likes and activity than generic ones.
Despite these differences, there is a growing convergence of behavior across several generations of consumers, as younger age groups influence older audiences.
“Ten years ago, we did a study on Millennials,” says Westcott. “We thought, as they aged, they would become more like us. But that didn’t happen. Instead, they have influenced older generations, who are now behaving in similar ways. The only way they really differ is that 26% of Gen Z rate gaming as their favorite entertainment, verses just 10% of Gen Z and 3% of Boomers.”
It is this preference for gaming that could challenge video as the leading form of media consumption across all generations. However, according to the IPA report, there was a significant drop in the correlation between how younger and older generations consumed commercial media during lockdown 2020.
It found just an 8% similarity between 16-34-year-olds and 55+ during lockdown 2020. This was down from 21% before the Covid pandemic and 58% in 2015.
“What is clear is that the lockdown has undoubtedly reinforced the dominance of key media for the different audiences and exacerbated the differences,” says Frazier.
So, while media companies may still be video-first, it seems that younger generations are moving away from this platform. The question is, are media brands and advertisers prepared to follow suit?