Millennials are forcing change on the TV industry—and making it better

Taking over TV
Taking over TV
Image: AP Photo/Charles Sykes
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This post has been updated. 

Will September, 2014 go down as the month Hollywood finally figured out millennials?

Here has what has happened in the past few days:

  • Time Warner, the owner of HBO, made its most encouraging comments yet on the prospect of it unshackling HBO Go. CEO Jeff Bewkes said the company was “ seriously considering what is the best way to deal with online distribution” for the service;  that “the broadband opportunity is getting quite a bit bigger” and the ability to sell HBO Go on a standalone basis is “becoming more viable, more interesting.”
  • At the same conference today, 21st Century Fox chief operating officer Chase Carey said his company was exploring skinned down and personalized internet-based TV products. “That 20-year-old segment, is a segment over time we have to address,” he said. “There there are a different set of habits… We want to make sure we figure out how we make products that work for them, but products that work for us and we think there are real opportunities to do it”
  • Viacom, the owner of Paramount Pictures, MTV, Nikelodeon, Comedy Central and other channels, struck a “landmark” deal with Sony for a new internet-TV service being offered by the Japanese media and technology conglomerate. It will also include Viacom’s movies on demand.
  • Dish Networks, the satellite pay TV company, inched forward with its plans for a personalized, internet streaming product aimed at “cord cutters, cord nevers… and cord haters”. The service will likely be called Nutv. We already know that it will include content from the Walt Disney Company, including, crucially, ESPN. The sports juggernaut was heretofore pretty much only available through a full pay-TV subscription. Macquarie analyst Amy Yong this week described the service as a “killer app” that will “shake up the landscape and target a hard-to-reach generation.”

Four of the biggest Hollywood studio companies—Time Warner, Fox, Viacom, Sony—are alert to the reality that consumers, particularly younger ones, want to be able to watch their favorite shows over internet on the device of their choosing. Three of them are progressing with concrete plans to make that easier.

There is conflicting evidence about the magnitude of “cord-cutting” (abandoning pay-TV subscriptions) among Americans aged between 18-33. But it is safe to conclude that they are less likely to sign up for pay-TV subscriptions in the first place. As the age cohort becomes increasingly important (Goldman Sachs said in May it expects millennials to eclipse baby boomers in discretionary spending within 5 years)  it is becoming increasingly important for companies to tailor products for them.

In television, it is starting to happen.

Update 3:51pm. Quotes from Chase Carey have been updated to reflect a more detailed transcript provided by FactSet.