 |
The Economist...
Media’s ageing
audiences
Peggy Sue got old
7/25/11
Viewers, listeners and readers are ageing fast. Oddly, media companies
don’t regard that as a catastrophe…
A FEW years ago Universal Music Group spied a gap in the market. How
about a CD for people who grew up in the 1950s and wanted to revisit
the pop music of their youth? The label pulled together songs by
British and American artists, some well-known (Buddy Holly, Roy
Orbison), others largely forgotten. “Dreamboats and Petticoats” was
released in time for Christmas 2007.
That gap turned out to contain a seam of gold. “Dreamboats and
Petticoats” has sold enough copies to be certified as double platinum.
It has inspired a West End musical and three follow-up albums, with
another due in November. In total the series has sold 2.3m copies,
mostly in Britain—a country where fewer than 120m albums were shifted
last year. And virtually everybody who bought the album forked over
money for a compact disc. “They don’t download, and they don’t want to
download,” says Brian Berg of Universal.
“They” are consumers in late middle-age or beyond, who increasingly
drive the music market. In Britain people aged 60 or over spent more on
pop-music albums in 2009 than did teenagers or people in their 20s,
according to the BPI, a trade group. Sony Music’s biggest-selling album
worldwide last year was “The Gift”, by Susan Boyle, a 50-year-old Scot
whose appeal derives in part from her lack of youth. And what has
happened to music has also happened to other forms of entertainment.
The noisy disruption of media business models by the internet in the
past decade has obscured a profound demographic transformation. Whether
they are buying music, listening to the radio, reading newspapers or
watching television, media consumers are ageing even more quickly than
the overall population. Rather than trying to reverse this trend by
attracting younger people, many companies are attempting to profit from
the greying of media.
Grey anatomy
In America the audiences of all four big English-language broadcast
networks are looking middle-aged. Since 2003 the median age of a
prime-time CBS viewer has increased by three years, according to
Nielsen, a research firm. Viewers of ABC and NBC are five years older;
Fox’s, seven and a half. In that time the median age in America has
probably risen by a year and a bit. Some shows are greying faster than
the networks that carry them, in part because they have fan bases that
are ageing naturally. The audience that tunes in for the desperate
housewives of Wisteria Lane is approaching 50 (see chart 1).
Indeed, every network except Fox had a median age of 50 or over last
year. That is significant because advertisers tend to be most
interested in how a show rates among people aged between 18 and 49. As
Alan Wurtzel, head of research at NBC, puts it, a growing proportion of
viewers are becoming almost invisible to marketers—“forgotten but not
gone”.
If broadcast television is growing old gracefully (helped by Botox
injections), newspapers are racing towards senescence. Between 2002 and
2010 the proportion of American papers’ regular readers who were aged
55 or more rose from 37% to 46% (see chart 2). Fully 43% of readers of
Britain’s Daily Telegraph and Daily Express are at least 65 years old,
according to the National Readership Survey. Such papers are littered
with advertisements for comfortable shoes, cruises and stairlifts.
The reason why newspaper readers are ageing so quickly is simple: the
young are abandoning print faster than everyone else. They may pick up
free papers to read on public transport, but when reception is good
they tend to plump for mobile phones and the internet. The Pew Research
Centre, an American think-tank, finds that 65% of 18- to 29-year-olds
describe the internet as their primary or secondary source of news.
Only 14% of people aged 65 or over say the same.
In music, too, the young have drifted to illegal file-sharing and, more
recently, to free streaming services such as Spotify. By and large, the
middle-aged and old have not. David Munns, who manages Bon Jovi, a rock
band that was formed in the early 1980s and is still going strong,
notes that older fans have more money and more scruples. They also
regard illegal downloading as “too much work”, he says. Bon Jovi’s
“Greatest Hits” was the 15th-biggest-selling album in the world last
year.
As the young cut back on conventional media, their elders consume more
of it. In Spain 54.2% of people aged 55 to 64 routinely listened to the
radio last year—up from 46.6% in 2000. As a result, the Spanish radio
audience has greyed even as overall listening has risen. Japanese
baby-boomers carry on buying music at an age by which earlier
generations had largely stopped. Singers who appeal to the middle-aged
and old, such as Hideaki Tokunaga and Junko Akimoto, rule the charts.
The same is true of television. British 55- to 64-year-olds spent an
average of five hours and ten minutes a day watching television last
year—50 minutes more than in 2001. The middle-aged and old now have
free digital channels dedicated to their tastes, such as ITV3, home of
wrinkly detective dramas, and the highbrow BBC Four. They have seized
on easy-to-use gadgets like digital video recorders, which increase
their enjoyment of television.
The young are not watching less TV. But some of their viewing is now
done through computer screens. And much of it is of unconventional
channels. Instead of the evening news, American 20-somethings watch
“The Colbert Report”, a spoof news show. MTV has moved beyond music
videos into reality shows, and is enjoying its best ratings in years.
Media outfits that appeal to immigrants and their children often have
youthful audiences. Univision, a Spanish-language broadcast network,
boasts a median age of 37.
Now they’re 64
Greying audiences are causing discomfort among media executives. But
not as much discomfort as you might expect, given the industry’s long
preoccupation with youth. The ageing of the large baby-boom generation
means there are a lot of potential customers in their 50s and 60s.
Furthermore, the executives argue, people of this age are worth much
more than in the past.
The practice of measuring television audiences by the number of 18- to
49-year-olds they contain is simply an historical anachronism, argues
Mr Wurtzel of NBC. David Poltrack, his counterpart at CBS, agrees. It
used to be assumed, he says, that older people had already worked out
which brands they liked and could not be persuaded to try new things.
But the middle-aged have taken to toys such as e-readers and iPads. Mr
Poltrack has devised an alternative way of classifying viewers that
emphasises tastes and attitudes to media (for example as “sports
enthusiasts” or “surfers and streamers”) rather than age.
It is not surprising that ageing television networks should argue that
the old are becoming more valuable. But the West’s economic slump has
given force to their claims by sapping the earning power of the young.
In March the unemployment rate among Americans aged 20 to 24 was 15%.
For 16- to 17-year-olds it was 29%.
Lack of work has combined with tighter lending standards to squeeze
young people’s buying power. Between 2007 and 2009 average spending on
new cars and trucks by Americans under 25 fell by half, according to
the Consumer Expenditure Survey. It fell by 31% among people aged
between 25 and 34. By contrast, expenditure by those over 65 was flat,
and the over-75s actually spent more, on average. The young also spent
less on audio-visual equipment and services—that is, television sets
and cable TV—while the old shelled out more. This helps to explain why
advertising money has flooded back to the ageing broadcast networks
since the recession. Advertisers are not so in thrall to the cult of
youth that they are prepared to overlook such a shift.
Desperate, but not for younger viewers
Another reason why media companies are not too worried about the ageing
of their audiences has to do with a change in business models. A firm
that depends on advertising needs to attract valuable consumers. A firm
that relies on subscriptions, by contrast, cares only whether its
consumers pay their monthly bills. And perhaps the strongest trend in
media in the past few years—stronger even than ageing—is the growing
reliance on subscription as a means of paying for content.
BSkyB, Discovery Communications, ESPN, Netflix: many of the media
industry’s best-performing companies and hottest stocks of recent years
rely on subscriptions. The recession may have slashed advertising and
discretionary spending. But most people carried on paying the bills for
entertainment. As a result, subscription-based businesses were able to
sustain spending on content. So clear are the advantages of these
businesses that even firms that have habitually relied on advertising
are moving to copy them.
As newspaper advertising has declined, publishers have raised the
prices of subscriptions and single copies. Last year 41.3% of the New
York Times’s newspaper revenues came from subscriptions—up from 28.8%
in 2007. Similarly, broadcast networks are battling for “retransmission
fees” (essentially a cut of subscriptions) from cable and satellite
distributors. As the broadcasters become less dependent on advertising,
sheer numbers will come to matter more than demography.
The clearest sign of this shift is the appearance of online paywalls.
Last month paywalls went up around the New York Times and the Dallas
Morning News. The websites of Britain’s Times and News of the World
began to restrict access to subscribers last year. Hulu, an American
website that carries broadcast TV programmes, and Spotify, a European
music-streaming service, are both pushing subscriptions.
One good reason for media firms to erect paywalls is that new media are
beginning to age, too. The proportion of people aged 65-plus who get
most of their news from the internet may be only 14%—but in 2006 it was
a mere 2%. Online video streaming began as a young person’s hobby but
has increasingly become mainstream. “Often it’s the young who adopt a
technology, but others follow them,” explains Patricia McDonough, a
television analyst at Nielsen.
With a few exceptions, media firms have found it hard to make money
online. Consumers seem to tolerate fewer ads, and rates are low. When
digital media were the province of youth, this did not matter much:
media firms could argue that they were at least promoting their brands
to young people, while deterring them from piracy. But let the
middle-aged and the old, too, discover they can have entertainment for
nothing? That would not do.
Read it at the Economist
|
