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RSSThe latest trend is trying to convince consumers to pay for the content they currently get online for free. Surprisingly, research conducted by Frank N. Magid Associates in June indicates that consumers are willing to pay for access to the content they enjoy. In fact, members of Gen Y are more likely to say they will spend money than Gen Xers and Baby Boomers.
By most expert counts, Baby Boomers control most of the wealth in the United States. However, their attitudes towards paying for content reveal a less than ideal product target. Across every category tested, Baby Boomers were less likely than Gen Yers to say they would pay for content.
For instance, 80% of Gen Yers say they would pay for music, whereas only 52% of Baby Boomers say the same. Sixty-nine percent of Gen Yers would pay for professionally produced television programming, whereas only 51% of Baby Boomers say the same. The gap narrows when it comes to news and information, 43% of Gen Yers say they would pay versus 36% of Baby Boomers -- but the gap still exists. Paying is defined as exchanging money; it does not include accepting ads for content.
If charging for content is the goal, then it is imperative that Gen Yers have a seat at the table. The challenge is not in whether they will pay, but what Gen Y will pay for. There are several ways to approach the challenge. One is to put walls around your content and hope it is desired enough to warrant payment. Another approach is to evolve a current or future product into a brand that Gen Yers find indispensible.
We know that Gen Yers are cost conscious, but we also know they will pay a premium if they see a concrete benefit. The product or service must solve a problem, provide exclusive access to content, or emphasizes a custom user experience.
Gen Y influence is only growing -- by the end of this year they will comprise 47% of the 18-49 advertising demographic, whereas Baby Boomers will only comprise 17% of the 18-49 demo. As we ride the Gen Y wave, even more money-making opportunities are revealed. The evolution will not be easy, but it will be worth it -- just make sure you factor Gen Ys into the plan.
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The problem with the POV in this article is the misunderstanding of the demography. 80% of Gen Y who will buy music=48 million people; 52% of Baby Boomers who will buy music = 41.6 million people. The percentages seem to indicate a huge gap, but the cohort size makes the reported percentages nearly equal!
69% of Gen Y will pay for TV Programming = 41.4 million versus "only 51%" of Baby Boomers = 40.8 million people. And 43% of Gen Y who will pay for news and information = 25.8 million Gen Yers versus 36% of Boomers = 28.8 million! Yes, Lindsay, "the gap still exists." It's just contrary to your argument.
Finally, "Baby Boomers only comprise 17% of the 18-49 demo" because the youngest Boomers are 45 this year! They are the tail of the Boom. And how is that relevant? The fastest growing segment of the population is 60-64 year old cohort - leading edge Boomers. People aged 50-64 will increase by 8.1 million while the number of people 30-44 will shrink by 2.7 million. Gen Y, or the Echo Boom as they are sometimes called, is the next demographic spike in this country, but companies who myopically pursue them will be missing an enormous Boomer population.
This is especially relevant in a market where your industry peers may be offering a competing price: "FREE"