Commentary

For Younger Users, Data And Bandwidth Will Be A New Currency

The young are different. All digital media, and especially the mobile segment, has known this basic truth for years. Young adults not only embraced digital platforms more wholeheartedly than any other segment, but they also tend to invent new ways of leveraging the platform. Analysys Mason reconfirms this in their latest survey of over 6600 consumers across the young adult and adult segments in France, Germany, Poland, Spain, the UK and U.S. The young adult or 18- to-24-year-old segment and the 25- to-34-year-old groups have vastly different ways of using the data channel for messaging and social exchanges then do older segments.

IP and data channel messaging such as voice over IP and alternative text-messaging apps are much more prevalent among younger users. In this survey, 40% of the 18- to-34-year-old segment used IP-based messaging, compared to only 20% of those 65 years old and up. Even SMS use remains lopsided in being accessed by 91% of 18- to-34-year-olds compared to 67% of seniors. In the UK, 53% of the youngest segment -- 18- to-24-year-olds -- use IP-based messaging.

Even voice over IP usage, which is relatively limited in its use internationally, is accessed by about 10% of those under the age of 35.

Perhaps the most important part of this survey reveals that data is the new currency among the younger demos. Carriers that offer more data as part of their packages are appealing to the younger demographics, whereas offering more voice access is more appealing to the older demographics. As the younger segment becomes more sensitive to the cost and value of data, which they are consuming at much higher rates, there is an opportunity for media and marketers to leverage this awareness. For instance, we have already seen some rumors and discussions about content providers cutting special data deals with carriers that would remove their brands streaming media from a consumer’s overall bandwidth use.

The carriers almost certainly will be looking to cut these sorts of deals. This survey suggests that some of the biggest cash cows for mobile carriers, voice and messaging could migrate very quickly onto the data channel, where it is harder for the operator to gain incremental revenue beyond selling tiered data access. The video chat systems offered by Apple, Google, Facebook, Skype and others are growing in popularity, and alternative messaging like Imessage and WhatsApp Messenger (along with Facebook) will limit growth of the Goldmine that has been SMS for the last decade.

This dynamic will become even more pronounced as we begin to see smartphone penetration peaking in advance markets, thus limiting the growth opportunities for carriers looking to sell more data plans. Since the app revolution started in 2008, carriers very quickly found themselves resigned to selling dumb -- albeit lucrative -- pipes to smartphone owners. They continue to scramble to find ways to get their businesses back into the app economy.

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