• by Sam Vasisht , June 7, 2011

A few years ago, the term "YouTube generation" emerged, describing those who watch video online on their PCs.  What a novel idea!  The YouTube generation was generally identified to be males between 18 and 34 years of age. Even before YouTube, I built my first Internet TV/OTT video platform while at a then-prominent online media company.  The big debate was not what to build, but whether anyone would even watch video online.  All that changed very quickly post YouTube.  

How quickly things continue to change in our industry.  You don't hear the term YouTube Generation anymore -- because everyone is watching online video. According to Pew Research Center's The State of Online Video Report of June 2010, more than half the Internet users across any age and gender demographic in the U.S. watch online video.

The discussion is now shifting to who is not watching TV.  The debate on the myth or reality of cord-cutting has not been settled yet.  There are far too many variables at play, not the least of which is the recessionary economy.  There undoubtedly remain behavioral differences between age groups, particularly since younger people reaching adulthood have never known the world without the Internet. Soon there will be others who have never known the world without Internet video.

The Wall Street Journal recently ran an article entitled "TV Networks See Key Audience Erode" that describes how -- while the overall TV audience is growing -- the number of viewers in the key demographic of 18-49 is steadily declining.  The data comes from Nielsen, and I am sure we will see a lot of deeper analysis and dissection of this data in the coming weeks.

The article at the outset states a popular assumption, of cord-cutting: "Fewer young people watched TV on traditional sets over the past television season, the second consecutive year of decline as viewers face a proliferation of ways to watch TV shows."

It seems intuitive to me that the younger segment of that much desired 18-49 demographic will naturally gravitate to their laptops, tablets, and mobile devices as the preferred method of entertainment. But whether this is the primary or only reason for the decline in traditional TV viewing cannot be ascertained. 

For one, the economic conditions are most likely affecting this younger demographics' habits more than that of older ones.  For example, if a new college graduate is unable to find a job or is under-employed, chances are he will hold off on subscribing to cable, or even purchasing a TV set.  Older householders already set in their habits may continue with a pay TV subscription service, even if the economy is tight. 

Such and other considerations aside, I thought one of the interesting aspects is the cut-off age of this demographic: 49 years.  The youngest of the baby boomers are in the process of transitioning to the AARP crowd - i.e., 50 years of age.  I thought it would be interesting to see how much of this decline in viewership by the 18-49 demo g can be attributed to the size of this (baby boomer) segment moving like a massive tide through the economy over the years, and the general aging of the population.

Here are the numbers derived from the US. Census Bureau for 2006-2009.  While 2010 numbers are not available, I think the trends are reasonably clear.  (There are also slight differences in the groupings on account of how the census data is presented. For example the age groups are broken out as 15-19 and then 20-24, so I have used age groups from 20-49 as opposed to 18-49.)

The population numbers are in millions, and the percentages are simply growth from the year prior.

What's interesting here is the disparity in population growth between those 20 to 40 years of age and those between 40 to 49 years of age.  The decline in the 40-49 age group shows the baby boomers transitioning out of this demographic, providing a negative contribution to this demographics' size.  While the 20 -40 age group is growing at over half a percentage point, the overall 20-49 segment is growing at less than a tenth of a percentage point as a result. 

The 40-49 age group is also made up of people reaching their peak earning and spending years. Combined with the declining size of this segment and the economic climate to which the 20-40 segment is likely more susceptible, the TV viewing data is probably amplified.

Taken with the external factors discussed earlier -- a decline of 1.4% in TV viewing by the 18-49 age group, and an increase of 1.5% overall -- the demographic makeup of the population cannot be overlooked. 

For now, I am taking a cautious approach to the cord-cutting hypothesis because of the age demographics of our population and the economic climate.  I would not take this top-line data to the bank with the cord cutting argument for now.