The future of entertainment is clearly online
Statistics from global audience measurement company Nielsen show that the future of entertainment is not TV. It is online. The younger you are, the less likely you are to be glued to the television in your down time. People aged 18 – 24 (the younger half of the Millennial generation) apparently spend just half as much time watching TV as 35 – 49 year olds (the younger half of Generation X).
While their older countrymen and women are watching TV, these young people are watching Amazon Video, YouTube, Netflix or Hulu. This trend will only continue, because it is a direct reflection of the incredible increases in choice and convenience that streaming video on demand (SVOD) offers over traditional TV services. There’s really no denying it: you can watch whatever you want, whenever you want; and, while you can watch it through the big screen in the front room (thanks to devices like Google’s Chromecast), you can also watch it on your computer, tablet, or mobile phone.
SVOD services are cheaper, too, and the fact that young people are opting for them over traditional TV is already hurting satellite-TV and telecom companies.
SVOD companies like Amazon and Netflix already have more customers, combined, than paid TV services do. And they’re becoming more and more aggressive in their courting of audiences. Both of these companies are spending big bucks on the production of original content. If, for example, you want to watch hit U.S. show Preacher, you will need an Amazon Video account. And if you want to watch Marvel’s Jessica Jones, you’ll need to be a Netflix subscriber. Amazon even won an Oscar this year for its film Manchester by the Sea!
SVOD services’ overtaking of paid TV is a classic example of how Ecommerce is disrupting existing business models and lifestyle choices. And it is not clear – in this particular case, or generally – how traditional models can fight back. As companies like Amazon and Google continue to improve their offerings, and more and more people who grew up in an online world enter the market, it is inevitable that TV’s years at the pinnacle of entertainment mountain are behind us.
Dominion holds a number of companies involved in the SVO trend, like Amazon and Google, in its Global Trends Ecommerce Fund.
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