Anatomy Media Inc. NY has published an invaluable report based on the findings of its Millennials at the Gate survey based on a Google consumer survey conducted amongst 2700 millennials aged between 18 and 24, through a sample representative of the US population in that age range.
The findings of the survey, carried out from June 29 to July 5, 2016, stand out for Anatomy’s insights to content owners about millennial behaviour with TV and Movies content, and makes excellent suggestions, many easily implementable, to help content owners and publishers monetize their investments much better.
A must-download, even print-and-keep publication, the report is available here.
We are presenting a far more detailed report that just an executive summary, because this is one report that OTT Platforms, publishers and marketers battling Ad blockers, and most importantly, owners of TV and Movie content bleeding potential revenues to piracy, cannot do better than study this report in detail. Hopefully, this exhaustive piece will take them to the download link here.
Streaming is priority; Linear is secondary
The purpose of the study was to examine the viewing behavior of young illennials (aged 18-24) in non-linear environments, considering the precipitous decline in millennial viewership of linear television.
A 2016 study by Horowitz Research said millennials (aged 18-34) reported 54% of their TV viewing time was spent streaming and just 25% view live. Streaming is the priority. Linear is secondary.
Other studies have explored what platforms and programs are popular. Millennials stream, but how? Do they pay for what they stream with their data, dollars, or demographics?
This study critically examined three key streaming behaviors, and the key findings therein are:
- Ad blockers: The first is now a constant challenge to the digital marketer: 2 out of 3 young millennials use an ad blocker on a desktop or mobile device.
- Piracy: The second area is perhaps the oldest and most serious challenge to the content producer, and pertains to piracy. The finding? As many as 69% of young millennials use at least one method of piracy – download, stream or mobile.
- Shared Passwords: The third key finding: 3 out of 5 young millennials who stream content use a shared password or cable log-in.
Ad blocking a social norm amongst young millennials
At its simplest level, an ad blocker is a tool that allows people to enjoy the internet without advertising. Functionally, ad blocker software installs a proxy server onto a user’s computer, and from that point on, all data is routed from the user’s browser to the proxy server before it is passed along to the user.
The proxy server inspects everything and evaluates if it is advertising or not. If something is deemed to be advertising, it is stripped out.
The 2015 Ad Blocking Report indicated that ad blocking had 15% penetration in the U.S. This is just the tip of the iceberg.
Two out of three young millennials use it on a desktop or mobile device.
People do not adopt regressive technology (in this case, viewing ad-supported television on a television set) as they age. Instead, these young millennials are early tech adopters and evangelists. Behaviors that originate with them migrate downstream to their younger siblings and friends, and upstream to their parents and beyond.
On the internet, if content is king and distribution is queen, then USER EXPERIENCE, it would seem, IS GOD.
Millennials use ad blockers to assert control over their user experience, reduce their data usage, and get access to their desired content faster.
Video ad avoidance is a key driver
Ad blocking is a significant impediment for digital publishers. For the last several years, ad blocking has been discussed as a threat primarily related to written content (e.g., newspapers and magazines).However, it is notable that it is actually video ad avoidance that is driving the adoption of ad blocking.64% of young millennials who employ ad blocking software do so in order to avoid video advertising. Young millennials report that the number one reason they use an ad blocker is to escape pre-roll ads on short-form content such as YouTube videos.
They also want to avoid long-form content like ads in a TV series.
How can publishers deal with young millennials’ ad avoidance?
One strategy is to employ an ad block wall. An ad block wall is a website feature that detects ad blocker software and prevents a user from viewing a site’s content until the ad block software is disabled.
Anatomy conducted an audit to assess, on average, how many TV networks take advantage of the ad block wall technology. The results? Close to none.
Of the 17 networks Anatomy audited, only one (CBS) employed an ad block wall. The other 16 networks are missing out on revenue from the two-thirds of young millennials who visit their site, but use an ad blocker.
Anatomy also tested local affiliate networks. While none of the affiliates (including CBS) employed an ad block wall, ABC affiliates (KABC and WABC) attach pre-roll ads directly to video. Interestingly, because the affiliates do not appear to use dynamic automated ad insertion, but rather directly attach the pre-roll advertisements to their content, the ad block technology is unable to identify the advertisement as an advertisement and does not remove it from the user’s experience.
Anatomy also tested several piracy streaming sites. Notably, both LiveNewsBox and HulkUSC, two sites that pirate streams of live news networks, had ad block walls in place — thereby obtaining ad revenue that the network, whose content they lift, does not.
It is vital that video publishers begin to employ anti- ad block strategies.
PIRACY: Video piracy is pervasive among young millennials, Anatomy says. 69% of young millennials use at least one form of video piracy.
The manner in which users are securing content illegally is changing. Torrenting video files (i.e., downloading unlicensed content) is no longer the dominant form of video piracy among millennials. Today, streaming portals and mobile apps that host unlicensed content are the most popular methods of piracy.
The prevelant forms of piracy, says Anatomy, are three:
- Past: Torrent – Napster-era piracy in which users download unlicensed files directly to a computer.
- Present: Streaming – Present-day piracy in which users access unlicensed content via free streaming websites.
- Future: Mobile – Emergent piracy in which users access unlicensed content via mobile apps.
A whopping 60% of young millennials streaming content without paying for it
Anatomy says, “These streaming millennial criminals, or what we call “striminals,” watch what they want, when they want, where they want, and they don’t pay for it.”
The most common sources of pirating TV, Movie content
What are the three most common sources of pirating TV or movies? 42% of the millennials surveyed said they are into Desktop Streaming, 41% use Mobile Apps, and 17% are torrenting, reports the Anatomy survey.
Anatomy also sought to gauge young millennials’ attitudes toward content theft. Do they believe content piracy is wrong? Do their attitudes differentiate between forms of piracy? Do they mistakenly believe piracy is legal?
- 18% believe it is wrong to stream content without paying.
- 43% believe downloading piracy is llegal, but streaming piracy is not.
- 33% believe downloading and streaming piracy are illegal.
- 24% believe downloading and streaming piracy are legal, and
- 37% believe it is wrong to download content without paying.
67% of young millennials mistakenly believe at least one form of piracy is legal
What abets piracy? Great user experience and IPR owners’ laxity says Anatomy
Anatomy suspects that the millennials’ perceptions are in part a function of their user experience. Illegal streaming and downloading sites have evolved. They now look like legitimate services and are particularly deceptive for users. They are professionally produced, well designed websites with network logos and content prominently displayed. There is nothing to distinguish a pirate site from a legitimate content aggregator or to signal to the user that they are participating in something illegal.
What should content owners do?
Anatomy advises that in addition to taking legal action against these sites for content piracy, legitimate producers of content should aggressively go after the pirate sites for the unauthorized use of brand marks and trademarked images. Swiftly removing the visual trappings of legitimacy is an easy first step to disrupt and degrade the business models of illegitimate sites.
Which led Anatomy to the next logical question in their survey: How do young millennials choose where to watch content? Anatomy asked its respondents to identify the most compelling reasons for choosing a streaming platform.
Content accessibility was the most popularly cited reason (31%), followed by low buffering (30%) and a lower number of ads (28%).
Sharing streaming passwords
3 out of 5 young millennials who stream content use a shared password or cable log-in.
Anatomy has shared an interesting piece of information: In a 2016 ruling in the case of the United States v. Nosal, the US Ninth Circuit Court of Appeals upheld the conviction of the defendant for violating the Computer Fraud and Abuse Act (CFAA) when he used a former coworker’s password to access confidential and proprietary information in his former employer’s system.
Anatomy reports that the dissenting judge on the three-judge panel pointed out in his opinion that the ruling criminalizes all password sharing and turns millions of people into criminals.
Despite this court ruling, but much like the dissenting justice, only 18% of millennials believe it is wrong to share passwords, says Anatomy. Regardless of the law or the various terms of service that limit password usage, sharing streaming passwords with friends and family is a common behavior exhibited by young millennials.
Sixty-one percent of young millennials who stream content use a shared password to access it. Most sharing occurs within families (58%), but 42% of millennials share passwords with friends.
Most streaming platforms’ terms of service outline who can stream (e.g., subscribers in good standing) and how many devices can simultaneously stream content. They also typically reserve the right to change this policy from time to time at their discretion.
Streaming services tested:
Anatomy ran a test of various streaming services and found that concurrent-streaming policies were generally enforced, but that the valid-subscriber piece of the equation was not monitored or enforced. The revenue implications of pervasive password sharing, says Anatomy, are clear.
61% of the surveyed millennials share passwords, and 39% do not.
Of those who share passwords, 58% do so with their parents, even after they move out of their parents’ homes, and 42% share the passwords with friends.
Is ad blocking driven by piracy?
Anatomy finds that all of these payment avoidant behaviors — ad blocking and the various forms of piracy — are mutually reinforcing.
Anatomy insight: We began our study with the hypothesis that ad-blocking may, in part, be driven by piracy.
- We hypothesized that the invasive pop-up ads frequently present on piracy sites serve as a motivator for ad block adoption.
- While it did not establish causality, our data analysis proved that there is indeed a statistically significant correlation between ad blocking and piracy. According to our analysis, there is a one in a million chance that the relationship between ad blocking and piracy is due to chance.
- There is a statistically significant correlation between the method employed by a young millennial to block ads and the manner in which they stream unlicensed content.
- Young millennials who use a desktop ad-blockers are most likely to stream unlicensed content, while millennials who use a mobile ad blocker are most likely to use a mobile app to do the same.
- Unsurprisingly, those young millennials who use both types of ad blockers are most likely to engage in both types of piracy.
- Further, young millennials who do not use an ad blocker are not likely to pirate any content.
What can platforms and content owners do with this data?
Over the last two decades, networks have developed on-air strategies to retain and build live viewership including seamless break architecture, squeezing credits and other tactics to boost C3 and C7 ratings.
Millennials will accept advertising as long as it is restrained, targeted and relevant…
Everything that the user experiences influences their perception of the brand, and the very best, most wonderfully curated content can be ruined by repetitive, irrelevant advertising.
Now video publishers must monitor streaming viewership and structure the viewer experience with the same diligence.
- The entertainment consumption model is no longer one of central control and content push, but rather decentralized open access and pull.
- Publishers are not only competing with each other, but with everything that it is possible for an individual to do in their free time.
- The definition of a premium user experience is always changing, and publishers must be vigilant in order to maintain their standing.
- Young millennials’ dissatisfaction with their viewer experience and their overwhelming adoption of ad blockers is a call-to-action to improve the viewer experience and review the nature of the digital ad experience.
- Millennials will accept advertising as long as it is restrained, targeted and relevant.
- Publishers need viewers to disable ad blockers by leveraging an ad block wall. However, hand in glove with this, ad-supported publishers must work to improve digital commercial advertising break architecture.
- Everything that the user experiences influences their perception of the brand, and the very best, most wonderfully curated content can be ruined by repetitive, irrelevant advertising.
- With binge viewing being so prevalent—and so desirable, from the content provider’s perspective—publishers must develop strategies to make a viewer’s experience pleasant enough to stick around for three- plus episodes.
- Additionally, best practices for tackling the changing environment should be shared within organizations.
CBS affiliates, for example, should benefit from CBS strategy for beating ad blocking. Organizational inefficiencies and lack of knowledge-sharing within an organization creates unnecessary duplication of effort and allows for pockets of needless revenue loss.
All text, images and findings from the Anatomy Media Inc NY survey findings, available here