While many of today's media and entertainment headlines center around the consumption behaviors of Millennials, it's the generation after them that's actually changing how M&E companies do business.
That's according to research from London-based EY, which found that Generation Z (those born since the mid-1990s, and the first digitally native generation) is consuming media in a way that's forcing media companies to make new investments in the areas of digital ads, electronic games and IP-delivered broadcasting.
Understanding the post-Millennial consumer can prove challenging, but thanks to data analytics and sensor technologies, we now have more insight into customers than at any time in history, John Nendick, global media and entertainment head for EY, said in a statement. Media and entertainment companies struggling to understand their customers need to see this as a call to action, and to translate this information into viable products, services and business models.
The industry as a whole is quickly shifting from B2B to B2C models, which makes understanding customers more paramount to success than ever before.
By 2020, E&Y sees Gen Z representing 24% of the U.S. workforce and 40% of the consumer market. More than 90% of today's teens have access to a smartphone, 60% use a tablet, and a full 90% watch YouTube on a daily basis. And unlike the lean-back content consumption attitudes of the generations before them, Gen Z demands interactivity, and has a desire to be involved with the creation of the content being distributed, EY found.
Major media, tech and telecommunications companies have responded, making major investments in young, digital-first companies, including those centered around multichannel video distribution and voice and data connectivity. As examples, EY pointed to Disney's multiple rounds of investment funding in youth-centric Vice Media, and NBCUniversal's stakes in BuzzFeed and Vox.
And in a way, EY found, the members of Gen Z may be the easiest generation ever to cater to: they surrender personal data far more easily than Millennials or members of Gen X (those born between the early 1960s and early 1980s). That allows M&E companies to better target content and advertising, and offer up more tailored content experiences, the report found.
An area that M&E companies can also capitalize on: the convergence of digital-first Gen Z and Internet of Things (IoT) technology. More than 30 billion internet-enabled devices will be in the market by 2020, according to EY, and the potential data available from them will give M&E companies unprecedented insight to understand and address consumer preferences, the report reads.
IoT provides an unsurpassed ability to anticipate the needs of Generation Z and to deliver rich content experiences across devices that create more intimate customer engagement.
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While many of today's media and entertainment headlines center around the consumption behaviors of Millennials, it's the generation after them that's actually changing how M&E companies do business.
