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Getting Their Fix

Great article from The New York Times last week on the latest version of a long-running, government-funded University of Michigan study called “Monitoring the Future,” which reported that use of alcohol, drugs, and tobacco by teens has fallen to 40-year lows. The article suggests (and I strongly agree) that the rampant use of smartphones (and other screens) is a big part of the reason.

What’s going on here and what does it tell us about the future of TV? Three thoughts.

1. Smartphones Are Both Isolating And Social At The Same Time (‘Together Alone’)
Few people introduce themselves to drugs. At the beginning, it’s an inherently social experience. (Once people are hooked, of course, it’s a different story). The reason drugs have been particularly pernicious among teens is that getting high is easily linked with desires for acceptance and belonging among peers. Peer pressure is a strong motivator, and explains why parents have long been afraid of their teens ‘getting in with a bad crowd.’

Smartphones alter this dynamic by substituting online (virtual) interactions for face-to-face (physical) interactions. This is particularly true during unstructured free time (when most trouble happens). In other words, today’s kids get together physically for structured activities (e.g., sports, clubs, etc.), while unstructured free time is mainly spent online. For some activities, this obviously makes a huge difference . (It’s not completely a coincidence that teen pregnancy rates are also at historic lows.)

This has major implications for the TV industry. First, to the extent that teens are using their screen time for social networking and messaging with their peers, this may crowd out more traditional entertainment viewing. We see this in falling ratings for youth-oriented programming like The Disney Channel and MTV. We also see it in multitasking and multi-screening, where teens use traditional media strictly as background noise while they do homework and message friends in the foreground.

Second, when they do watch video, today’s teens are moving away from ‘together together’ experiences (e.g., watching an NFL game with their friends and family) and toward ‘together alone’ experiences (e.g., watching a YouTuber play a videogame). Both types of content may have millions of viewers, but they are not at all the same thing. Most traditional video content is fundamentally communitarian. It’s all about the spectacle. At a theater, the audience collectively identifies with the hero on their journey. In traditional sports, fans cheer along with their college (Go Duke!), city, state, or nation (in the case of the Olympics or World Cup). They experience victory or defeat together as a group. These experiences still exist, of course, but their cultural monopoly has been broken.

YouTube and Twitch are something else entirely. There is no distance between the subject and the audience. Most streaming is literally a screen share; largely a ‘personal’ dialogue between the provider and the viewer. A few legacy content providers are figuring out how to do this (on Snapchat and elsewhere), but most are struggling. Anyone hoping for growth going forward is going to have to figure this out.

2. Free Beats Paid
Being a teen used to be expensive. Cars cost money. Going shopping at the mall costs money (browsing may be free but never buying anything gets old fast). Video games (even at the arcade) cost money. Music (on physical media) costs money. Dating costs money. Watching a movie costs money. Traditional teen vices (smoking, drinking, drugs) all cost serious money.

Times have changed. Teen employment has declined dramatically in the last 40 years, leaving many teens without a source of disposable income. This is fine, however, because today’s teens have less interest in the above activities anyway. Malls are dying. Nobody dates anymore. More and more teens have no interest in learning how to drive. The screen has replaced everything else.

Importantly, most middle-class parents pay for their kids’ smartphone and data plan. Lower-income teens may need to manage their own money, but the amounts are not large. A prepaid Android phone at Walmart is $30. These same kids have access to tablets or PCs (as well as broadband Internet via Wi-Fi) both at home and at school. Once online, everything else is free. Over the past two decades, and to the dismay of the entertainment business, videogames, music, and video have largely shifted to free models.

Bottom line: Monetizing today’s teens is tougher than ever. That’s great news if you’re trying to keep kids off drugs, but not so great for companies trying to sell content subscriptions to this market. YouTube TV, in particular, has a hard row to hoe.

3. Games and Social Networking Apps Are Addictive
As any parent of a teen knows, a key reason smartphones have reduced drug use is that games and social networking apps are the new drug. As one researcher put it, smartphones basically function as 24-7 ‘portable dopamine pump.’ Yes, today’s apps are that good. Videogame developers, in particular, have turned feedback loops into an art that compels users to keep playing. This is obviously a double-edged sword, depending on whether one is trying to (1) keep teens off drugs (in which case videogame addiction may genuinely save lives), or (2) get them to do their homework (in which case the same phenomenon is a real pain in the arse).

The point for the content industry, however, is both clear and daunting. Convincing app-addicted teens to watch TV is incredibly difficult. Mediocre shows are doomed. Some content categories (news?) will survive only if they make their way inside the smartphone as part of the social networking feed (what we call ‘SoMo video’). In other words, if you can’t beat ‘em, join ‘em.
A few premium outlets will clearly survive (Netflix and HBO look like good bets at the moment), but their original TV shows better be awfully good if they hope to get this generation to put down their phones and pay attention.

Today’s pop culture is very cavalier with terms like ‘addict’ and ‘junkie.’ It turns out, however, that these terms carry more than a grain of truth. Games and social networking apps are becoming the drug of choice for today’s teens. The TV industry is going to have to find a way to cope.

Stick with TDG and stay ahead of the curve.

Joel Espelien is a Senior Advisor for TDG and serves as an advisor and Board Member to technology start ups. He lives near Seattle, WA.