NEW YORK: Companies in the telecoms, media and entertainment industries must match the changing habits of young US consumers or miss out on a $500bn opportunity, according to McKinsey.
The consultancy argued that device penetration and usage among people below 35 years of age would yield $15bn for mobile apps and ads, video-on-demand services and social network advertising in the coming three years.
More broadly, the choices made by this group when considering both appliances and content providers were pegged to impact $500bn in annual spending for mobile and landline voice calls, PCs and pay TV.
"Companies that don't win youths' attention now may be in danger of creating the next VHS of the digital age – a business that will wither as this influential cohort declines to engage with it," McKinsey said.
Based on a survey of 20,000 people, it stated that smartphone uptake had reached 63% for 13-34 year olds in 2011, versus 38% for their 35-64 year old counterparts. These totals hit 19% and 13% in turn when discussing tablets.
Similarly, 85% of respondents in the 18-34 year old demographic regularly watch online video, 86% have signed up to social networks, while 44% utilise VoIP and video chat tools.
Figures here were between 1.3 and 1.9 times higher than for older consumers, a trend that also applied to a willingness to pay for content.
As such, 20% of the younger audience already subscribed for premium video access on a PC. Another 11% had purchased newspaper subscriptions via the same route, as had 31% through a digital reader.
The differences here came in 1.6 to 2.3 times that of 35-64 year olds, a gap holding true concerning magazine subscriptions, and paid-for apps offered by print media publications on the web.
"Unlike older consumers, youths may not have existing non-digital subscriptions to magazines and newspapers, or even a landline phone or paid TV service, so they are not duplicating channels or costs by paying for digital content," McKinsey added.
Some of the favoured online properties for the young audience included Facebook, the social network, VEVO, the music platform, that for Apple, the electronics pioneer, and Viacom's digital media sites.
"The challenge for companies seeking to serve more of the youth market themselves is learning from these sites, and finding how to leverage or affiliate with them (or adopt their attributes) to generate more interest from youths," McKinsey advised.
Data sourced from McKinsey; additional content by Warc staff