Cox Communications President Pat Esser told a Media Institute lunch crowd in Washington Wednesday that the so-called Echo Boomers, ages 15-25 (73 million consumers), will soon be making the media-buying decisions and will likely drag their parents with them.
That generation, he said, loves their computers and want online entertainment. "Mobile phones and game consoles rival the importance of TV in their lives," he said. Esser cited one study that found that the Echo Boomers would choose their PC's over their TV's if they had to choose at all.
He said the prime directives for that new generation are networked devices and portability.
Esser, billed by Media Institute President Patrick Maines as a pioneer of bundling voice, video and data for cable customers, called that coming Echo Boomer boom a "seismic shift" in media consumption. Esser, who said he had just come from a board meeting of Discovery Networks crosstown, said they had been discussing how you program to that new consumer.
"Three years is not that far out," he said, "if you are in a network business, building content, many times you are one or two years out in the cycle of development and production. You have to think now in terms of an audience that will be consuming differently from linear products."
Esser said there is an economic food chain that brings content to your home. Distributors have a responsibility to programmers to keep that economic food chain in place."
Esser said Cox would meet the demands of that generational shift by offering interactivity and on-demand service, Internet, and phone. Esser said that while 10% of current U.S. households have given up their landlines, he expected 30% of Echo Boomers to do so in the next few years. He called them future VIP customers (and likely VoIP customers as well).
He called that choice, combined with customer service, a "winning formula in the turf wars ahead" for tech-savvy consumers--cable is a key opponent in those battles--with the caveat that the formula worked only so long as "the rules and regulations governing our business apply fairly to all regardless of the delivery platform."
Esser outlined his predictions for changes in media consumption in 2010 and how Cox service would adapt to it. Some of the highlights from the Cox Crystal ball: 100% of customers will have access to digital simulcast, meaning everything in analog is simulcast in digital.
Three quarters of customers will be digital TV households, of which 70% will have a digital video recorder. Already, 40% of TV time in DVR homes is spent viewing recorded programs, he said, " remember that factoid."
55% of customers will take an HDTV package of more than 50 channels.VOD will include movies released simultaneously with theatricals. He said that more than half of Cox's digital homes have access to VOD, and the entire digital sub base will have access by the end of next year, he said.
Cox will offer Prime On Demand, with broadcast and cable networks' prime time lineups available on demand withing 24 hours of their original airing.
Half of the TV viewership will be time shifted or On Demand, "rather than to linear TV as we know it today."
Phone service, or "voice products" will come in "many different flavors," he said. Not missing an opportunity to tweak the Bells, Esser said "it's no longer just Ma Bell plain old television service. It could be circuit-switched, IP-delivered, Internet messaging, wireless, you name it."
Esser said he couldn't pick a winner "in the legislative battles ahead," but he said consumers would "lose big on a tilted playing field favoring one provider over another."