Demographics Are Destiny: Streaming’s Growth Playbook
Love them or hate them (and as a cranky Millennial, I lean towards the latter), George Lucas did something very smart with the Star Wars prequels: he made them appealing to kids. Centering 1999’s The Phantom Menace around a child protagonist may not have resulted in the best movie, but it did help make Star Wars, a 22 year old property at that point, accessible to children. The same applies to animated series such as The Clone Wars and Rebels. Lucas understood that the core Star Wars audience was aging and made a conscious effort to expand the fan demographic. This decision helped heap billions into Star Wars’ commercial value.
Zooming out, we can tailor that same thinking to the platform level for major streaming services. When looking at the most prominent age demographic of audiences in the US last quarter by service, we can identify which groups are driving the most revenue. According to Parrot Analytics, Apple TV+ (Gen X+ - 34.1%) and Disney+ (Gen Z - 32.6%) are the only premium SVOD services that did not count Millennials as the largest audience cohort in Q3.
At first glance, this makes a certain amount of sense. Millennials are the first generation with digital media and would naturally comprise the largest streaming audience. But digging deeper, we can identify strategic whitespace opportunities as well as double down efforts.
Take Amazon Prime Video, for example. As an original content provider, Amazon has made it clear that adult animation(Invincible, The Legend of Vox Machina, Hazbin Hotel) is integral to its brand. That fits as nearly 60% of its audience is at least 32, per Parrot. Older demographics tend to have more disposable income, which is ideal for a retail giant that wants you to buy things on its platform.
Apple TV+ is even more pronounced as Gen X+ is its biggest audience cohort and 67.5% of its audience is at least 32. Again, this makes sense as its tech products are expensive. But Apple TV+ is also transitioning to a services-oriented business. The company wants its Apple One bundle and premium services to become more of a lifestyle brand. To do that, it needs to reach younger consumers to A) start creating habitual behavior patterns within the next generation to have disposable income and B) engage younger consumers who are always culture’s tastemakers. Hence, why Apple TV+ scooped up Charlie Brown early on.
This works the other way as well. Disney+ is by far the youngest-skewing major streaming service in the market. Yet its integration of Hulu programming was not only to create a more seamless streaming experience for customers, but to also broaden out the platform’s appeal to older demos. Hulu’s general entertainment programming and next-day access to linear content is a strong attraction point for slightly older viewers. As a four-quadrant service, Disney+ can negotiate better ad rates, boast more pricing power, and put forth a healthier business.
The key to sustained success is to understand the preferences and behaviors of your core audience demographic in order to keep them on the hook. At the same time, knowing who else needs to be attracted to your platform, and how to go about doing so, is crucial for long-term viability. Again, regardless of what you think about Star Wars, it’s still a commercially successful franchise today. After nearly 50 years, a galaxy far, far away continues to find ways to reinvent itself for new generations.
