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Chris Albrecht: Pay-TV Packages Must Be Revamped for Younger Consumers

This column is part of Variety’s Broken Hollywood feature. For more execs and their opinions on the state of Hollywood, click here.

There’s a demographic shift that has been occurring in the U.S. Millennials are now the largest segment of the population, Hispanics are the fastest-growing, and those two groups form the nexus of the next consumer generation. They tend to have less disposable income, but they are very tech savvy. There’s low-priced connected on-demand equipment that is attractive to them.

We have a lot of debate about whether people are going to be “cord-nevers.” The way I look at it is everyone is going to have some kind of high-speed connection, whether it’s tethered broadband or high-speed mobile. I think the question is will they be “traditional video bundle-nevers.”

The challenge is to start to address that as partners with the distributors so that we can innovate within the current structure. It’s going to take a willingness for everybody to sit down and work together so that the golden goose can continue to provide for all of us.

The issue is how do we get these emerging households —
the next consumer generation — into our tent of being their supplier of digital video content. How can we work with large MVPDs to do this; it’s really their challenge. Without trying to upset the entire apple cart, we need to find ways to intelligently transition and adapt our business strategies to be able to invite this next generation of consumers into wanting our products. We need to find attractive packages that make them want to sign up. I don’t want to see the business abdicated to someone who is out-innovating us.

While many people want the big video stack, the next generation is looking for something else. They’re starting to feel entitled to having what they want, when they want and where they want it. That’s not the way our business is structured now. We need to adapt to that.

The big media companies have got to keep that video bundle together. Whether you’re Fox or Time Warner or Disney or NBCUniversal or Viacom, you’re making a ton of money off the status quo. But that status quo is not going to enlist the next generation of consumers.

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