Last year, digital track sales dipped 6 percent—the first ever down year*. Yet music streaming was up 32 percent last year. Not surprising. Millennials no longer buy, they rent. And because Millennials are the current trendsetters, society has seen a shift occur over the last handful of years.
Purchases and contracts are being swapped out for the non-committal freedom of renting and streaming. Jobs are fleeting. Why should Millennials be locked into a 30-year mortgage where their job may not exist in three to five years? Or with tech shifts, why buy and then have to re-buy your entertainment every couple of years because of the next medium du jour? After all, how many times have you re-purchased “Star Wars” over the last few years?! And throw in Netflix and Hulu’s impact on big cable. A flexible $10 monthly subscription that you can opt out of the second you get the new tech itch is certainly more alluring than that “Two-Year Price Lock Guarantee!” contract you can’t break with big cable without paying an early termination fee, even though your provider dropped your favorite basic cable station in the middle of your contract. It’s also why most won’t spend $5 for an app, but they’ll buy more than that through in-app purchases from those same free apps. Who wants to pay $5 for an app without knowing whether they’ll like or even continue to use it past the first five minutes? But if they’ve been using it steadily the past week and are offered additional benefits for another dollar here or dollar there? Suddenly there isn’t that same anxiety.
So of course streaming services are a hit. Monthly streaming services have earned the inherent trust of the Millennials, who want the freedom to walk away if you let them down. And because their commitment isn’t required, Millennials have put the onus on the providers to commit to service and continued improvement in order to maintain their satisfaction and therefore hold onto their business. Seems fair. When a company has earned that trust and delivers, as Netflix has proven, Millennials have rewarded them with their continued long–term loyalty.
Bruce Dierbeck is a senior account executive, social/mobile strategist and content creator at BVK in Milwaukee.