Kids These Days: They Might Just Pay for Digital Content

[Commentary] Our survey found that, contrary to conventional wisdom, younger customers are more willing to pay for content, possibly because they are more comfortable with mobile payments. Among customers younger than 26 in developed markets, 30 percent are already paying for some forms of digital video (compared to only 23 percent of those 26 and older); 34 percent pay for digital music (compared to only 18 percent of older peers); and 40 percent paid for games (compared to 28 percent of older customers). So how can media companies monetize this powerful trend? They must move beyond traditional advertising strategies or the landgrabs pursued by YouTube, Netflix and others that aim to build enormous user bases.

Long-term success depends first on understanding Generation #hashtag and its media preferences and then upgrading capabilities in three areas: 1) Rethink content strategy 2) Embrace the new rules of advertising 3) Capture and make good use of consumer data. Just as traditional media companies need to embrace native models, native upstarts may also have to learn some of the old dogs' best tricks.

[David Sanderson is a Bain partner in Los Angeles, where he leads the firm's Global Media practice.Laurent Colombani is a partner with Bain & Company in Paris]