KPBS' Amita Sharma and BottomLine Marketing co-founder and SDSU marketing lecturer Miro Copic discuss some of the week’s top business stories.
Q: Let's start with a way some people may be watching, by streaming. A big jump was reported this week. What does this say about audience habits?
A: Well, audience habits are changing drastically in the way they view content. It's shocking. This study from Nielsen really looked at streaming but looked at television viewing as a whole or kind of content viewing as a whole. Americans watch nearly 12 hours of content every single day, whether it's on their mobile devices, whether it's on TV, through games, on their air, hear it on the radio... It's amazing.
So younger consumers, those 18 to 34, basically watch over five and a half hours on a connected device, versus less than two and a half hours for those over 65 and older consumers (who) watch 50 hours of live TV. Traditional television every week versus 20 hours for younger consumers. So it's pretty intense. But what's funny in this study is that even though all this new content is being developed, people are still watching old content. So last quarter on Netflix, the most important stuff that was seen was Friends, The Office, Grey's Anatomy and NCIS.
The last piece of interesting information is that is the speed at which all this streaming is happening. People are cutting the cord at a faster rate. Today, over 70 percent of households have a cable or satellite subscription. Roku says that by 2020, for less than 50 percent will. So we'll stay tuned. This is a big space.
Q: All these habits and technology are hopping at such an accelerated rate. Let's talk a little bit about the devices that people are using that you touched on. A lot of people are watching this on their T-Mobile or Sprint smartphones. The merger was finalized this week. What does that do? What do people need to know?
A: Almost finalized. So a judge in a lawsuit brought by 13 attorneys general, led by New York -- the judge ruled that the merger can go forward.T-Mobile is going to be the new name of the brand. So Sprint is going to go with the three things that happen out of the lawsuit. First is that the company agreed not to raise prices for the next three years. A lot of consumer advocates were saying they would raise prices pretty quickly.
Secondly, they agreed to serve to reach 97% of the country within three years. And 85% of the rural areas, and within six years have 99% of the country coverage and 90% of rural areas.
So overall, it should be good for consumers. The last thing, the holdup is the California Public Utilities Commission hasn't given the approval yet on the merger. They're supposed to, sometime in the next couple of weeks, give their ruling. They'll have a 30 day comment period and then they'll have a final ruling. So if they kind of say preliminarily, "OK," it will go ahead.
Q: At the end of the day, consumers still will be paying. And we're going to pivot a little bit. So there was a new report this week on household debt. What new milestone this hits?
A: Wow. The Fed issued a report. U.S. households have hit 14 trillion, not billion... trillion dollars in debt. This debt is kind of broken down into four big buckets. The first one is home loans and mortgages and refinancings. (Then) student loan debt, auto debt and credit card debt. Now, nine and a half trillion out of the 14 trillion is in home financing. That's actually positive for consumers because we're in the lowest interest rate environment in generations. And so people actually save money in interest costs by refinancing now.
The downside, when you look at all the delinquencies, you're looking at still the lower end of the economy. Lower-income to middle-income consumers who are living paycheck to paycheck are extending credit. You know, their credit limits to make ends meet. And if there's a shock to the economy and things kind of pivot, those numbers will go up much higher. So those are ones that we're gonna be watching over the next number of months.
