A Competition for Consumer Attention: Are Social Platforms Overtaking Traditional Studios in Entertainment and Advertising?
Deloitte's 19(th) annual "Digital Media Trends" survey reveals that media and entertainment companies are at a tipping point: Innovate to deliver more value or risk losing the next generation of viewers
NEW YORK, March 25, 2025 /PRNewswire/ --
Key takeaways
-- Consumers are increasingly dissatisfied with the value of paid streaming
services. Even though 53% of consumers surveyed say that streaming video
on demand (SVOD) services are the paid media and entertainment services
they use most frequently, almost half (47%) say they pay too much for
the streaming services they use, and 41% believe the content available
on these services isn't worth the price (up 5 percentage points from
2024). A price hike of $5 would be likely to make the majority (60%) of
consumers cancel their favorite service.
-- Value-driven entertainment is surging, especially with younger
generations. More than two-thirds of Gen Zs and millennials now
subscribe to free ad-supported TV (FAST) services. Meanwhile, more than
half of SVOD subscribers (54%) say that at least one of the services
they pay for is ad-supported, an increase of 8 percentage points since
2024.
-- Content on social platforms holds greater relevance for Gen Zs and
millennials. 56% of Gen Zs and 43% of millennials surveyed find social
media content more relevant than traditional TV shows and movies, and
roughly half feel a stronger personal connection to social media
creators than to TV personalities or actors.
-- Social platforms have the power to sway purchasing decisions. Gen Zs
(63%) and millennials (49%) say ads or product reviews on social media
are most influential to their purchasing decisions. This contrasts with
the influence of streaming video ads, which influence only 28% of Gen Zs
and 25% of millennials.
Why this matters
According to Deloitte's 19(th) annual "Digital Media Trends" survey, the media and entertainment (M&E) industry is at a crossroads. Gen Zs and millennials are increasingly turning to social platforms for entertainment, drawn by data-driven personalized recommendations and a myriad of free, ad-supported content. Meanwhile, the percentage of paid TV (like cable or satellite) or live-streaming TV subscriptions in the home remains relatively flat. This shift presents a challenge to traditional studios and streaming services, asking them to rethink their strategies to deliver both compelling content and value in a rapidly evolving landscape.
In addition, Deloitte's new Digital Media Monitor launched today alongside the report. Updated regularly, it's meant to provide a longitudinal view of U.S. consumers' engagement and spending on M&E products, services, and subscriptions to further explore this dynamic on an ongoing basis.
Consumers weigh rising costs and value-priced alternatives
With subscription prices rising on average to $16 per month for ad-free SVOD services, consumers appear to be feeling a pinch, and younger generations surveyed are especially prone to canceling services or choosing less expensive, or even free, ad-supported alternatives. While streaming services initially disrupted the cable model, they are now facing similar pressures as prices climb and perceived value diminishes, particularly among younger viewers.
-- Media and entertainment costs are rising. Cable or satellite TV
subscribers surveyed report spending $125 per month on average for that
service, while the average SVOD subscriber has four paid streaming
services totaling $69 per month--a 13% year-over-year increase overall
and a 20% increase among Gen Z and millennial consumers.
-- Premium streaming services may struggle to find an ideal price point
with little flexibility to raise prices without further alienating
customers. On average, consumers consider $14 per month to be "just the
right price" for their favorite ad-free streaming services, while the
current market average is $16. Prices above $25 per month are seen as
too high. For a favorite ad-supported service, the ideal price for
respondents is around $10, with $9 being the current market average, and
anything above $19 is considered too expensive.
-- Despite streaming providers' efforts to minimize churn, 39% of consumers
have canceled at least one paid SVOD service in the last six months, a
rate that has remained relatively stable in recent years. This figure
jumps to over 50% for Gen Zs and millennials surveyed. Additionally, the
phenomenon of "churn and return"--where consumers cancel and then renew
the same subscription within the last six months--also remains
consistent, with 24% of all consumers doing so in the past six months.
This number rises to 40% for Gen Z and 35% for millennial respondents.
-- Financial concerns may be playing a role as ad-supported tiers continue
to gain traction. 54% of SVOD subscribers surveyed have at least one
ad-supported tier of a paid service, up from 46% last year. This rises
to 58% among both Gen Xs and Boomers.
Key quote
"The data is clear: Entertainment providers should embrace innovation and agility to help them thrive. This means understanding the nuances of younger audiences, leveraging technology to personalize content and advertising, and exploring new avenues for distribution and monetization. The status quo is likely no longer an option."
-- Doug Van Dyke, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader
Personalized content drives Gen Zs and millennials to social platforms
Powered by AI, social media platforms now deliver highly personalized content and ads tailored to individual interests. Traditional and streaming media may face challenges in replicating this experience and should look to more effectively leverage data to align with users' preferences to make their content more relevant and impactful.
-- Gen Zs surveyed spend 54% more time--or about 50 minutes more per
day--than the average consumer on social platforms or watching
user-generated content, and 26% less time--or about 44 minutes less per
day--than the average consumer watching TV and movies.
-- Younger generations (56% of Gen Zs and 43% of millennials) find social
media content to be more relevant than traditional content like TV shows
and movies.
-- While 43% of younger viewers (Gen Zs and millennials) surveyed say they
are willing to pay more for streaming video subscriptions with live
sports, they also seek alternative ways to access this content. A third
of Gen Zs don't subscribe to these services to access live sports
because they instead watch sports clips and highlights on social media.
Creators in control: Driving engagement and shaping viewing habits
Social media creators continue to be powerful influencers, forging authentic connections with their audiences and shaping purchasing decisions.
-- Around half of Gen Zs (52%) and millennials (45%) surveyed feel a
stronger personal connection to social media creators than TV
personalities or actors.
-- While 29% of consumers overall (and 49% of Gen Zs and 40% of
millennials) would be more willing to watch TV shows or movies starring
their favorite online creators, a significant concern about authenticity
exists. Another 30% of consumers believe creators lose their
authenticity when featured on traditional TV.
-- Creators provide powerful word of mouth: 56% of younger generations
surveyed watch TV shows or movies on SVOD after hearing about them from
creators online, and 53% say they get better recommendations on what to
watch from social media.
Key quote
"AI is revolutionizing the future of entertainment, unlocking unprecedented possibilities. It can empower media and entertainment companies to better understand audience preferences at the next level, delivering hyper-personalized content and experiences that help foster deep engagement. As traditional advertising models are re-imagined, TV and streaming services may struggle to retain ad dollars. Those who harness the capabilities of AI can define the next generation of entertainment, and those who don't may be at risk of losing an entire generation of viewers."
-- China Widener, vice chair, Deloitte LLP and U.S. technology, media and telecom leader
The 19(th) edition of Deloitte's "Digital Media Trends" report is based on a survey of 3,595 consumers, age 14 and older, fielded by an independent research firm in October 2024.
For additional details, please visit Deloitte's Digital Media Monitor, which provides a further resource to better understand consumers' shifting M&E interests, attitudes, and identities.
Connect with us on LinkedIn: China Widener, Doug Van Dyke; #digitalmedia, #tmttrends.
About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500(®) and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an impact that matters for our people, clients, and communities. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they build their future. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing 180 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 460,000 people worldwide connect for impact at www.deloitte.com.
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