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

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 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.

Marketing Technology News: MarTech Interview with Patrick Danial, CTO and Co-Founder @ Terakeet

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.

Marketing Technology News: Leveraging Martech to Define, Analyze, and Strategically Act on your Total Addressable Market (TAM)

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.