The entertainment industry is at a turning point. While traditional subscription-based streaming services (SVODs) remain popular, younger audiences—Gen Zs and millennials—are shifting towards free, ad-supported content and social media platforms for their entertainment. According to Deloitte’s 19th Annual Digital Media Trends Survey, rising subscription costs, personalized content on social platforms, and the influence of digital creators are driving a new era of media consumption.

Findings from Deloitte’s Digital Media Trends Report

1. Rising Costs Are Driving Consumers Away from SVOD Services

• 47% of consumers believe they pay too much for streaming services.

• 41% say the content isn’t worth the price, a 5% increase from 2024.

• A $5 price hike could cause 60% of consumers to cancel their favorite streaming service.

• The average SVOD subscriber now pays $69 per month for four services, up 13% year-over-year.

What This Means

Streaming services are facing the same affordability issues that once plagued cable TV. Consumers, especially younger generations, are seeking lower-cost or free alternatives, making it harder for premium services to justify price hikes.

2. Free Ad-Supported TV (FAST) Gains Popularity

• Two-thirds of Gen Zs and millennials subscribe to free ad-supported streaming (FAST) services.

• 54% of SVOD subscribers now have at least one ad-supported tier, an 8% increase from 2024.

• Gen Xs and Boomers are also adopting ad-supported models, with 58% choosing these options.

What This Means

Ad-supported streaming is becoming a dominant alternative as consumers look for ways to reduce costs while maintaining access to content. Streaming providers need to balance pricing, content value, and ad experience to retain subscribers.

3. Social Media Overtakes Traditional TV in Relevance

• 56% of Gen Zs and 43% of millennials find social media content more relevant than TV shows or movies.

• 50% of younger audiences feel more connected to social media creators than TV personalities or actors.

• Gen Zs spend 54% more time on social platforms than the average consumer.

What This Means

Younger viewers gravitate toward short-form, algorithm-driven, and interactive content. Traditional TV and streaming services must integrate social-style engagement and personalization to stay relevant.

4. Social Media Drives Purchasing Decisions More Than Streaming Ads

• 63% of Gen Zs and 49% of millennials say social media ads and product reviews influence their purchases.

• In contrast, streaming video ads influence only 28% of Gen Zs and 25% of millennials.

• AI-powered algorithms help social platforms serve hyper-personalized content, making their advertising more effective.

What This Means

For brands and advertisers, social media is now a more effective marketing channel than traditional streaming platforms. Streaming services must enhance personalization and engagement to compete for ad revenue.

5. The “Churn and Return” Cycle Persists

• 39% of consumers have canceled at least one paid streaming service in the last six months.

• Over 50% of Gen Zs and millennials frequently cancel and switch services.

• 24% of consumers re-subscribed to a service they previously canceled within the last six months.

What This Means

Subscription fatigue is forcing streaming services to rethink customer retention strategies. Offering flexible pricing, exclusive content, and bundled services could help reduce churn.

6. AI and Personalization Are the Future of Entertainment

• AI-powered recommendations make social media content feel more personalized and engaging.

• Streaming services struggle to replicate this level of personalization at scale.

• Younger viewers demand tailored content experiences, favoring platforms that deliver highly relevant content efficiently.

What This Means

To compete with social media’s algorithm-driven engagement, streaming services must leverage AI to improve content discovery and ad targeting. Failure to do so risks losing younger audiences permanently.

Deloitte’s report highlights a fundamental shift in media consumption—from paid streaming to free, social-driven entertainment. Younger audiences prioritize affordability, relevance, and interactivity, challenging traditional streaming models.

To stay competitive, entertainment providers must:
Embrace ad-supported models to offer lower-cost or free options.
Enhance AI-driven content personalization to keep viewers engaged.
Integrate social media strategies and influencer partnerships.
Rethink pricing structures to prevent high churn rates.

The future of entertainment belongs to platforms that adapt to consumer preferences—and that means leveraging AI, social engagement, and value-driven content strategies.