We’ve reached a point where the streaming model alone can no longer carry the weight of the entertainment industry. Deloitte’s 19th Annual Digital Media Trends report isn’t just a snapshot of where consumers are. It’s a roadmap showing where the audience is going. Gen Z and millennials are reshaping entertainment consumption around three pillars: creator-led content, algorithmic personalization, and value-based decisions. Traditional studios and streamers that fail to adapt face a future of dwindling influence, rising churn, and shrinking margins.
The Audience Has Moved: Social Platforms Now Command the Majority of Attention
Social platforms are no longer just supplemental. They are the primary entertainment destination for younger consumers.
Gen Z now spends 54% more time on social platforms than the average consumer, which translates to roughly 50 more minutes per day. At the same time, they spend 26% less time, or about 44 minutes fewer each day, watching TV and movies. A majority of younger users are also shifting their perception of what “relevant” content means. 56% of Gen Z and 43% of millennials say that social media content is more relevant to them than traditional TV or movies. Roughly half of both groups report feeling a stronger personal connection to social media creators than to TV personalities or actors.
This isn’t just about time spent. It’s about emotional resonance and trust. Audiences feel closer to creators, are more receptive to their opinions, and are more likely to act on their content. The balance of cultural influence is shifting away from Hollywood and toward creator ecosystems.
The Value Crisis: SVOD Hits a Wall
Even though 53% of consumers say SVOD services are the paid entertainment platforms they use most frequently, frustration with pricing and perceived value is building.
Nearly half of consumers, or 47%, feel they pay too much for the services they use. Meanwhile, 41% say that the content offered isn’t worth the price, an increase of five percentage points from 2024. On average, households now spend $69 per month on four paid streaming services, which represents a 13% increase from last year. Among Gen Z and millennial consumers, the increase is even steeper at 20%.
Consumers say the ideal price for an ad-free streaming service is $14 per month. But with the current market average sitting at $16, and top services charging more, the perception of fair value is eroding. Services may be nearing a breaking point. According to the data, a price hike of just $5 would cause 60% of consumers to cancel their favorite service.
This growing value gap, combined with economic pressure and growing subscription fatigue, is destabilizing the SVOD business model.
FAST and Ad-Supported Models Gain Traction
In response to pricing pressure, consumers are turning to more affordable or free streaming alternatives. Free ad-supported television (FAST) services are especially popular among younger audiences. More than two-thirds of Gen Z and millennial consumers now subscribe to at least one FAST service.
Meanwhile, ad-supported tiers are gaining ground within the paid SVOD landscape. Over half of SVOD subscribers, 54%, now say that at least one of the services they pay for includes advertising. That number has jumped eight percentage points since 2024 and rises to 58% among Gen X and Boomers.
Consumers are clearly trading ads for affordability. Survey respondents say $10 per month is the ideal price for an ad-supported tier, with the current market average at $9. But there’s a catch. Ad fatigue is rising. Many consumers are frustrated with the repetitive nature of ads, which could threaten long-term retention even in the more affordable tiers.
Algorithmic Discovery: Why AI Gives Social Platforms the Edge
One of the most significant competitive advantages social platforms hold over streaming services is the sophistication of their algorithmic discovery and personalization engines.
Among younger generations, 53% say they get better content recommendations from social media than from their streaming services. Platforms like TikTok, YouTube, and Instagram use advanced AI to deliver hyper-personalized content and advertisements, tuned in real time to user preferences. This creates a feedback loop that maximizes engagement and retention, something that traditional recommendation engines in SVOD have yet to match.
The same edge applies to advertising. These platforms use AI to deliver highly targeted, trackable ads, making them more efficient and more attractive to brands. The result is a model where both user satisfaction and ad performance are optimized at scale.
Redefining “Celebrity” and the Power of Creators
The cultural meaning of “celebrity” is undergoing a generational reset. Traditional actors and TV personalities are being displaced in influence by social media creators who offer relatability and authenticity.
According to the survey, 52% of Gen Z and 45% of millennials feel a stronger personal connection to online creators than to traditional celebrities. Nearly a third of all consumers, 29%, say they would be more willing to watch a movie or TV show if it starred their favorite creator. However, this enthusiasm comes with limits. 30% of consumers believe that creators lose their authenticity when featured in traditional media formats.
Creators are also essential to driving content discovery. 56% of Gen Z and millennial respondents say they’ve watched a movie or TV show on a streaming service after hearing about it from a creator, and 53% say they get better recommendations from social media than from streamers.
In this environment, creators aren’t simply influencers. They are central players in the content and commerce ecosystem, shaping what people watch, buy, and talk about.
Pay TV: Still Profitable, Rapidly Shrinking
Cable and satellite TV still account for a meaningful share of media spending, but their audience base is rapidly aging and shrinking.
Currently, 49% of consumers still subscribe to cable or satellite TV, a steep decline from 63% three years ago. Subscribers report paying an average of $125 per month for these services, compared to $69 per month for SVOD. The primary reasons consumers retain their cable subscriptions are live news, cited by 43%, and live sports at 41%.
However, younger subscribers are less likely to stick around. 23% of Gen Z and 18% of millennials with cable say they intend to cancel within the next 12 months. Live-streaming TV services, which cost about 35% less than cable, have stagnated in growth at around 40% of households.
Even live sports, long considered pay TV’s last great moat, is seeing erosion. A third of Gen Z respondents say they don’t subscribe to SVOD services for sports because they watch highlights and clips on social platforms instead.
What Studios Need to Do Now
With traditional models under pressure and younger audiences increasingly untethered from legacy platforms, studios face a clear decision: adapt or decline. Here’s where to start:
Invest in Ad Tech and AI: Studios must build dynamic recommendation engines and real-time, data-driven advertising tools. Competing with social platforms requires personalization and performance at scale.
Prioritize Bundling and Reaggregation: Studios must offer consolidated service packages that create more value and reduce subscription fatigue. Aggregation can help retain users and maximize monetization.
Elevate Creators as Core Partners: Studios must co-create content with creators and invest in projects that originate within creator ecosystems. Authenticity should be preserved, not polished away.
Reorient Marketing Around Social: Studios must design campaigns that start with creators and live on social platforms. Awareness and discovery now happen in algorithmic feeds, not traditional ad buys.
Reset the Cost Structure: Studios must adopt virtual production, AI-assisted dubbing and localization, and operational automation. The current model—high costs and long timelines—is not scalable for today’s economics.
Final Thought
The gravitational center of media has moved, and it’s not coming back. For Gen Z and millennials, entertainment lives in algorithmically personalized feeds, curated by creators they trust, and subsidized by ad models that make sense. The SVOD revolution may have dethroned cable, but it now finds itself on the defensive against platforms built on speed, scale, and social relevance. The next generation is already watching something else. It’s time the industry caught up.
