As streaming prices keep climbing, more subscribers are willing to opt into advertising to keep a lid on costs.
Today, 54% of SVOD subscribers have at least one ad-supported tier of a paid service, up from 46% last year.
That’s one of the key findings in Deloitte’s 19th annual Digital Media Trends report, which the consulting firm released Tuesday. The findings are from an online survey of 3,595 U.S. consumers conducted in October 2024.
With Amazon Prime Video and Netflix recently turning to advertising as a consumer targeting tool and a supplement to subscription revenue, traditional media companies have also ramped up their efforts. Execs have publicly declared a strategy of steering consumers toward cheaper, ad-supported subscription tiers and the companies favor the ad tiers when they are participating in bundled offerings.
Another key takeaway from the Deloitte report is the draw of social media relative to traditional entertainment.
Gen Zs surveyed by Deloitte spend 54% more time – or about 50 minutes more per day – than the average consumer on social platforms or watching user-generated content. They also spend 26% less time (44 minutes less per day) than the average consumer watching TV and movies.
Accordingly, younger generations (56% of Gen Zs and 43% of millennials) deem social media content to be more relevant than traditional TV shows and movies.
Perhaps because they bear some resemblance to social media’s free, lean-back consumer proposition, free, ad-supported TV (FAST) channels are regularly tuned in by more than two-thirds of Gen Zs and millennials.
“Entertainment providers should embrace innovation and agility to help them thrive,” said Doug Van Dyke, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader. “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.”
