Streaming services see high churn rates amid rising costs with Gen-Z, Millennials turning to creators

U.S. media and entertainment companies are facing increased competition from social platforms that are capturing a growing share of audience attention and advertising dollars, according to Deloitte’s “2025 Digital Media Trends” report.

While studios and streaming video-on-demand (SVOD) providers continue to invest in premium content, the report indicates that social video platforms, driven by algorithmically optimized user-generated content (UGC), artificial intelligence (AI) and advanced advertising technology, are emerging as dominant players in the media ecosystem.

Deloitte’s survey of U.S. consumers found that Americans spend an average of six hours per day on media and entertainment.

That time is increasingly fragmented among traditional TV, streaming, social media, gaming and audio formats. Social platforms now account for a significant portion of this time, particularly among younger generations, with 56 percent of Gen Z respondents and 43 percent of millennials reporting that they find social media content more relevant than traditional TV and film.

This shift in engagement is also influencing advertising trends. Over half of total U.S. ad spending is now directed toward digital platforms, with social video platforms capturing the majority share. Gen Z and millennials are significantly more likely to say that ads and reviews on social media influence their purchasing decisions compared to ads on SVOD services or traditional TV.

Streaming providers are adjusting by introducing more ad-supported subscription tiers and exploring content bundling strategies. According to the report, 54 percent of SVOD subscribers now use at least one ad-supported tier, an eight-point increase over the previous year. However, rising subscription costs and consumer fatigue with managing multiple services are driving high churn rates.

Among Gen Z and millennial users, over half reported cancelling at least one SVOD service in the past six months.

Meanwhile, traditional cable and satellite TV services continue to decline, with only 49 percent of consumers maintaining subscriptions, down from 63 percent three years ago. Cost remains a key factor, as average cable bills exceed $120 per month, nearly double the cost of four paid streaming services combined.

Advertisement

In contrast, social platforms offer content for free, supported by ad tech that enables precise targeting and measurable results.

These platforms also provide tools for independent creators, many of whom now rival traditional celebrities in influence. The report found that about half of younger respondents feel a stronger connection to social media creators than to actors or TV personalities.

Studios are responding by investing in advertising technology, experimenting with AI-driven production methods and exploring partnerships with creators and platforms. Some studios are distributing content directly on social platforms or forming bundled services to aggregate audiences for advertisers.

According to Deloitte, the media and entertainment landscape is being reshaped by these dynamics. Social platforms, supported by AI and global reach, are redefining content discovery, engagement and monetization. Traditional studios may need to consolidate or modernize their operations to remain competitive in a market increasingly defined by digital-first consumption and personalized content delivery.