Pay TV: Making money but losing audiences
Cable and satellite television7 remain significant players in media and entertainment, though subscriptions continue to decline. We found that 49% of consumers surveyed currently have a cable or satellite TV subscription, down from 63% three years ago.8 The primary reasons subscribers report paying for these services are to watch live news (43%) and sports (41%). However, the market continues to fall, likely because SVOD services now offer more live sports options, and social media provides free sports clips and news recaps.
Older generations are more likely to maintain cable or satellite TV subscriptions, but 23% of Generation Z and 18% of millennial cable subscribers intend to terminate their subscriptions within the next 12 months, compared to only 8% of boomers.
Cost is likely a factor for these younger subscribers looking to cancel: Subscribers report spending an average of $125 per month on their cable or satellite TV subscriptions, which is significantly higher than the $69 on average subscribers report spending for four paid streaming services combined, according to our Digital Media Trends data. Subscribers also feel frustration with the number, and quality, of ads they’re required to watch at this higher price point.9
Live-streaming TV services offer an alternative, are slightly more popular with younger generations surveyed, and live-streaming TV subscribers in our survey report spending 35% less monthly on average for these services than cable or satellite subscriptions, but their growth has stagnated at around 40% of households for the past two years.10 A likely challenge is that these services tend to cost more than ad-free SVOD services, with pricing that seems to target existing pay TV subscribers accustomed to such costs, rather than younger generations gravitating to much cheaper— or free—media alternatives.11
Although cable and satellite subscriptions are falling, and live-streaming TV subscriptions appear stagnant, some in younger generations still show interest in live programming: Forty-three percent of Gen Z and millennials surveyed indicate a willingness to pay more for streaming video subscriptions that include access to live sports, although their engagement with live content remains to be seen. When asked about the types of content they spend the most time watching on SVOD, 27% of consumers said live sports, and just 8% said live events like music concerts. This may be due to a lack of options for those categories on SVOD, along with the ability to watch this content in other places: a third of Gen Z respondents say they don’t subscribe to an SVOD service to watch sports because they watch the clips and highlights on social media.
One challenge is that traditional studios still draw considerable revenues from their pay TV businesses.12 As they bring advertising to their streaming services, they may be hoping to migrate those pay TV ad revenues along with their audiences. However, global ad revenues for TV, including streaming video, are expected to see slow growth of around 2.4% in coming years, significantly less than overall advertising.13
Streaming video services: balancing value and frustrations
A similar tension seems to exist with streaming video services, which have subscription costs that may outweigh their perceived value. Fifty-three percent of consumers surveyed say their SVOD subscriptions are the paid media and entertainment services they use most frequently. However, 41% percent of consumers overall say the content available on SVOD isn’t worth the price, up five percentage points from our 2024 report.14 At the same time, roughly half (47%) of consumers say they pay too much for the streaming services they use, suggesting there is an imbalance between cost and perceived value. Indeed, while the average number of paid SVOD services has remained the same, at four per subscribing household, the overall cost subscribers surveyed say they pay has gone up 13% in the past year, from an average of $61 per month to $69. Gen Z and millennials, with an average of 5 paid SVOD services, have seen a 20% increase (figure 3).
link