
Competition intensifies in the streaming world as economic circumstances challenge household finances and the entertainment industry. This was very clear at the recent StreamTV Show held in Westmintster, CO, where industry players convened to discuss the state of the market, the latest business strategies for streaming video distribution, the impact on advertising, and the challenges with profitability.
Service providers and platform players battle for dollars through subscriptions, advertising, premium content, and bundles in the highly competitive entertainment sector. Over the last 10 years, the traditional TV/cable bundle has declined, and an increasing number of cable TV providers have determined that legacy/cable television does not provide sufficient profitability.
Streaming, meanwhile, is the leading choice for video entertainment today; today, 88% of US internet households subscribe to at least one OTT service, according to Parks Associates' most recent Video Services Dashboard, a consumer research study of 8,004 heads of US internet households conducted between March 21, 2024 and April 4, 2024.
The traditional pay-TV subscription rate has fallen to 43%, representing 51.6 million internet households. Many households, which previously had both streaming and traditional pay TV, are now opting for one over the other. Due to increasing content and subscription costs, consumers are cutting back on their subscriptions and switching to more affordable ad-supported plans.
Parks Associates research shows that US households with 5 or more OTT subscriptions dropped from 52% to 46% and that average monthly spending on OTT SVOD services decreased from $73 in Q3 2023 to $63 in Q1 2024.
In the days of cable television, viewing was limited to linear programs intermixed with advertisements, but the advent and proliferation of streaming have significantly transformed video viewing. Today, consumers have a plethora of options—some for a nominal fee, some for a substantial one, some accompanied by advertisements, some ad-free, and still others that are completely free and obtained via antenna, over-the-air (OTA).
The use of AVOD and FAST services grew to 42% in Q1 2024, confirming past predictions that more consumers will find these more cost-effective options appealing. This migration also benefits streaming providers, who earn more advertising revenue than subscription fees.
Consumers now have an unprecedented volume of video content options, with an array of streaming services, on-demand platforms, and traditional broadcasters offering diverse and extensive libraries to suit every preference and interest. According to Parks Associates research, companies that own or aggregate television and video assets distribute their content across 18 platforms on average.
Consumers are now empowered to seek out what content to watch and where and how to obtain it all. This freedom inevitably affects how consumers choose their entertainment setup, especially in the face of external circumstances such as economic factors, industry changes, and/or technological advancements.
The wide variety of content options has made it significantly challenging for advertisers to showcase their products to viewers. This issue was a major topic of discussion at the StreamTV Show, with key industry players emphasizing the necessity of investing in additional solutions to unify a highly fragmented market and its associated data.
Fragmentation challenges decision making
With numerous streaming services, on-demand platforms, and traditional broadcasters each vying for audience attention, advertisers face the challenge of effectively targeting and reaching their desired demographics. This fragmentation makes it harder to achieve the same level of exposure that was once possible with fewer, more centralized channels.
Solution providers are everywhere in the streaming market, pushing the latest “AI” solution but with the most sophisticated providers focused on building “a full stack” of technology solutions.
A comprehensive full-stack software solution opens many new opportunities for advanced applications and deeper data integration, enabling a more meaningful understanding of key metrics. Recent custom research from Parks Associates and SymphonyAI media division notes that 47% of executives in the streaming industry lack the data needed to make good business decisions. Even when that data is available, it is often difficult or impossible to collate and compare—71% of industry executives say it is difficult to see all the streaming-related data in one place.

The fragmentation in the data sources creates numerous and ongoing headaches for them when making informed decisions about their services and subscribers. For example, 78% of streaming executives from the research said content performance by title is or would be "very useful," but just 46% said that data is fully accessible to them.
By integrating all aspects of the streaming ecosystem—from content creation and management to distribution and monetization—these advanced software solutions provide a unified platform that consolidates data across various touchpoints. This integration allows streaming providers to gather and analyze a rich set of metrics, offering insights into viewer behavior, content performance, and advertising effectiveness.
For example, advanced analytics features enable providers to track detailed viewer engagement metrics such as watch times, content preferences, and user interactions. By combining these insights with data from advertising campaigns and subscription trends, providers can gain a holistic view of their audience's habits and preferences. This approach supports more effective decision-making, helping providers optimize content strategies, personalize viewer experiences, and refine advertising efforts.
A full-stack solution facilitates seamless integration with third-party tools and platforms, enabling the creation of custom applications that enhance functionality. Providers can integrate with CRM systems for targeted marketing, employ machine learning algorithms for personalized recommendations, and utilize automated content management and distribution tools.
In addition, the financial dynamics of content delivery have evolved, prompting a shift from pure subscription models to hybrid and ad-supported video-on-demand (AVOD) models. As competition intensifies and consumer subscription fatigue sets in, platforms increasingly adopt hybrid approaches that combine subscription fees with advertising revenue. AVOD models, in particular, offer free or lower-cost access to content in exchange for viewers watching ads, providing an attractive alternative for budget-conscious consumers.
This shift necessitates a more strategic and data-driven approach from advertisers, who must now navigate a complex ecosystem to effectively place their products while balancing the need for targeted advertising and viewer engagement.
Reaching profitability will be a challenge for streaming service providers, and fees for services are likely to continue to rise, along with new bundles for consumers to choose from. The higher costs for these services may be necessary to reach a sustainable level of profitability, but consumers need to see the value for the increased costs. Consumers are worn down from inflation affecting virtually every aspect of daily life and are pairing down accordingly. The financial pressures now for consumers only intensifies the competition among streaming vendors and will fuel more growth of free ad-based services.
Elizabeth Parks is president and CMO of Parks Associates. As President, Elizabeth supports all teams within Parks Associates, a woman- and family-owned market research and consulting firm. She oversees research topics and coverage areas for the company and directs the integrated strategic communications plan for Parks Associates, including advertising, public relations, and marketing. Elizabeth has supported the growth of Parks Associates business and marketing services for 23 years and is the key organizer for all of Parks Associates' events, including Parks Associates signature event CONNECTIONS™. She also drives the overall mission to provide clients with the best consumer and industry research and analysis on the SMB and consumer technology markets to inform strategic market decisions.
Elizabeth joined Parks Associates on a full-time basis after graduating from the University of Texas at Austin with a BA in psychology.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by StreamTV Insider staff. They do not represent the opinions of StreamTV Insider