A new study from Deloitte finds companies are competing for an average of six hours of daily media and entertainment time, across all digital types, per person – one where streamers’ efforts to grab finite time and attention from younger generations are challenged by Gen Z’s affinity for and connection to social, short-form and user-generated content over traditional TV shows and movies.
According to Deloitte’s 19th Digital Media Trends report, a survey of nearly 3,600 US consumers age 14 and older, that six hour number doesn’t appear to be growing and it’s unlikely any form of media will capture all entertainment hours, with individuals each having their own mix of SVOD, UGC, social, gaming, music, podcasts and others filling that time. However, findings do show a clear preference among Gen Z (those born 1997-2010, ages 14-27) for engaging with social and user-generated content over TV shows and movies, compared to consumers at large.
The report also called out a confluence of factors impacting streaming services’ competitive position against social and UGC for attracting younger generations: From rising subscription costs amid dampened perceived value among consumers to the continued and increased importance in creators’ influence and relevance for Gen Z and millennials – and the fact that studios and streamers’ have focused on investing in premium content while social and short-form platforms instead built up ever-smarter AI and data-driven algorithmic engines that serve up personalized content recommendations and feeds that resonate as well as targeted advertising.
To be sure, Gen Z is still watching TV shows and movies – but time dedicated to UCG and social and that spent watching traditional programming differs from overall consumer habits. Per Deloitte, Gen Z’s surveyed spend 54% more time – or about 50 minutes more per day – than the average consumer on social platforms or watching user-generated content. And that use means less time spent elsewhere. Gen Z’s surveyed spend 26% less time, or about 44 minutes less per day, than the average consumer watching TV shows and movies.
Also giving a nod to the engagement factor of UGC, Nielsen’s Media Distributor Gauge monthly snapshot showed YouTube as the leading distributor across media companies, capturing 11.6% of total TV usage in February.
Also impacting competition for streamers is that these UGC and social platforms offer a breadth of free ad-supported content at a time when SVOD subscriptions are rising (on average now costing $16 per month for an ad-free SVOD, per Deloitte). On average, consumers surveyed consider $14 per month the sweet spot for their favorite ad-free service but most (60%) said they’d cancel their favorite service if the price rose by $5 per month.
Overall consumer adoption has leveled off at an average of four SVOD services, where some may be cost-conscious, but many are also feeling less strongly about the value exchange for said services.
Almost half (47%) surveyed by Deloitte said they pay too much for the streaming services they use and 41% believe the content available on these services isn’t worth the price – up 5 percentage points from 2024.
Financial concerns could be part of the picture as the percentage of SVOD subscribers that have at least one ad-supported tier of paid service grew to 54%, up from 46% last year. In addition, more than two-thirds of Gen Zs and millennials now utilize free ad-supported TV (FAST) services.
As SVODs look to attract and retain more viewers, including younger generations, some have paid big bucks to scoop up live sports rights including NFL, NBA and others. This could bode well as 43% of Gen Z and millennials said they are willing to pay more for streaming video subscriptions that have live sports.
However, younger generations’ preference for short-form content is evident here too, as Deloitte found a third of Gen Zs don’t subscribe to streaming TV services to access live sports because they watch sports clips and highlights on social media instead.
This data point could be welcome by Warner Bros. Discovery, which lost out on major NBA rights (which went to Amazon Prime Video, Disney and NBCUniversal) and was seen to get somewhat of a consolation prize in instead securing certain global rights, as well as access to highlights for its Bleacher Report digital news platform, and social media service House of Highlights for clips, among other elements.
Speaking at a Morgan Stanley investor conference earlier this month WBD CEO David Zaslav said it saved the company a ton of money by not doing the NBA, which it can invest in other content and believes the deal it did secure “is really going to work for us,” in part because of the access to short-form clips that younger viewers enjoy.
“We have House of Highlights for the next 11 years globally and we think that’s going to be a place… that’s growing pretty significantly,” Zaslav said, also noting that “a lot of the young generation don’t want to watch the whole game. They want to go to one place.” He likened House of Highlights to an NFL Red Zone for basketball, adding “we think that’s a great growth engine.”
Creators, social influence relevance, viewing habits
Deloitte’s study also emphasized the continued importance of social media creators as influencers that drive deeper connections with younger audiences and impact both viewing and purchase decisions.
Per the study, around half of Gen Zs (52%) and millennials (45%) feel a stronger connection to social media creators than TV personalities or actors while 56% of Gen Zs and 43% of millennials said social media content is more relevant to them than TV shows or movies.
While there have been early efforts to port consumers’ affinity for creators into a more traditional TV environment (such as what Sabio’s Creator TV is doing on FAST, and in perhaps one of the most prominent examples, Amazon last year teamed up with popular YouTube personality MrBeast to create a reality competition show on Prime Video) but Deloitte’s study found mixed results about consumer sentiment on the shift of social creators to traditional TV environments.
While 49% of Gen Zs and 40% of millennials said they would be more willing to watch TV shows or movies starring their favorite online creators, another 30% believe creators lose their authenticity when featured on TV.
Still, the report highlighted how social and short-form video platforms like YouTube and creators can help boost awareness and interest for premium video content, helping to shape viewing habits by word of mouth to their social audiences. Of Gen Zs and millennials surveyed, 56% said they watch shows or movies on SVOD after hearing about them from online creators and 53% feel they get better recommendations on what to watch from social media.
And although streamers are working to improve their own content discovery and personalization capabilities Netflix leadership itself has echoed the sentiment that YouTube and other social platforms can be a powerful marketing vehicle, as well as a place to find new potential storytellers.
Speaking on the company’s Q4 earnings call about competition against short-form video, Netflix co-CEO noted that when younger audiences get excited about a Netflix TV show or film “they go into social media accounts and talk about the shows. They do tributes to the shows.”
He reiterated that professional longer-form storytelling is still Netflix’s core, but it wants to be where younger consumers are, saying “as eyeballs get pulled into other places, we definitely want to be there for them as well. I do find that the short-form services also are a great breeding ground for new storytellers.”
It’s already made some moves, including inking a licensing deal to bring episodes from popular children’s YouTuber Ms. Rachel onto the SVOD platform.
And others like Disney have utilized YouTube to offer free tastes of full episodes to drum up interest for the latest season of shows on its SVOD service, as it did earlier this month in making the first three episodes of Season 1 of Andor available for free on the Disney+ YouTube channel ahead of the Season 2 premiere.
UGC and social platforms are also serving up personalized and targeted advertising, which appears to be resonating with younger consumers. Among Gen Zs surveyed by Deloitte, 63% said ad or product reviews on social media are most influential to purchasing decisions, compared to 28% who said streaming video ads were most influential – for millennials the figures were 49% and 25%, respectively.
“AI is revolutionizing the future of entertainment, unlocking unprecedented possibilities. It can empower media and entertainment companies to better understand audience preferences at the next level, delivering hyper-personalized content and experiences that help foster deep engagement,” said China Widener, vice chair at Deloitte and US technology, media and telecom leader, in a statement. “As traditional advertising models are re-imagined, TV and streaming services may struggle to retain ad dollars. Those who harness the capabilities of AI can define the next generation of entertainment, and those who don’t may be at risk of losing an entire generation of viewers.”