Streaming Subscriptions Reach 91% of US Internet Households as Ad-Supported Models Redefine Profitability
News Summary
Parks Associates announced its eighth annual Future of Video: Business of Streaming event, scheduled for November 18-20, 2025, in Marina del Rey, California. The event will feature the release of the S.O.S. State of Streaming report, which analyzes consumer trends and technologies driving the global shift from legacy pay TV to digital-first streaming, enabling hybrid monetization, aggregation, and interactivity. According to Parks Associates data, 91% of US internet households subscribe to at least one streaming video service, while traditional pay TV has declined to 41% of households. Consumers average nearly six video subscriptions and spend approximately $109 per month, making the US video services market a $147 billion annual economy. Jennifer Kent, VP of Research at Parks Associates, stated that streaming is now about experience, engagement, and profitability, blurring the lines between streaming, broadband, and commerce, positioning the television as a connected platform for content, advertising, and transaction opportunities.
Background
In recent years, the global entertainment industry has undergone a significant transformation from traditional linear pay TV to on-demand streaming services. This shift has been driven by evolving consumer preferences, technological advancements, and the rise of digital platforms offering greater flexibility and personalized content choices. As the streaming market matures and competition intensifies, service providers are actively exploring new monetization models. Ad-supported video on demand (AVOD) and hybrid models (combining subscriptions with ads) have emerged as key strategies to combat rising user acquisition costs and subscription fatigue. This evolution reflects the industry's pursuit of diversified revenue streams and enhanced user value.
In-Depth AI Insights
What do the high penetration of streaming and the rise of ad-supported models signify for content creators and distributors? - Content creators face increased monetization pressure, needing to balance exclusive content with broader audience reach. The proliferation of ad-supported models makes high-quality, differentiated content crucial for attracting advertisers and retaining users. - Distributors' strategic focus will shift from pure subscription growth to increasing Average Revenue Per User (ARPU) by maximizing user value through advertising, bundling, and value-added services. - This also signals an elevated status for content aggregators and technology platforms (like smart TV operating systems), as they become critical nodes connecting content, advertisers, and consumers, gaining more bargaining power and data insights. Given consumers subscribe to an average of nearly six services, is the risk of subscription fatigue underestimated, and how should companies address it? - The risk of subscription fatigue is real, though it may currently be overshadowed by high industry growth. Consumer price sensitivity will increase, prompting more frequent evaluation and switching of services. - Companies should respond by offering differentiated content portfolios, more flexible subscription options (e.g., pay-per-view or short-term subscriptions), and more attractive bundled services. - Furthermore, leveraging data analytics for precise content and ad recommendations, enhancing user experience, and implementing loyalty programs to reduce churn will become paramount. How will the blurring lines between streaming, broadband, and commerce impact the strategies of major tech companies and traditional telecom operators? - For major tech companies, this presents an opportunity to deeply integrate streaming content with their core advertising, cloud services, and e-commerce ecosystems, creating strong user stickiness and unlocking new revenue streams. - Traditional telecom operators face pressure to transform from mere broadband providers into more comprehensive digital service providers. Forming partnerships with content platforms, offering bundled services, and even investing in original content are key to their competitiveness. - This convergence trend could lead to new industry alliances and M&A, further blurring traditional industry boundaries and forming cross-sector "super-platforms," thereby reshaping the competitive landscape of the digital economy.