Media providers and social media platforms are navigating a delicate alliance. With an abundance of digital entertainment options, social platforms have become direct competitors for consumer attention, further straining this relationship. Deloitte’s 2023 Digital Media Trends report revealed that Generation Z and Millennials gravitate towards social, user-generated video content because it’s free, convenient, and offers endless, algorithmically-targeted content tailored to their interests. Social media, accessible in the palms of their hands, is constantly buzzing with global peers riffing on popular culture. For younger Americans, a select few services have become the go-to destinations for social video and entertainment. Unsurprisingly, Gen Z and Millennials have been canceling streaming video on demand (SVOD) subscriptions more than older consumers.
Our 2024 Digital Media Trends report indicates an even stronger preference shift among young consumers. Nearly half (47%) of Gen Z and a third of Millennials surveyed favor social media videos and live streams as their preferred video content. This trend does not imply the end of longer-form video entertainment but underscores the effectiveness of social media algorithms and the influence of content creators and influencers. Media companies, especially SVOD providers, could learn from how social media platforms drive engagement and retention.
One key factor is content discovery. Social media services effectively solve the discovery problem, which can lead people to seek entertainment elsewhere. For instance, 60% of Gen Z prefer user-generated content videos because they don’t have to spend time searching for something to watch. Social media platforms have invested heavily in algorithms that offer a continuous stream of relevant and personalized content. This isn’t merely another form of TV; viewers can connect with communities of like-minded users, gaining a sense of belonging alongside their entertainment.
In contrast, many people report difficulties and frustrations with discovering content on SVOD services. This isn’t due to a lack of effort: nearly 50% of those surveyed say they spend too much time searching for streaming content to watch. Subscriber retention is crucial for SVOD providers, who must give subscribers a compelling reason to continue their service each month. However, nearly half of respondents report frequently abandoning an entertainment experience because they can’t find what they’re looking for. In 2024, the top six SVOD providers are expected to spend over US$100 billion on content. Yet, viewers can’t watch what they can’t find, which means much of this investment may not be fully realized.
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