Streaming Year in Review 2025: Online Video Is Now an Advertising-Led Business

Streaming Media

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Old Hollywood got Wall Street’s memo: “Do whatever it takes to do what Netflix is do­ing.” And finally, the studios have begun making money from streaming.

With the exception of NBCUniversal, the biggest leg­acy media companies all reported a profit from their direct-to-consumer (DTC) businesses in Q3 2024. They got there by variously writing down or shedding ca­ble assets, slashing jobs, hiking prices, policing pass­word-sharing, improving bundled offerings, and put­ting the full focus of their business strategy into online.

In “The Next Big Arenas of Competition” report, consultant firm McKinsey & Co., belatedly perhaps, projects that the video streaming industry will grow to $510 billion (even $1 trillion) worldwide by 2040. In addition, it forecasts that the number of global households that stream video will increase from 670 million in 2022 to 1.4 billion in 2040. This compares with predictions from Ampere Analysis that SVOD subscriptions will grow from 1.8 billion globally at end of 2024 to pass $2 billion by 2029, by which time worldwide revenue will top $190 billion.

Behind those numbers are some variable factors, such as the pace of growth in developing countries, the shift from cable fees to streaming ones, and high­er-priced subscriptions from bundled offerings.

FREE STREAMING ON THE RISE

“Ads are the new revenue multiplier,” McKinsey & Co. states in its report. Indeed, as the number and range of streaming services proliferate, a form of mar­ket saturation has begun to kick in. In its “Global En­tertainment & Media Outlook 2024–2028” report, PwC has global OTT video subscriptions rising to 2.1 billion in 2028 from 1.6 billion in 2023, but global average rev­enue per OTT video subscription hardly moving from $65.21 million in 2023 to $67.66 million in 2028.

As subscription revenue growth levels off, global AVOD revenue will continue to grow at a compound annual growth rate (CAGR) of 14.1%, charts PwC. By 2028, advertising will account for about 28% of global streaming revenues, an increase from 20% in 2023.

Advertising is now the biggest revenue earner in online video, according to Omdia figures. By 2029, SVOD revenues will be at $185 billion compared to premium AVOD at $141 billion, with TikTok not far behind at $100 billion. But online video advertising will be the number-one source of revenue by far, as Omdia projects it will rake in $362 billion globally.

In 2024, the media and entertainment market topped $1 trillion, driven by the huge growth in streaming video. Omdia data marks online video as the biggest chunk ($392 billion), followed by traditional TV ($327 billion), games (sizable at $220 billion), music ($44 bil­lion), and theatrical ($36 billion). By 2026, there will be more homes watching free and free ad-supported content online than via broadcast television globally.

Omdia figures show that by 2029, 44% of people will have both pay TV and SVOD, but the number of homes watching only pay TV will have declined dramatically to 30%, while those watching only SVOD will have risen above a quarter of all house­holds. “The switch to online is clear,” says Maria Rua Aguete, Omdia’s senior research director for media and entertainment. “The pay TV bundling strategies of service providers have pushed the pay TV only home into sharp decline.”

YouTube officially became the largest streaming TV platform when, in July 2024, it was the first to surpass 10% of total viewing in Nielsen’s Gauge re­port. In the U.K., more than 9 in 10 online adults use the service, according to regulator Ofcom’s “Online Nation 2024” report.

SVOD FATIGUE

And yet, there is also evidence of streaming fatigue and an industry approaching peak SVOD stacking. Deloitte forecasts that after seeing a high in 2024 with four services in the U.S. and a little over two in Eu­rope, “SVOD stacking has reached its limit and will start declining in 2025.”
Deloitte predicts a resurgence of aggregation, in which telcos, pay TV platforms, and tech platforms will consolidate multiple content sources into single offerings, similar to the traditional model of pay TV providers. This pivot may reduce costs and create a more sustainable streaming ecosystem. “This shift from a promising, user-centric model to a complex, fragmented experience has created a call for a return to aggregation, echoing the simplicity and accessibil­ity that initially drove the streaming revolution,” says Kevin Westcott, Deloitte’s global telecommunications and media and entertainment (TM&E) sector leader. “We now expect to see a new era of streaming, one that prioritises user experience and innovation. The future of AI-powered streaming lies in platforms that can anticipate individual preferences, deliver tailored
content, and blur the lines between traditional viewing and interactive experiences.”

Hub Entertainment Research senior consultant Mark Loughney predicts that at least one “second-tier streaming service—Max, Paramount+, or Pea­cock—will cease to exist as a standalone platform in 2025. Instead, it may merge with another streamer to form a new service or be acquired by a deep-pock­eted suitor and combined with other video offerings.”

From 2025 and beyond, international streamers will increasingly look to Asia-Pacific for growth. India is cited by Ampere Analysis as a target for Netflix. “India was Netflix’s second-largest subscriber growth mar­ket in 2024, and the company has barely scratched the surface there in terms of growth potential,” says Am­pere Analysis research manager Maria Dunleavey.

PwC thinks India will be the world’s fastest-growing online video market in the next 5 years and is “ripe for consolidation,” with around 101 million paid sub­scribers and 58 OTT platforms, about half of which are regional players operating in local languages. In addi­tion, Warner Bros. Discovery opened its Global Capa­bility Centre in Hyderabad, India, in September 2023.

STATE OF THE STREAMERS

So, what were the trajectories of the major stream­ing services in 2024, and where do they stand with 2025 now underway?

Warner Bros. Discovery

Warner Bros. Discovery ended Q3 2024 with 110.5 million global streaming subscribers, including for Max and Discovery+. It also had a DTC profit gain of $289 million, which in­cludes its streaming and premium pay TV services, compared with a $111 mil­lion profit in 2023. CEO Da­vid Zaslav pointed to the continuing international rollout of Max, which is now in 72 markets. The gain of 7.2 million users in Q3 2024 was the largest-ever quarterly growth in subscribers since the launch of its flagship streamer.

However, Warner Bros. Discovery took a midyear $9 billion write down on the value of its basic cable portfolio, which includes CNN and TNT, precipitat­ing a division of legacy from streaming assets that comes into force later this year.

Paramount

In July 2024, Paramount Global announced a merg­er of Paramount with Sky­dance Media. This two-step deal, in which Sony was a potential suitor, ended with Skydance Media paying $2.4 billion for Paramount parent National Amusements and merging with Par­amount to create “the new Paramount.” Skydance Me­dia CEO David Ellison plans technical improvements to Paramount+, including in the recommendation en­gine to increase time spent on the platform and to re­duce churn. A month later, Paramount Global took a $6 billion write down in value for its cable channels, including MTV, Nickelodeon, and Comedy Central.

Paramount+ reached 72 million subscribers by the end of 2024, and the company’s DTC segment, which includes Pluto TV, rose $287 million year over year to hit $49 million in profit. Paramount ended the year still $211 million in the red, but that represents a marked improvement on its $1 billion in losses a year earlier.

Disney

Disney earned $321 million from its streaming busi­ness in Q4 2024. It ended the fiscal year with 174 million Disney+ and Hulu subscriptions, with 37% in the U.S. and about 30% globally on an ad-supported tier. The company predicts $1 billion in operating earnings from streaming for 2025.

Since launching Disney+ in 2019, the business has lost more than $11 billion, and the company said that its operating margin in streaming won’t reach 10% until 2026, according to Fortune. “Disney is all in on streaming, positioned for a digital future that miti­gates traditional TV woes,” says Bloomberg analyst Geetha Ranganathan.

“Disney believes it has turned a corner, laying out positive forecasts for the next two years, featuring annual, double-digit [earnings per share] growth,” according to Enders Analysis. “Streaming is now re­liably profitable, although its low and generally inert [average revenue per user] will inevitably have to be stoked by more price rises.”

Disney’s finances were assisted by writing down $584 million in its entertainment linear networks during Q4 2024. That followed a $721 million write down in entertainment and international sport lin­ear assets in Q4 2023.

In fiscal Q2 2024, Disney’s DTC business returned a $47 million operating profit. Ampere Analysis’ Guy Bisson hails this as “a huge milestone” for the com­pany and for the entire studio streaming ecosystem. “Of all the studios, Disney was the only major to go ‘all in’ on streaming, pulling back key content for its streaming platform, massively reducing licensing to third parties and closing a number of its interna­tional thematic linear channels,” he says. “As a re­sult, managing the decline of its traditional business and the transition of its revenue streams to stream­ing was make or break for the entertainment divi­sion. … [A]s with other studios (and linear channel businesses around the world), Disney’s linear busi­ness is in fairly sharp decline. … There is no going back from here.”

February 2024’s news of Disney’s $1.5 billion invest­ment in Epic Games highlighted the competition gaming poses to TV among young viewers and, ac­cording to Hub Entertainment Research, “a massive opportunity for media companies to leverage their IP in a rapidly growing space.”

Netflix

In Q3 2024, Netflix had 282.72 million accounts globally, a year-on-year growth of 14.4%. Its adver­tising-supported tier alone now reaches 70 million monthly active users, with more than half of new sign-ups opting for the plan. Revenues grew 15% year on year to $9.83 billion, while net income was $2.36 billion, with forecasts of $43–$44 billion total revenues in 2025.

Notably, the company moderated expectations for its ad tier, stating in its Q3 2024 shareholder letter that “we don’t expect ads to be a primary driver of our revenue growth in 2025. The near-term challenge (and medium-term opportunity) is that we’re scal­ing faster than our ability to monetise our growing ad inventory.”

Unsurprisingly, Netflix has the best monthly churn rate of the eight premium SVOD services in the U.S. and Canada, fluctuating between 1%–3% in the last 2 years, according to Parrot Analytics’ Streaming Met­rics. This is well below the industry average, which is about 5%.
Parrot Analytics’ Brandon Katz attributes this to first-mover advantage (in which customers have developed habitual usage patterns over the last 15 years), compelling content, and a high-quality user experience and interface. “The company invested immense resources into its technology (Jake Paul vs. Mike Tyson buffering issues notwithstanding) and it shows. This is particularly true on a macro scale in which Netflix has always emphasised being platform agnostic, i.e. compatible with all devices.”

Netflix released the second season of Korean-language hit Squid Game on Dec. 26, 2024, a weekafter the official video game adaptation, Squid Game: Unleashed, rolled out. “It’ll be the largest television show globally for weeks,” predicted Gareth Sutcliffe, head of gaming for Enders Analysis. “When that launch­es, it will be absolutely massive, and they’re shipping a game simultaneously. I think that’s really aggres­sive, and I think that that’s really incredibly clever.”

Amazon Prime Video

Amazon shared in April 2024 that Prime Video has 200 million monthly users. That said, January 2024’s launch of an ad-supported tier, making all members default to ad-supported users, turned Prime Vid­eo into the industry’s larg­est ad-supported platform literally overnight.

In November 2024, Am­azon announced the clo­sure of FAST channel Free­vee in a move aimed at bol­stering Prime Video. Assuming all Freevee content is moved to Prime Video, it will now offer more than 30,000 titles. This is fewer than Tubi and Roku but far more than Netflix, which carries 9,200 films and TV series in the U.S., according to Ampere Analy­sis’ title-tracking Analytics service.

“The upsell opportunity is clear,” according to Ampere Analysis’ Orina Zhao. As of November 2024, 44% of Freevee viewers in the U.S. don’t yet subscribe to Prime Video, with further data suggesting that Amazon might have an addressable audience of up to 21.8 million domestic users who currently access only its free content. “In the context of the wider sub­scription market slowdown, this represents a signif­icant opportunity for Prime Video to target and sign up new subscribers,” says Zhao.

BIG MEDIA EXODUS FROM CABLE

Comcast cut the cord from its own cable networks in November 2024, the first major studio to sign away its linear TV assets for a future almost en­tirely based on streaming. It will spin off most of its cable television networks into a separate publicly traded company named SpinCo. Though not unex­pected, Hub Entertainment Research says that this is “a seismic shift in the foundation of the TV eco­system.” According to Parrot Analytics’ Katz, “The reality is that the rapid decline of pay-TV has become an untenable albatross on the share price of most legacy media companies.”

This move was followed in December with the pre­viously mentioned, similar Warner Bros. Discovery restructuring that’s scheduled to be completed by mid-2025. Both sets of cable divisions are profitable but in decline. Comcast’s prospects are considered to be more positive.

SpinCo includes MSNBC, CNBC, the USA Network, E!, and the Golf Channel. Over the 12-month period that ended Sept. 30, 2024, SpinCo assets generated approximately $7 billion in revenue across 70 million households, making it attractive for investment or sale. Observers believe the odds are less favourable to Warner Bros. Discovery because it needs the cash from its Glob­al Linear Networks division to pay down the heavy debt it took on when Discovery merged with WarnerMedia in 2022. At the time, that debt was worth $53 billion.

Comcast’s NBCUniversal should be better placed for growth from the legacy assets, which will concen­trate content from its film and TV studios, NBC, and Bravo onto Peacock. Nonetheless, Peacock lost $436 million in the Q3 2024.

“The gamble is that the short-term pain of losing all that remaining [linear] revenue will be off-set by longer-term confidence from Wall Street as resourc­es are redirected to growth initiatives such as broad­band, theme parks and streaming,” says Parrot An­alytics’ Katz.

In December 2024, Comcast and Warner Bros. Dis­covery entered into a mutually beneficial multiyear distribution agreement in which Warner Bros. Dis­covery landed continued carriage for its channels, in­cluding TNT and the Food Network, for an increased fee, on Comcast (Xfinity in the U.S. and Sky in the U.K.). The move lays the groundwork for the Europe­an launch of Warner Bros. Discovery’s Max.
Eyes are now on Disney. As noted by Deadline, Dis­ney CEO Bob Iger has said that its linear business “may not be core” to the company.

ADS AND EYEBALLS TO CTV

Ad dollars are moving from linear TV to ad-sup­ported streaming and CTV at pace. With all of the major streamers (except Apple) now fully invested in hybrid tiers on their DTC services and through FAST channels on CTV platforms, “the scene is set for more traditional TV spend to move over to streaming,” says Ampere Analysis’ Bisson.

By end of 2024, global CTV ad revenue was expected to surpass $30 billion, a 22% increase on 2023. North America is the biggest FAST market, with revenue for 2024 around $7.8 billion.

PwC thinks global CTV ad spend will pass $41 bil­lion in 2028 and notes that “retail media players are increasingly experimenting with ‘shoppable TV’ ad­vertising … an opportunity underlined by US retail­er Walmart’s purchase of smart TV manufacturer Vizio in February 2024. As more consumer attention migrates away from traditional TV to user-generated, short-form content, advertisers may need to follow this migration with approaches that go beyond the 30-second or 15-second spot. These may include re­lying more on influencers, offering experiential pro­motions, and tapping into new technologies that en­able creative messaging.”

Roku and Amazon are the most popular brands of streaming media players purchased for CTV de­vices in the U.S., while Samsung is the most popular brand of smart TV purchased anywhere, according to research by Parks Associates. Samsung’s FAST platform, Samsung TV Plus, has more than 88 million monthly active users.

By the end of 2025, the growing popularity of FAST and the proliferation of FAST channels will spur in­creased competition for viewers, predicts Hub Enter­tainment Research consultant David Tice. “Legacy media firms with FASTs will realise (once again) that content exclusivity is a key audience driver and will pull back key library titles for exclusive use on their owned-and-operated FASTs. However, they will contin­ue licensing less critical content to whoever can pay.”

vMVPD RISING

As traditional pay TV services gasp for breath in the U.S., the consolidation of satellite services may signal a shifting commitment to virtual multichannel video programming distribution (vMVPD).

Though the seemingly done deal hit snags and re­mains in limbo as of Nov. 22, 2024, DirecTV’s attempt­ed purchase of rival Dish Network from EchoStar is predicated in large part on merging their respec­tive vMVPDs, DirecTV Stream (which has fewer than 500,000 subscribers) and Sling TV (with 2 million sub­scribers), to better compete with the likes of You­Tube and Hulu. Meanwhile, YouTube TV ended 2024 north of 8 million subscribers, and starting in Janu­ary 2025, it jacked up prices by $10 to $82.99 a month, explaining that this was necessary to “keep up with rising content costs.”

Hulu has seen increases in subscribers year on year, with its Hulu + Live TV ser­vice settling near 4.5 million subscribers. Hulu raised the cost of Hulu + Live TV, which includes access to Disney+ and ESPN+, by $6 to $82.99 with ads (without ads is now $95.99).

“vMVPD services might be small in comparison to the size of streamers, but the current pay TV land­scape begs the question whe­ther further consolida­tion is on the horizon,” says Ampere Analysis’ Andrew Dougert. “Traditional dis­tribution methods of TV in the US are losing viability quickly, and the future is increasingly digital. The best strategy against the unrelenting streamer swell may just be to lean into the storm.”

In January 2025, Fubo joined forces with Hulu + Live TV to create a sport and entertainment-focused vMVPD with 6.2 million North American subscrib­ers. In agreeing to end its litiga­tion against the Disney, Warner Bros. Discovery, and Fox streamer Venu Sports, Fubo also won the chance to launch a new sport and broadcast service featur­ing Disney’s top sport and broadcast networks, in­cluding ESPN+.

XR, SPATIAL, METAVERSE, VOLUMETRIC

Apple brought Apple Vision Pro to market in Febru­ary 2024, rebranding Meta’s version of the metaverse to one of spatial computing, the chief difference be­ing the emphasis Apple puts on blending the real world with virtual data. The $3,500 goggles may en­case the wearer’s vision, but a transparent view of the outside world is piped to the 4K (per eye) display in real time.

Most of the experiences for Apple Vision Pro to date have not used AR. Among the hundreds of apps is one from the NBA that enables basketball fans to stream up to five games live or on demand simul­taneously. The PGA TOUR Vision app features 3D models of golf courses and a real-time shot tracker. Again, the video is 2D.

All major entertainment apps—Prime Video, Par­amount+, Peacock, Max, and Pluto TV—have ported to the platform, with the notable exception of Net­flix. U.K. broadcaster Channel 4 debuted a version of the game show Taskmaster.

Apple TV+ has gone one step further, providing content specifically made in Apple Immersive Video. This includes the scripted short film, Submerged, from Oscar-winning filmmaker Edward Berger, and the music series Concert for One. Apple’s long-awaited entry into this space injected momentum into the XR content creation ecosystem.

Meta is developing Orion AR glasses and Hyper­scape, its format for delivering photorealistic dig­ital replicas of spaces from the physical world into Quest headsets.

Compression specialist V-Nova offers a solution for packaging and delivering immersive content to XR headsets. Its PresenZ technology makes it possible to stream at 25Mbps using MPEG-5 LCEVC. NBCUni­versal is utilising PresenZ to turn intellectual prop­erty like How to Train Your Dragon into content that offers the user six degrees of freedom in the headset. V-Nova CEO Guido Meardi told IBC365, “We have in­vented a technology that uses the same pipeline used today to produce CG and VFX content to generate and stream XR content with six degrees of freedom. We allow the user to be inside as if it’s a video game.”

U.K. startup Condense Reality has developed a capture-to-playback pipeline for streaming live vol­umetric content. The BBC is an investor and has live streamed a series of performances by artists this year into a Radio 1-branded app built by Con­dense Reality. Nick Fellingham, the company’s CEO, says, “People talk a lot about VR, but you really feel presence when you’re consuming volumetric video. Shared live experiences in social 3D spaces is the future. It is inevitable that this kind of video will be­come more and more prevalent.”

U.K. SEEKS TO CONTINUE UNIVERSAL TV ACCESS

U.K. public broadcasters spent much of the year fret­ting over their future, with short-term and long-term solutions to ease audience migration from linear to in­ternet distribution.

Freely, which launched in April 2024, is a live-stream­ing platform from Everyone TV that’s backed by the BBC, ITV, Channel 4, and Chan­nel 5. It works on smart TVs loaded with the latest HbbTV standard. Freely is supplementary to individu­al broadcaster players like ITVX, with a focus on live linear rather than video on demand. It is intended to wean households from digital terrestrial delivery, such as the satellite service Freeview, which is also run by Everyone TV.

Longer term, there’s an active debate about the fu­ture of digital terrestrial television (DTT). In a report published in May 2024, U.K. regulator Ofcom con­cluded that this technology is no longer economical­ly viable with the overwhelming shift to broadband. One scenario is to sunset DTT after 2040, provided the around 1.5 million people who have DTT are not excluded. A report from Ernst & Young claims that a government switch to IPTV could hit the most vul­nerable households with a £218 (about $265) annual bill increase.

Meanwhile, speculation grew this year about a merger between U.K. broadcasters Channel 4 and the BBC, given the declining numbers who are watching linear and a stagnant ad market. The combination of public service broadcasting apps in Freely is a step toward that possibility.

Ros Atkins, BBC News’ analysis editor, told the Ed­inburgh TV Festival, “Perhaps we do need to ask [the] question: Is it viable to have this many public service broadcasters in the median term? The digital revolu­tion in TV and video isn’t coming. For better or worse, it’s here. There’s no going back.”