2025 Trends: 5 Ways Tariffs Are Set to Transform the Streaming Industry

Why it is the topic trending

• Emerging Economic Factors: The potential implementation of tariffs is a significant economic development with wide-ranging implications for various industries, including the prominent streaming sector.

• Impact on a Major Industry: The streaming industry's considerable influence on entertainment makes any factors causing transformation highly relevant to investors, industry professionals, and consumers.

• Timing with Industry Events: Discussions surrounding these potential changes are coinciding with key industry events like the National Association of Broadcasters Show and the upcoming upfronts, increasing their timeliness and relevance for media and advertising stakeholders.

• Potential Shifts in Business Models: The article suggests that tariffs could lead to substantial changes in how streaming services operate, affecting areas such as pricing strategies, content production approaches, and advertising models.

• Consumer Impact: Ultimately, shifts within the streaming industry will directly influence how consumers access and finance their entertainment options, making the topic pertinent to the general public.

Overview:

This article delves into five potential transformations that tariffs could bring to the streaming industry. These include a likely surge in popularity for free, ad-supported streaming television (FAST) services as consumers seek cost-cutting measures, the potential for YouTube to further solidify its dominance as a free and widely accessible platform, an expected increase in bundling strategies among streaming services, a predicted rise in production costs for film and television content, and an anticipated acceleration in Connected TV (CTV) advertising towards performance-driven strategies utilizing AI. The article emphasizes that these implications are being actively discussed within the industry amidst growing economic uncertainty and the potential for tariffs to reshape the streaming landscape.

Detailed Findings:

• Rise of FAST Channels: Experts anticipate that tariffs causing price increases in electronics and reduced household spending will drive more viewers to cancel paid subscriptions in favor of free, ad-supported streaming (FAST) platforms. An April 2024 study by LG indicated that 69% of streaming viewers prefer FAST, and 31% intend to cancel a paid service in 2025.

• YouTube's Expanding Dominance: Rising costs for both hardware and subscription services may further cement YouTube as the most accessible global streaming destination due to its widespread availability, effective recommendation engine, and free access to a vast library of content.

• Acceleration of Bundling: Given the continued fragmentation of the streaming market, tariffs are expected to incentivize more service consolidation and bundling to improve user retention and decrease churn, offering consumers easier access to diverse content through unified offerings.

• Increased Production Costs: Tariffs are projected to increase the cost of essential materials for film and television production (like lumber, steel, lighting, and costumes), potentially leading to budget constraints, fewer content commissions, and a greater emphasis on cost-saving measures in Hollywood. This timing is particularly challenging as the industry prepares for the upfronts, where economic uncertainty may make advertisers hesitant to commit to large deals.

• Shift to Performance-Driven CTV Ads: With production costs rising and increased pressure on return on investment, CTV advertising is expected to shift even more towards performance-driven strategies, utilizing AI for tasks ranging from ad creation to real-time audience targeting, incorporating elements like QR codes and dynamic creative optimization to directly measure ad effectiveness.

Key Takeaway:

The potential implementation of tariffs could significantly reshape the streaming industry by influencing consumer behavior towards cost-conscious choices, shifting business strategies towards free or bundled models, increasing content production expenses, and further evolving advertising approaches in the Connected TV space.

Main Trend:

The main trend outlined in this article is The Era of Streaming Economic Realignment, where external economic pressures, primarily potential tariffs, are compelling the streaming industry to critically reassess its financial models and operational strategies to better align with heightened consumer price sensitivity and escalating production costs.

Description of the trend (please name it):

The Streaming Value Proposition Shift describes the anticipated transformation within the streaming industry where the core focus is shifting towards delivering greater value to consumers in an economically constrained environment. This trend is driven by the potential impact of tariffs, leading to increased costs for hardware and content production. As a result, streaming services and related businesses are expected to prioritize offering more affordable options, such as free ad-supported tiers and bundled packages, while also optimizing their content production and advertising strategies to maximize efficiency and return on investment. The success of streaming platforms in this new era will likely depend on their ability to effectively balance content quality and accessibility with cost-effectiveness for both consumers and themselves.

What is consumer motivation:

Consumer motivation in this context is primarily driven by:

• Cost Minimization: With potential price increases on essential goods, consumers will actively seek ways to reduce their spending on non-essential entertainment like streaming services.

• Maximizing Value: Viewers will gravitate towards streaming options that provide the most content or the best user experience for their budget.

• Convenience and Simplicity: Free and easily accessible platforms like YouTube, along with bundled services that streamline content access, will hold greater appeal.

• Subscription Fatigue Relief: Many consumers, especially younger demographics, are experiencing an overload of paid subscriptions and are looking for ways to consolidate or eliminate some.

What is driving trend:

Several factors are driving this potential "Streaming Value Proposition Shift":

• Imminent Tariffs: The looming possibility of increased tariffs on consumer electronics and materials used in content production is a major catalyst for the anticipated changes.

• Economic Uncertainty: Broader economic concerns, including potential inflation and a tightening of household budgets, are making consumers more discerning about their spending.

• Market Saturation: The increasingly crowded and competitive streaming landscape is leading to subscriber fatigue and higher churn rates, necessitating new strategies for retention.

• Profitability Imperative: Streaming services face growing pressure from investors to demonstrate profitability after a period of focusing primarily on subscriber acquisition.

What is motivation beyond the trend:

Beyond the immediate economic considerations, the fundamental motivations behind entertainment consumption remain consistent:

• Seeking Engaging Content: People will continue to desire high-quality and captivating content that provides entertainment and escapism.

• Social Connection Through Media: Entertainment often serves as a shared experience and a basis for social interaction and discussion.

• Informational and Educational Needs: Some streaming content fulfills needs for information, education, and personal growth.

Description of consumers article is referring to (what is their age?, what is their gender? What is their income? What is their lifestyle):

The article refers to a diverse range of consumers, with specific segments highlighted:

• Age: Younger audiences are specifically noted for their increasing "fatigue with subscription overload" and their tendency to favor free platforms like FAST. The significant growth in viewership among those over 65 on YouTube indicates the platform's broad age appeal.

• Gender: The article does not provide any specific information regarding gender differences in streaming consumption patterns.

• Income: The focus on "cost-conscious viewers" looking to reduce their spending suggests a consideration for individuals and households across various income levels who are seeking greater value and affordability in their entertainment choices.

• Lifestyle: The article implies a lifestyle where streaming has become a prevalent form of entertainment consumption, but there is a growing awareness and concern about the cumulative costs associated with multiple subscriptions, leading to a more strategic approach to managing these expenses.

Conclusions:

The article concludes that the streaming industry is preparing for a significant transformation driven by potential economic pressures resulting from tariffs. This shift is expected to lead to a greater prominence of free, ad-supported streaming options, an increase in service bundling, higher production costs for content, and a continued evolution of advertising strategies in the Connected TV space. The overarching conclusion is that the industry must adapt to a more financially aware consumer base and a potentially more expensive operational environment.

Implications for brands:

• Streaming Platforms: Should strategically consider offering more competitive pricing structures, actively explore opportunities for service bundling with other providers, and potentially invest in enhancing their free, ad-supported content tiers to attract and retain cost-conscious viewers.

• Advertisers: Need to be prepared for a likely increase in viewership on FAST channels and should continue to refine their performance-driven CTV advertising strategies, leveraging the capabilities of AI for more precise targeting and effective measurement of campaign impact.

• Content Creators: May face growing pressure on production budgets and should therefore focus on developing cost-effective methods for producing high-quality content that appeals to a wide audience, including those who primarily utilize free platforms like YouTube.

• Consumer Electronics Manufacturers: Might observe changes in consumer purchasing patterns, with a potential shift towards greater emphasis on value and a possible lengthening of the upgrade cycle for devices due to anticipated price increases resulting from tariffs.

Implication for society:

• Increased Availability of Free Content: The projected growth of FAST channels could lead to a broader availability of free entertainment options for a larger segment of the population.

• Changing Media Consumption Habits: A greater reliance on ad-supported streaming services and platforms like YouTube could further alter established patterns of how people discover and consume media content.

• Potential Impact on Creative Industries: Budget constraints in content production could potentially influence the types of stories that are produced and the overall scale or production quality of some projects.

Implications for consumers:

• More Diverse Free Streaming Options: Consumers can anticipate a potential increase in both the quantity and quality of content available on free, ad-supported streaming platforms.

• Possible Higher Prices for Electronics: Tariffs could lead to increased prices for televisions and other electronic devices commonly used for streaming entertainment.

• Potential Benefits of Bundled Services: The increased emphasis on bundling could offer consumers the opportunity to access a wider range of content for a potentially lower overall cost compared to individual subscriptions.

• Continued Need for Subscription Management: Consumers may need to adopt more strategic approaches to managing their paid streaming subscriptions, including rotating or canceling services, to effectively control their entertainment expenses.

Implication for Future:

The future of the streaming industry is likely to be characterized by a greater focus on value and cost-effectiveness. Free, ad-supported models and bundled service offerings may become increasingly prevalent, while paid subscription services will likely need to clearly justify their cost through compelling content and user experience. Content production may see constraints on budgets, and advertising strategies will likely become more targeted and performance-driven.

Consumer Trend (name, detailed description):

The Economically Savvy Streamer: Consumers are becoming increasingly strategic and cost-conscious in their approach to streaming entertainment. This trend involves actively seeking out the most affordable options, such as free ad-supported services, and critically evaluating the value proposition of their paid subscriptions, potentially leading to service rotation or cancellations to manage expenses effectively.

Consumer Sub Trend (name, detailed description):

The Bundled Entertainment Seeker: To maximize content access while minimizing costs, consumers are increasingly interested in bundled entertainment packages that combine various streaming services or integrate streaming with other services like mobile plans or internet access, offering a more comprehensive and potentially cheaper solution.

Big Social Trend (name, detailed description):

The Intensification of Household Budget Scrutiny: Across society, there is a growing trend of individuals and households paying closer attention to their budgets and seeking ways to reduce discretionary spending in response to economic uncertainties and the rising cost of living.

Worldwide Social Trend (name, detailed description):

The Global Pursuit of Free Digital Content: The desire for free access to digital content, including entertainment, is a pervasive global trend. Platforms that offer high-quality content for free, even if ad-supported, often achieve widespread popularity and significant user bases across the world.

Social Drive (name, detailed description):

The Fundamental Need for Affordable Leisure: Access to leisure and entertainment is a fundamental human need. When faced with economic constraints or financial pressures, individuals will naturally seek out more affordable ways to fulfill this need.

Learnings for brands to use in 2025 (bullets, detailed description):

• Acknowledge the Growing Appeal of Free: Recognize the increasing popularity and potential of FAST channels and consider how your brand's content or advertising strategies can effectively engage with this expanding audience segment.

• Clearly Articulate Your Value: For paid streaming services, it is crucial to effectively communicate the unique value proposition and justify the subscription cost through exclusive, high-quality content and a superior user experience.

• Explore Strategic Bundling Opportunities: Actively seek out potential partnerships with other complementary service providers to create attractive bundled offerings that provide consumers with greater value and convenience.

• Optimize CTV Advertising for Performance: If your brand utilizes Connected TV advertising, focus on implementing performance-driven strategies that allow for accurate measurement of return on investment and leverage the targeting capabilities of AI.

• Focus on Efficient Content Production: If your brand is involved in content creation for streaming platforms, prioritize developing efficient and cost-effective production methods without compromising the overall quality of the content.

Strategy Recommendations for brands to follow in 2025 (bullets, detail description):

• Consider a Tiered Service Offering: Streaming services should consider implementing a tiered subscription model that includes both ad-supported options at a lower price point and ad-free premium tiers to cater to a wider range of consumer preferences and budgets.

• Develop Compelling Content for Free Platforms: If your brand chooses to participate in FAST channels or platforms like YouTube, invest in creating engaging and high-quality content that is specifically designed to attract and retain viewers in a free-to-access environment.

• Actively Pursue Strategic Bundling Partnerships: Proactively identify and forge partnerships with other content creators, streaming services, or service providers (such as mobile or internet companies) to create attractive bundled packages that offer significant value to consumers.

• Implement Data-Driven CTV Advertising Strategies: Advertisers should leverage data analytics and AI-powered tools to optimize their CTV advertising campaigns, ensuring they are reaching the right audience segments with relevant messages and maximizing their advertising spend.

• Emphasize Production Efficiency and Innovation: Content production companies should focus on streamlining their workflows, exploring innovative production techniques, and effectively managing budgets to navigate potential increases in material and labor costs while maintaining content quality.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified):

The streaming industry in 2025 is entering an era of significant economic realignment, compelling a shift towards value-driven strategies characterized by the rise of free, ad-supported options, the acceleration of bundling, and a renewed focus on cost efficiency across content production and advertising.

What brands & companies should do in 2025 to benefit from trend and how to do it:

In 2025, brands and companies within the streaming ecosystem should prioritize strategies that align with the increasing consumer focus on value and affordability. Streaming services should consider offering more flexible pricing models, including free tiers, and explore bundling opportunities to enhance their value proposition. Content creators should focus on efficient production to manage costs, and advertisers should leverage data and AI to optimize their ad spending on platforms that are seeing increased viewership, such as FAST channels. By understanding and adapting to these economic shifts, companies can position themselves to not only survive but thrive in the evolving streaming landscape.

Final note:

• Core Trend:

  • Name: The Streaming Economy Recalibration

  • Detailed Description: The core trend is a significant recalibration of the streaming industry's economic model in response to external pressures and evolving consumer behavior, marked by a shift towards greater cost-consciousness and value-driven consumption.

• Core Strategy:

  • Name: Value-Maximized Delivery

  • Detailed Description: The central strategy for brands will be to maximize the value they deliver to consumers through a combination of competitive pricing, diverse content offerings (including free options), and strategic partnerships to create more comprehensive and affordable entertainment solutions.

• Core Industry Trend:

  • Name: The Ascendancy of Ad-Supported Streaming

  • Detailed Description: The core industry trend is the increasing prominence and importance of ad-supported streaming models (FAST) as a key component of the streaming landscape, driven by consumer demand for free entertainment and the need for services to diversify their revenue streams.

• Core Consumer Motivation:

  • Name: Economical Entertainment Acquisition

  • Detailed Description: The primary consumer motivation is to acquire high-quality entertainment in the most economical manner possible, leading to a greater openness to ad-supported options and a more critical evaluation of paid subscriptions.

• Final Conclusion: The potential for tariffs is acting as a major catalyst, accelerating a necessary economic recalibration within the streaming industry, where providing clear value and affordable access to content will be paramount for success in 2025 and the years to come.

Recommendations for film makers:

• Explore Cost-Efficient Production Techniques: Filmmakers might need to investigate and adopt more cost-efficient production methods, including potentially utilizing more local resources, exploring virtual production technologies, and being strategic with location shoots and cast sizes.

• Focus on Strong Storytelling Over Spectacle (When Necessary): In a budget-constrained environment, emphasizing compelling narratives and strong character development can be a way to create engaging content even without massive budgets for visual effects or elaborate sets.

• Consider Content Suited for Free Platforms: Filmmakers might explore creating content that could be suitable for free, ad-supported streaming platforms like YouTube, potentially focusing on formats that are cost-effective to produce but still attract large audiences.

Recommendations for movie industry (with bullets, detail with text after bullets):

• Invest in Local Production Infrastructure: To mitigate the impact of tariffs on imported materials, the industry might consider investing more in developing local production infrastructure and sourcing materials domestically or from regions with more favorable trade agreements.

• Support Innovation in Virtual Production: Encourage and support the adoption of virtual production technologies, which can potentially reduce costs associated with physical sets and location shooting.

• Foster Talent Development in Cost-Effective Storytelling: There could be a renewed emphasis on developing writers, directors, and producers who are skilled at creating high-quality, engaging content within realistic budget constraints.

• Promote Collaboration Between Studios and Platforms: Encourage greater collaboration between film studios and streaming platforms to find efficient and sustainable models for content creation and distribution in the face of evolving economic conditions.

Source: https://www.adweek.com/convergent-tv/tariffs-transform-streaming-business/