For some time now it seems the media and entertainment industry has been in somewhat of a crisis. Much as I hate to mention COVID 6 years on but the bubble it created burst quite magnificently not long after people were able to get back out and about. And since then, we have seen a significant decline in subscribers, viewing hours, and revenue for every part of the industry. Can the industry recover and how do we get there?
Helen Weedon
Managing Director, Radical Moves Ltd
Why are subscribers moving away?
I believe we are seeing the impact of a few different factors here. Firstly, the massive spike in subscriptions we saw during COVID was never going to last once people could get out and about again and had other things to spend their money on. At the same time, the pandemic led to a widespread global economic crisis. This hasn’t abated and has now been worsened further by a number of global events. All of this has had a massive impact on people’s pockets and so forking out for multiple services is no longer sustainable for most people.
Some of this could also be due to other entertainment formats. For the first time last year, UK adults spent more time on their mobile phones than watch TV sets. That is according to a report from IPA TouchPoints. This is largely driven by younger audiences, who are also likely to spend much of their downtime on games consoles.
Enter the era of ad-funded content and services
In this landscape, it is not surprising that video providers turned to ad-funded monetisation models, nor is it a stretch that these have been largely popular. Consumers are increasingly content to be served ads if it means free access to the content they want to watch. What we are also seeing is a great deal of innovation here, both in terms of the models – with different subscription tiers, pay-per-view options etc- and in terms of the technology powering it.
The latest of these is Server-Guided Ad Insertion (SGAI), where the server signals an ad break while the client-side video player handles insertion, allowing for seamless transitions and more personalised ads. Ad tech is also transforming how ads appear, with L-shaped banners running alongside viewed content, for example.
Are people watching less or just paying less?
The latest statistics would indicate that video viewing is still strong and streaming services subscriptions are on the rise. In the UK, stats from Barb, show that for the first time more than 70% of UK homes had access to an SVOD service in the first quarter of 2026. The major players have seen a rise in subscriber numbers, but while the rise of total subscribers seems slight, the big percentage increase is the number on the ad tiers for these big players. This shows the appetite for video content is still alive and well, but the means or willingness to pay has reduced. That said, ad tiers are likely bringing streaming to more people who may previously not have been able to access it at all.
So, viewers are still there, willingness to pay has reduced so there is a greater need for hybrid monetisation and ad pennies. And getting the ad spend is of course a competition to get brands attention from other forms of advertising but this is where streaming services have real potential. The new ad technologies mentioned above, coupled with clever use of AI to enable much more personalisation, makes for an appealing offering. When you add to that the concept of in-service shopping options or in-video product placement, there is some real potential.
Why so many mergers and acquisitions?
We have seen a number of high profile mergers and acquisitions taking place, both on the distribution side with Paramount approved to takeover Warner Bros Discovery and on the tech and vendor side, such as Deltatre acquiring Endeavour Streaming and the recent merger between Accedo One and Magine, now Leyra.
However, this isn’t necessarily bad news. For a long time now there has been talk of too much fragmentation in the market. There are so many video services and providers, making it overwhelming for consumers, and a multitude of tech vendors doing very similar things. This consolidation was inevitable and will lead to a much more efficient use of resources and with that, the potential for the industry to innovate at a faster pace than ever before. Ultimately this will also lead to a better experience for viewers at home, which can only help the industry in the long term.
Will we turn a corner?
It seems like it has already been a long time of things seemingly somewhat bleak for the industry. Large established players have had to stop trading, others are losing staff and consolidation continues. However, people will always watch video. That much is likely true, but the form is changing, with mobile first youngsters. So, as long as the industry adapts, serves video in the right form to keep up with consumer appetite, mixes up the monetisation models, and continues to both innovate and listen to that feedback, there is no reason why it shouldn’t ultimately come back stronger than ever, which will benefit the entire ecosystem.
