What's happened
Free ad-supported streaming services like YouTube, Tubi, and The Roku Channel have seen rapid growth in viewership, outpacing paid services. Meanwhile, UK viewers increasingly prefer cheaper plans with ads, impacting traditional broadcasters and the streaming industry’s revenue models. The story highlights evolving consumer preferences and industry responses.
What's behind the headline?
The rise of free, ad-supported streaming services signals a fundamental shift in consumer behavior and industry economics. Nielsen data shows these services now account for nearly 18% of US TV watch time, growing at over 50% year-over-year, driven mainly by YouTube. This growth threatens traditional paid services, which are experiencing sluggish engagement increases of only 5%. The correlation between engagement and customer retention means paid streamers face a critical challenge: how to deepen viewer involvement to justify higher prices. Meanwhile, the UK’s adoption of cheaper, ad-supported plans surpasses premium, ad-free subscriptions for the first time, reflecting broader economic pressures and a preference for affordability. This trend is likely to accelerate, forcing traditional broadcasters and streaming giants to adapt or risk losing relevance. The industry’s pivot to advertising and lower-cost plans will reshape revenue streams, with ad markets expected to grow significantly, especially as platforms like Netflix and Disney innovate with AI and new content formats to maintain engagement and profitability.
What the papers say
Business Insider UK highlights the rapid growth of free streaming services like YouTube, Tubi, and The Roku Channel, which now make up nearly 18% of US TV watch time and are growing more than ten times faster than paid services. Nielsen data underscores this trend, with free streamers expanding their viewership by 53% from December 2023 to November 2025. Meanwhile, The Guardian reports that UK streaming subscribers on ad-supported plans have overtaken those on higher-priced, ad-free plans for the first time, driven by economic pressures and consumer demand for cheaper options. Both articles illustrate a significant industry shift: free, ad-supported streaming is becoming dominant, challenging traditional models and prompting major services to innovate with AI and new content strategies. The contrasting perspectives reveal a global pattern of industry adaptation, with the US focusing on engagement metrics and revenue growth, and the UK emphasizing consumer choice and cost-effectiveness.
How we got here
Over the past few years, streaming services have shifted from a focus on ad-free subscriptions to embracing advertising-supported models. This change was driven by economic pressures, consumer demand for lower-cost options, and the need for streaming platforms to sustain profitability amid slowing growth of paid subscriptions. Major players like Netflix and Disney are experimenting with new content strategies and AI innovations to boost engagement and revenue.
Go deeper
Common question
-
Streaming Wars 2025: How Viewers Are Changing the Game
The streaming industry is undergoing a major shift in 2025, with free ad-supported services gaining ground faster than ever before. As viewers increasingly prefer cheaper, ad-supported options, traditional broadcasters and paid streaming platforms are feeling the pressure. Curious about what this means for your streaming choices and the future of entertainment? Below, we answer the most common questions about the evolving streaming landscape and what to expect next.
More on these topics
-
Netflix, Inc. is an American technology and media services provider and production company headquartered in Los Gatos, California. Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California.