Report · December 14, 2025

2025 Media & Entertainment Industry Predictions Report

Summary

The analysis projects that artificial intelligence will be the primary catalyst for change across the media and entertainment landscape in 2025, enhancing human talent rather than replacing it. Streaming services continue to dominate revenue streams, with global SVOD and AVOD income projected to surpass $165 billion despite a fragmented market of over 200 platforms. Consumer churn and escalating content costs drive consolidation, leading to bundled or aggregated subscription models that are expected to account for 60–70 % of purchases in mature markets. Traditional multichannel pay‑TV providers are forecast to lose half their U.S. subscriber base, falling below 50 million users, prompting a shift toward “stream‑hub” offerings that combine broadband with multiple streaming services at competitive prices. Video multichannel distributors such as YouTube TV are projected to peak and then decline due to rising costs, live‑sports migration to direct‑to‑consumer services, and intensified OTT competition. Cloud gaming is set for a 44 % CAGR through 2030, driven by faster broadband, AI‑enhanced virtualization, and new commercial models. Console and PC sales are expected to wane as consumers redirect spending toward streaming devices, with subscription‑based monetization replacing one‑time purchases. The sector’s growth hinges on resolving commercial model constraints, particularly the need for more attractive storefront incentives to unlock mass adoption and realize a $64 billion market by 2030. In creative media, firms will increasingly deploy proprietary large‑language models while navigating intellectual property risks and regulatory frameworks such as the EU AI Act. Eight core governance building blocks—risk management, training oversight, compliance, testing, and incident response—are identified as essential for mitigating AI‑related challenges. Retail media and search are undergoing rapid transformation, with retailers partnering with streaming and social platforms to manage fragmented ecosystems, privacy rules, and AI‑driven formats. Generative AI is eroding Google’s dominance by enabling conversational, multimodal search experiences from competitors like OpenAI, Perplexity, Amazon, and TikTok. Consequently, Google’s share of search advertising is projected to decline modestly worldwide (from 57 % to 55 %) and in the U.S. (51 % to 48 %), as shoppable content, live shopping, and AI query volume shift revenue toward alternative platforms. Marketers will adapt by optimizing for AI‑generated summaries, voice, and visual search to align with evolving consumer behavior.

From the report

One year ago, we began our first annual One year ago, we began our first annual AlixPartners Media & Entertainment Industry Predictions Report by stating that “the media and entertainment industry has always been a poster child of creative destruction.” Fast-forward to year two, and that sentence still rings true—in fact, the destruction and Fast-forward to year two, and that sentence still rings true—in fact, the destruction and competition may have only grown fiercer. AI advances have made major inroads in the past year and will continue to serve as the major technological force disrupting business and operations across the media industry. From a creative perspective, AI has further penetrated the TV and film sectors, where practical, easy-to-implement use cases with measurable outcomes will lead the way in 2025. But we don’t expect the technology to replace human talent; it should only enhance creative output. AI is also disrupting the video gaming, casino gaming, sports betting, and search markets, shifting traditional business models to meet consumer preferences. Legacy media and advertising businesses are seeing a similar need to transform business Legacy media and advertising businesses are seeing a similar need to transform business models as subscription revenue moves from Pay TV to streaming, while advertising revenue moves from linear to digital. The continued rise of retail media will evolve where companies place their ad dollars to match consumption habits.

We lay out our second annual AlixPartners Media & Entertainment Industry Predictions Report across seven chapters. As we enter 2025, we believe our core predictions will shape the future direction of the industry: 01. STREAMING WARS: The battle over 04. AI IN CREATIVE INDUSTRIES: the next generation of TV Enhancing, rather than replacing, human 1 Streaming subscriptions purchased through wholesale creativity in TV and film distribution will rise to 60-70% in mature markets, driven AI will transform the production cycle—not by eliminating by the growing momentum of bundling and aggregation. creative jobs, but by redefining roles and sparking new Over time we expect to see three to five “central hubs” synergies between creative teams and technology. emerge as leading distributors, but in 2025, we will see In fact, we predict that in 2025 there will be a lack of several new deal partnerships as the industry experiments creatives with the expertise and skills required to use the 2 with consolidating streaming services. new AI tools available. Experimental bundling partnerships among direct-toconsumer (DTC) platforms are early indicators of broader 05. RETAIL MEDIA'S NEXT FRONTIER:

ips as the industry experiments creatives with the expertise and skills required to use the 2 with consolidating streaming services. new AI tools available. Experimental bundling partnerships among direct-toconsumer (DTC) platforms are early indicators of broader 05. RETAIL MEDIA'S NEXT FRONTIER: 3 industry consolidation coming in 2025. Transforming the advertising landscape Traditional Pay TV subscribers in the U.S. will drop below 50 million in 2025—less than half of what they were just As advertisers continue shifting budget towards digital, a decade ago. Meanwhile, virtual multichannel video the convergence of the streaming services and retail media programming distributors (vMVPDs) are approaching their trends, coupled with the global expansion of retail media peak before entering a period of decline after 2025, driven networks, will accelerate disruption within the by the rapid shift of live sports to DTC platforms, evolving media industry. consumer behavior, and rising costs. 02. SPORTS BETTING AND CASINO GAMING: Fund tech investments or face marginalization There will only be room for three to five dominant players within the online sports betting and iGaming industries to successfully invest at scale and grow. As others fight for market share, we predict at least one company will be forced out of the competitive arena. 06. THE FUTURE OF SEARCH: AI-driven disruption and diversification OpenAI, Perplexity, Amazon, and TikTok will gain further traction, signaling a new era of competition in the search industry. Google's share of the search advertising market will continue to shrink, decreasing by low single digits. 07. M&A IN MEDIA:

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