With so many factors accounting for audience behaviors, it’s easy to lose sight of what matters most. But sometimes a statistic can surface that clarifies the perspective: U.S. consumer spending on video is stuck in a period of structural stagnation after decades of steady growth.
For much of the modern media era, consumers increased their video spending by roughly 3% annually, according to an analysis by investment research firm MoffettNathanson, enabling distributors and programmers to raise prices with relatively little resistance.
That dynamic broke during the pandemic. Although total U.S. video spending briefly approached $140 billion, the market has barely grown in the six years since, signaling that consumers have reached a ceiling in what they are willing to pay for content.
This plateau does not reflect reduced engagement with video but rather a redistribution of dollars across platforms. Traditional pay TV spending has fallen sharply — from roughly $104 billion to about $85 billion — and continues to drop each year as cord-cutting accelerates.
Those dollars have partially migrated to streaming, which has climbed to roughly $44 billion and is on track to surpass pay TV within the next several years. Still, streaming’s growth hasn’t been sufficient to offset the broader slowdown in total consumer spending on video.
At the same time, viewers have become markedly more price sensitive. Faced with an expanding array of services and rising subscription costs, many have gravitated toward free or lower-cost options, including ad-supported streaming, FAST channels and YouTube.
Time spent with free services continues to rise, underscoring a growing disconnect between consumption and direct consumer payment.
That shift has imposed clear limits on pricing power across the industry. Subscription churn has increased, and platforms face diminishing returns from price hikes, particularly in the absence of must-have content.
In response, distributors are experimenting with rebundling strategies that combine linear channels and streaming services into a single offering, reflecting consumer demand for simplicity and perceived value.
Data suggests the video market has moved from an era of expanding consumer wallets to one defined by substitution, trade-offs and heightened price discipline — forcing the industry to compete less on extracting incremental spend and more on delivering value within a fixed consumer budget.
